Finality of compounding under sales tax law bars later reopening and enhancement of the composition amount

A compounded offence under the A.P. General Sales Tax Act, 1957 was treated as final once the prescribed fee was collected, because section 32(2) gave finality to orders or proceedings under section 32(1) and barred appeal or revision. In the absence of any enabling provision for review or reopening, the authority could not revisit the compounding or enhance the composition amount at a later stage under section 32(1)(a). The long delay between inspection and initiation of further proceedings also weighed against reopening. The reopening and enhancement were therefore held to be without jurisdiction and invalid, with the challenge succeeding for the assessee.

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Issues: Whether the respondent could reopen a compounded offence and enhance the composition amount under section 32 of the A.P. General Sales Tax Act, 1957 after the offence had already been compounded and long after the inspection.

Analysis: The inspection had resulted in compounding of the offence by collection of the prescribed fee. Section 32(2) of the A.P. General Sales Tax Act, 1957 gave finality to any order passed or proceeding recorded under sub-section (1) and barred appeal or revision. In the absence of any enabling provision permitting review or reopening, the respondent had no authority to revisit the compounding and increase the amount under section 32(1)(a) at a belated stage. The attempt was also contrary to the time gap between inspection and initiation of proceedings.

Conclusion: The reopening and enhancement of the composition amount was without jurisdiction and invalid, and the challenge succeeded in favour of the assessee.

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