Compounding fee under sales tax law remains valid where prima facie escape estimate differs from final assessment findings.

Jurisdiction under sections 45 and 46 of the Tamil Nadu General Sales Tax Act operates independently from regular assessment, allowing the assessing authority to act on incomplete material and make a prima facie estimate of escaped turnover for compounding purposes. Later assessment proceedings, which determine actual turnover on fuller inquiry, do not invalidate the earlier estimate merely because the final escapement found is lower. The difference in figures does not, by itself, establish lack of jurisdiction, unfairness, or breach of natural justice in the compounding process.

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Issues: Whether the demand of compounding fee under section 45(2)(a) read with section 46 of the Tamil Nadu General Sales Tax Act, 1959, was without jurisdiction or otherwise invalid merely because the escapement of turnover ultimately found in regular assessment was much lower than the figure estimated at the stage of inspection.

Analysis: The jurisdiction exercised for action under sections 45 and 46 was held to be distinct from the jurisdiction exercised in regular assessment proceedings under the Act. In the former, the assessing authority acts on incomplete material and may form an estimate of escaped turnover on a prima facie basis and offer compounding of the offence on that footing. The later assessment proceedings, by contrast, involve a fuller investigation and a final determination of actual turnover. Because the two processes operate in different fields, the fact that the later assessment disclosed a smaller escapement did not by itself show that the earlier estimate or the consequential compounding fee was without jurisdiction, inequitable, or contrary to natural justice.

Conclusion: The challenge to the compounding fee failed; there was no error of jurisdiction, no violation of natural justice, and no other legal infirmity in the impugned order.

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