TMI Blog1992 (2) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... itted or is reasonably suspected of having committed an offence punishable under this Act, by way of composition of such offence- (a) where the offence committed is under clause (d) of sub-section (1) of section 29 or clause (c) of sub-section (2) of section 29, in addition to the tax or amount not paid or evaded to be paid, a sum of money not exceeding one thousand rupees or double the amount of the tax or amount so remaining unpaid or evaded to be paid whichever is greater, and (b) in other cases, a sum of money not exceeding one thousand rupees." Section 20 of the Act says that any person objecting an order affecting him, passed under the provisions of the Act, may appeal thereagainst. The reference to the Full Bench was made becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order fixing the compounding fee is appealable or not. What was done by the order dated 29th September, 1969, was to drop the proceedings in view of the fact that the assessee agreed to compound the offence and paid the compounding fee. By the dropping of the proceedings, the assessee cannot be said to be a person aggrieved. Therefore, the authorities below were right in the view they have taken that the order dated 29th September 1969, was not appealable." Our attention was drawn by Mr. S.P. Bhat, learned counsel for the assessee in the first revision petition (S.T.R.P. No. 17 of 1987), to the recent judgment of a Division Bench in Assistant Commercial Tax Officer v. N.N. Jariwala [1992] 86 STC 229 (Kar); ILR 1991 Kar 4414. This was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was an invalid order, it was open to the assessee to agitate this in an appeal. For example, the sales tax authorities who had compounded might lack jurisdiction to do so; there may be circumstances present on record to show that the assessee's consent could not have been free; the composition fee might not be within the limits prescribed by section 31; or the payment of the composition fee, when made, might have been voluntary but the assessee might subsequently have discovered that there was no offence. In these circumstances, it was submitted, the assessee was a person aggrieved and had a right to appeal under section 20. The submissions of Mr. Bhat were adopted by Mr. Indrakumar, learned counsel for the assessee in the second petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id would, in the learned Judge's view, lead to very incongruous and unsatisfactory, if not, unjust consequences. One of the reasons advanced by the learned Judge for this conclusion was that if after such acceptance had been reached, the question of composition was still to be regarded as being at large, it would permit either the competent authority or the dealer to resile from the agreement. There had to be in the nature of things some time-lag between the acceptance and the actual receipt of the composition money. If between these two points of time, the assessee was to be regarded as still retaining the option of not paying the composition amount, the prescribed authority should also be regarded as still retaining the option of prosecut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the offending assessee which is accepted by the officer concerned." We must now note the judgment of the Supreme Court in Shamrao Bhagwantrao Desmukh v. Dominion of India AIR 1955 SC 249. This judgment dealt with sections 51, 52 and 53 of the Income-tax Act, 1922. The Supreme Court said that what section 53 provided was that a person should not be proceeded against for an offence under section 51 or section 52 except at the instance of the Inspecting Assistant Commissioner and that the lastmentioned officer might, before or after the institution of proceedings, compound any such offence. The section did not say that the offence could be compounded only if it was proved to have been actually committed. If there was a proceeding on a ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade it is for the prescribed authority to determine whether the offence should be compounded and, if so, whether it should be compounded for the amount offered. No doubt, it would be open to the prescribed authority to suggest such other sum as in its view would be appropriate, in which case it would be for such person to agree to pay such other sum or not. In our view, the process of compounding is completed only when the money that is agreed upon actually changes hands. If this be the correct view, as we think it is, with great respect to the learned Judge who decided Nanjappa's case [1968] 22 STC 277 (Mys), there can never be a situation where the person who has committed or reasonably suspected of having committed an offence under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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