Reasonable suspicion from missing statutory account books justified compounding action and defeated the jurisdictional challenge.

The compounding notice was valid because the prescribed authority had first-hand material showing non-maintenance of the statutory stock-book and production account, which reasonably supported a suspicion of offence under the Act. On that basis, the authority could infer wilful contravention of the rules and choose compounding rather than immediate prosecution. The challenge that the notice was without jurisdiction or based on an unreasonable suspicion failed, and prohibition was refused.

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Issues: Whether the compounding notice issued for alleged breach of the prescribed stock account and production account requirements was without jurisdiction or based on an unreasonable suspicion of commission of an offence.

Analysis: The prescribed authority could act under the compounding provision when satisfied that a person had committed, or was reasonably suspected of having committed, an offence under the Act. The inspection disclosed that the persons in charge of the business premises admitted that the statutory stock-book and production account were not maintained. In that setting, it was open to the authority to infer a wilful contravention of the relevant rules and to adopt the compounding route instead of immediately launching prosecution. The facts therefore furnished sufficient material for a reasonable suspicion, and no case was made out for interference on the ground of lack of authority, excess of jurisdiction, or erroneous exercise of jurisdiction.

Conclusion: The notice was held to be valid and the request for prohibition was rejected.

Final Conclusion: The challenge to the compounding notice failed, and the petitioners were left to either compound the offences by payment of the demanded amount or face prosecution in accordance with law.

Ratio Decidendi: Where the statutory authority has first-hand material showing non-maintenance of mandatory account books, it may reasonably suspect commission of an offence and invoke the compounding power without the action being vitiated for want of jurisdiction.

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