Compounding of fiscal offence ends prosecution when settlement is accepted and prolonged proceedings violate speedy trial rights.

Acceptance of the compounding fee and subsequent payment of interest completed the financial settlement of the alleged TDS default, so the prosecution had no continuing basis. Continuation of the criminal proceedings for decades, along with warrants and attachment orders, was treated as an abuse of process, and coercive steps taken after full restitution were legally untenable. The passage of time and prolonged pendency were also viewed as inconsistent with the constitutional guarantee of a speedy trial under Article 21. On that basis, the criminal proceedings and all consequential coercive orders were liable to be quashed, and the compounding treated as final.

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Issues: Whether the criminal prosecution for alleged TDS default and the consequential warrants and attachment orders were liable to be quashed after acceptance of the compounding fee and payment of the further interest amount, and whether the prolonged continuation of the proceedings offended the right to speedy trial.

Analysis: The compounding amount had been accepted by the Revenue during the subsistence of the stay, and the record showed further payment of interest, thereby completing the financial settlement of the dispute. Once compounding is accepted, the offence stands settled and the prosecution loses its basis. The continuation of a prosecution that had remained pending for decades, together with coercive steps such as warrants and attachment, was held to be an abuse of the process of law. The invocation of coercive provisions after full restitution and the attempt to proceed even against a deceased accused were found to be legally untenable. The prolonged pendency was also treated as inconsistent with the guarantee of a speedy trial under Article 21 of the Constitution of India.

Conclusion: The criminal proceedings and all consequential coercive orders were liable to be quashed, and the compounding was to be treated as final.

Final Conclusion: The revision succeeded, the prosecution was terminated, and the ancillary application stood disposed of with the coercive process recalled.

Ratio Decidendi: Once a prosecution for a compoundable fiscal offence is settled by acceptance of the compounding amount during the pendency of the matter, its continuation becomes an abuse of process and may be quashed, especially where the proceedings have persisted for an inordinate period in breach of the right to speedy trial.

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