Compounding of transport offence bars separate penalty against driver for the same vehicle-related violation.

Once the alleged transport offence under the Rajasthan Value Added Tax Act, 2003 was compounded by the vehicle owner and the Department accepted the composition, the same transaction was treated as settled. On that basis, a separate penalty proceeding against the driver for the identical vehicle-related violation was unsustainable because no surviving basis remained for further penalty after composition. The Rajasthan HC therefore rejected the Revenue's challenge and upheld the setting aside of the penalty notice under section 76(9).

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Issues: Whether, after compounding of the alleged offence by the vehicle owner under the Rajasthan Value Added Tax Act, 2003, a separate penalty notice under section 76(9) could still be sustained against the driver of the vehicle.

Analysis: The alleged transport violation was noticed during interception of the vehicle, and the owner thereafter sought composition of the offence, which was accepted by the Department. Once the offence stood compounded, the matter was treated as settled in respect of the same transaction. In that situation, a separate penalty proceeding against the driver on the same facts was held to be unsustainable, because the departmental action had already culminated in composition of the offence and there was no surviving basis for further penalty on the vehicle-related violation.

Conclusion: The separate penalty under section 76(9) was held to be not sustainable and the revision filed by the Revenue failed.

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