Premature composition notice is invalid where reasonable suspicion must arise from completed assessment enquiry materials.

Section 32 of the Andhra Pradesh General Sales Tax Act permits composition only where a person has committed, or is reasonably suspected of having committed, an offence on the basis of completed enquiry material. The authority is under no obligation to offer composition, but any demand to opt for composition before the assessment enquiry is completed is premature if the dealer's objections and the proposed assessment have not yet been examined. Mere untested allegations cannot amount to reasonable suspicion for initiating composition or threatening prosecution. The notice was therefore quashed as premature, while the authority was left free to continue the assessment enquiry and proceed according to law thereafter.

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Issues: Whether the notice calling upon the dealer to opt for composition of the alleged offence before completion of the assessment enquiry was premature and liable to be interdicted.

Analysis: The statutory power under section 32 of the Andhra Pradesh General Sales Tax Act, 1957 permits the prescribed authority to accept composition from a person who has committed or is reasonably suspected of having committed an offence. The provision does not impose any obligation on the authority to offer composition, and the existence of a reasonable suspicion must be founded on the result of an enquiry. Until the dealer's objections to the proposed assessment are considered and the enquiry is completed, the allegation that incorrect returns were filed remains untested, and mere suspicion cannot be treated as reasonable suspicion for the purpose of initiating a composition demand or threatening prosecution.

Conclusion: The notice was premature and could not validly require the petitioner to choose between composition and prosecution before completion of the enquiry.

Final Conclusion: The writ petition succeeded, and the impugned notice was quashed as premature, while leaving the authority free to continue the assessment enquiry and take action thereafter according to law.

Ratio Decidendi: A composition notice under section 32 can be issued only when a reasonable suspicion of an offence exists on the basis of completed enquiry materials, not on a mere unverified allegation before assessment proceedings are concluded.

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