Delegated compounding power upheld where written admission supported composition payment, which could not be recast as a security deposit.

Rule 3 of the Assam Value Added Tax Rules, 2005 permits delegation of the Commissioner's powers, and notifications in the record validly delegated Section 89 compounding power to the Superintendent of Taxes. Because the petitioner had submitted a written admission of the offence and requested compounding in lieu of prosecution, the delegated officer acted within jurisdiction and the compounding order was valid. The amount recorded in the challan and contemporaneous documents as composition money could not later be treated as a security deposit, since the deposit was made without protest and was consistent with the request for compounding. The challenge to the compounding order and refund claim therefore failed.

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Issues: (i) whether the Superintendent of Taxes had jurisdiction, under delegated power, to compound the offence under the Assam Value Added Tax Act, 2003; (ii) whether the amount deposited by the petitioner was a composition amount or a security deposit.

Issue (i): whether the Superintendent of Taxes had jurisdiction, under delegated power, to compound the offence under the Assam Value Added Tax Act, 2003

Analysis: Rule 3 of the Assam Value Added Tax Rules, 2005 permits the Commissioner, by notification, to delegate powers to officers under the Act. The record disclosed notifications delegating the power under Section 89 of the Assam Value Added Tax Act, 2003 to the Superintendent of Taxes. The petitioner had also submitted a written admission that it had committed the offence and requested compounding in lieu of prosecution. Section 89 requires such written admission before compounding. On these materials, the exercise of power by the Superintendent of Taxes was within jurisdiction and in conformity with the statutory requirement.

Conclusion: The Superintendent of Taxes had jurisdiction to compound the offence, and the compounding order was valid.

Issue (ii): whether the amount deposited by the petitioner was a composition amount or a security deposit

Analysis: The challan and contemporaneous record described the amount as composition money. The petitioner's later assertion that it was only a security deposit for transit permit issuance was inconsistent with the written request seeking compounding and acceptance of the same amount in lieu of prosecution. No reservation or protest accompanied the deposit.

Conclusion: The amount was deposited as composition money and not as a security deposit.

Final Conclusion: The challenge to the compounding order failed, and no interference was warranted with the order accepting composition money and declining the petitioner's refund claim.

Ratio Decidendi: Where the Commissioner has validly delegated the power under Section 89 and the accused person has admitted the offence in writing and sought compounding, the delegated officer may lawfully compound the offence and the resulting composition payment cannot later be recharacterised as a security deposit.

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