Compounding of offence bars later penalty for the same contravention under the Kerala General Sales Tax Act.

Compounding of an offence under section 47 of the Kerala General Sales Tax Act settled the offence itself, not merely prosecution, so once the authorised officer accepted the composition and the prescribed amount was paid, no further penalty could be imposed for the same contravention. The court treated sections 45A and 47 as part of the same offences-and-penalties scheme and held that compounding exhausted the matter in respect of that offence. Penalty proceedings initiated after compounding were therefore unsustainable, and the penalty order and revisional orders were set aside.

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Issues: Whether penalty under section 45A of the Kerala General Sales Tax Act, 1963 could be imposed for the very same offence that had already been compounded under section 47 of that Act.

Analysis: Section 47 contemplates composition of the offence itself and not merely a limited immunity from prosecution. Once the authorised officer accepts the compounding offer and the prescribed composition amount is paid, the offence stands settled between the parties. In that situation, no further penal action can be taken for the same offence. The fact that sections 45A and 47 both fall within Chapter VIII dealing with offences and penalties supports the conclusion that compounding under section 47 exhausts the matter in respect of that offence. Decisions relied on by the Revenue were distinguished because they dealt with different contraventions or with the limited effect of compounding under different statutory language.

Conclusion: Penalty proceedings could not be initiated for the same offence after compounding under section 47. The penalty order and the revisional orders were therefore unsustainable and were set aside, in favour of the assessee.

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