Compounding under VAT cannot be reopened after acceptance and payment, while blocking a dealer's online access needs statutory authority.

A compounding order under the Kerala VAT regime, once the offence is accepted and the compounding fee is remitted, cannot be reopened to dispute the admission itself; only patent errors in fee quantification may be corrected. On that basis, a rectification application was held not maintainable, and a revision against its rejection did not justify keeping assessment proceedings in abeyance. Separately, blocking the online facility of a registered dealer was held unsustainable because no enabling statutory provision authorising that restriction was shown.

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Issues: (i) whether the assessee could challenge the compounding order after accepting the offence and remitting the compounding fee, and seek to keep the assessment proceedings in abeyance pending a revision against rejection of rectification; (ii) whether blocking the online facility of a registered dealer was legally sustainable in the absence of any enabling provision.

Issue (i): whether the assessee could challenge the compounding order after accepting the offence and remitting the compounding fee, and seek to keep the assessment proceedings in abeyance pending a revision against rejection of rectification.

Analysis: The composition scheme under Section 74 of the Kerala Value Added Tax Act, 2003 permits compounding on the assessee's option, but the assessee cannot resile from the admission of the offence after the compounding process is completed. The Court reconciled the earlier decisions and held that any challenge lies only to patent mistakes in the quantification of the compounding fee, not to the admission of the offence itself. In the present case, the assessee had accepted the order, paid the amount determined, and did not prefer the statutory appeal. The rectification application was held to be not maintainable, and the revision against its rejection could not justify keeping the assessment proceedings in abeyance.

Conclusion: The challenge to the compounding-based assessment action was not maintainable, and the writ petition on that issue was dismissed against the assessee.

Issue (ii): whether blocking the online facility of a registered dealer was legally sustainable in the absence of any enabling provision.

Analysis: The respondent-State was unable to point to any statutory provision authorising blockage of the online facility of a registered dealer. In the absence of an enabling provision, the impugned action could not stand.

Conclusion: The blocking of the online facility was unsustainable and the writ petition on that issue was allowed in favour of the assessee.

Final Conclusion: The judgment grants relief on the online-facility issue while declining relief on the compounding and assessment issue, leaving the assessee only partly successful.

Ratio Decidendi: A compounding order under the VAT regime, once accepted and acted upon by payment, cannot be reopened to dispute the offence admitted, save for patent errors in fee quantification, and administrative restrictions on a registered dealer require statutory authority.

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