Compounding fee under VAT law applies at the rate in force when the assessee opts to compound, not when evasion occurred.

For compounding an offence under the Kerala Value Added Tax Act, the applicable compounding fee is the rate in force when the assessee elects to compound, because compounding is a voluntary statutory option and the levy is characterised as a fee rather than punitive penalty. Article 20(1) of the Constitution, which prevents enhanced punishment for past offences, does not govern such a fee-based liability. The earlier rate therefore does not apply merely because the underlying evasion occurred before the enhancement.

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Issues: Whether, for compounding an offence under the Kerala Value Added Tax Act, the compounding fee payable is the one prevailing at the time when the evasion occurred or the one prevailing at the time when the assessee elected to compound the offence.

Analysis: The liability in the present case arose from compounding of an offence, not from a punitive penalty. The Court distinguished authorities dealing with penalties and continuing offences, and held that Article 20(1) of the Constitution of India, which bars enhanced punishment for past offences, does not control a levy characterised as a fee. Since compounding is a voluntary act by the assessee to obtain release from further proceedings, the governing rate is the rate in force when the assessee opts to compound. The later enhancement of the compounding fee therefore applies to the assessee's election to compound, and the earlier lower rate has no application merely because the underlying evasion related to an earlier period.

Conclusion: The compounding fee payable is the fee prevailing at the time of the assessee's decision to compound the offence, not the fee prevailing when the evasion took place.

Ratio Decidendi: Where the statutory consequence is a compounding fee and not a punitive penalty, the applicable rate is the rate in force when the assessee elects to compound the offence.

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