) IN THE HIGH COURT OF <ARNATAKA AT BANGALORE tat€d thi he 6th t of y, 1999 KrN BEFORE THE HW’BLE MR. JUSTICE V. P. MOHAN KUNAR flF6 1%/s. She mrhand Dungahand & Co., Kiraza B*er, Bij apur, A registered partnership firm, by Partner : Sri Laichand • H, Jam, Son of Sri Hanjarimal, aged 37 years • PtflTIWER (Sri B,P, Gandhi, Advocate) A N D The Assistant Commissioner of CorirnerciaL Tea es, (Cross Veri tic ation), &iforcanent — I, North 2 ane, Sadashiv an eq or, Belgaum RESPWDe!4T (tnt S. Sujatha Writ Petition filed under Article 226 & 227 of the Constitution, praying to issue RbtE NI5I ; and a rn — 2 and to issue a writ, directing the respondent to refund a sum of Rs 24,000/— being amount collected pursuant to incure —A in ccess of limits prescribed under Section 23 (b) of ICTET3 Act, etc. This Writ Petition having been heard and reserved for orders and coming on this day for pronouncement of orders, the Court prcounced the folLowing : This writ Petition rai aes an interesting question. That i 8, whether the respondent ceLcising the power of comostior conferred inder the taxing law, can demand, collect and retain, um in excess of the composition fee provided for composition of otfences provided for under thp tcing statute. The facts of the sac, materiel for the adjudication of the dispute, is as hereunder. The petitioner a trader in sugar assessed to Sales T by the A 5i stant Commi ssioner of Commercial Texe • Tb Is respondent herein on 13 94, searched the rend sea o the peti i z ed & eq ng that ne as purchased sugar from sugar factory at Ichalkaranji during the year 1992—93 directed the petitioner to pay a sum of s, 1, O53/ as entry tc, T he petitIoner al1eoe that 3 that there i 5 no assessment me for the demand made as above, Besides, as per Anncure — A, the peti — tioner alleges that he was celled upon to pay Rs, 2,0OO/- as composition fee under Section 23 of the Pct He paid the stC to ave prosecution and Anncure — i8 the receipt evidencing that payment, The peti tioner alleges that levy of compounding fee falls - under Section 23( (b) and such it cannot cceed Rs, 1000/—, The eAcess levy is hence illegal and is liableto be refunded, 3, The petitioner alleges that he filed an appeal ,gainst he order uner Setio 23 and by ‘er kineaiure — C dated 24,8,95, the appellate authority rejected the same as incompetent, Thereafter the above grit ptition as f leo i t e peti er hllen og eAcess levy of composition fee and seeking reftina in a of , 1000/— 4, The contention of te department? as disclosed from incure — is that when it was 4 was discovered at the search held on 3j,7,94, that, the petitioner had effected Si purchase transaction during the year 1992—93, involving Turnover of Rs 45,51, 731/—, the levy of entry tc wa attracted and e.g such on 17,B,4, a notice was issued to the petitioner providing herein an opportunity to discharge the try tc liability as indicated. In response, partner of the petitioner fin appeared on 19B94 and after admitting the liability handed over the cheques to cover the tax liability willingly, He thereafter cme torward to compound the offence partment ally, Later on 25,8,94, he appeared the Bijapur Camp of the respondent end come forward to compound the offence ny paying Rs, 25,000/— as the compo.znding fee, Conside - ring the tc liahility, the respondent wcepted the offer The payment of composition fee being voluntary the petiti one is ot entit ed for any r fund, • hay card •F.P arah , ear o. Cou I fo the petit ioer a 5uJatha 1ernea ‘overnent P1edp at 1 t. ii t l e t1 ur t - c. - .3 e.5e The composition’wa(effected bythe petitioner impugned herein was on 25—8—1994 and the Writ Petition was filed on 5—2—1996. There is thus delay in moving this Court. It is seen that the petitioner pursued an incompetert appeal. which Was disposed of on 2441995. Reckoning from that date it cannot be said that there is inordinate delay in approaching this Court. Learned Government Pleader relies onthe judgment in W.P.io.29546 of 1996 whereinske urged thatin a similar circumstance. this 6 ourt refused to exercise its jurisdiction ursier Article 226 of the Constitution. Ther*,’ I find thatLthe said V.P., that was impugned was the order made on 18—7—1995 by filing a W.P. on 2—9—1996 i.e., nearly after more than one year. The explanation offered therein was only a contempl*Sd appeal. That explanation this Court thought is insuffioient to explain the bona tides of the petitioner. It was for that reasonkthis Court refused to condone She delq. 7. But, the facts in this case are different. Here as a mater of fact the petitioner pursued an in— comp tent e flm oft Wfl a sp6seC oron 24—8—1995 ta I a I i :sI )a,a. iii! Ills’ ‘‘its øt*fii1I In .a.Ij ijj t jIi • r a ‘ -‘tIE: V age .J p RigI’ 1 IijH-nNs :I 1 ’i %;Sflt dl lib * • ,, 3 ‘II, ‘4 ft — 7— 9. The next question to be considered is whether willingness onthe part of the petitioner to pay a larger amount by way of a comoosit ion fee would alter the situation in any manner. This question has to be looked at in the following maner. The p6wer being exercised byt he Officer s under Section 31 of the Entry Tax Acts Outside the said provision thereis no power to copound the offence with respect to which the sssessee could be procted agctnst. And an assessee has to satisfy the conditions: ld down in Section 31 to coixpound the offence, One such condit ion is that he be willing to pay a maximum composition fee of Rs.1000/—, The composition fee thus fixed is not a: negotiable amount • The s.ssessee should be willing to pay the amount stipulated under 1 ection 31: of the Act, Nence it has to be ne•n4 dehorse Section 31, a. assesses cs.rir:ot compound an offenc.e as well. The Officer exercising the power der Section 31 oa:.n invoke the power only to the extent of imposition of Rs 1000/— ae ccnpoun•a :ee. ip usLnr the espression not exosding’ in Section 3 it the discretion of the auth:ority t £ a C .1 1+ 1.0 1 d a ‘S 0 R C k I “. ‘ “ & I- ‘It 1) * fr a 0 S H 4 Pd p. II • 1 ii be P— • ‘1 • 4 • ) 17 * ) P a p ‘S C It U 1S S b * 1• 5 . c • • • * p a p 3’ ‘S t * cI St • •1p ,d n • I. p K S £1. •. S a 4J 13 p II H U bh • “4 ‘S 0 S p. ., ) I ‘ p t q p P d C • H 4 t 4 • r S L I S p • a S 3 5 J be ) ) I. q p t St • ‘S • a , 17’ p p. ,d • p4. 4 C • I 0 ii t a. 3 ‘ ‘4 I. b 9a n d on ifort at zoxar cited 0 Itht Coon n.tT CIU 6 I4L I uit C R 1. 4 dAT re orted tIE 1991 Kir. 4414 to i ifl 1 co te ti n. T’e foil bing a et ins* tinepo t lar. a t questi a for cow er4ion it ‘hot e t ee°poM a e°top ed fron. orete* a the Wnt P4.ti n on the to ni of acquzeicen a. If t a acuat of o o ndirg fee de e*d trd .e ted y t re pnde h itni t alas t#Ci e Mar ace.. 3 -t e cc Co arabic oro ii N o*n 4k Ia h a&, d f ge ii nt t t • lit an I 0 a t at 0 4 0 r on t C e a a C —10— any other reason the aealer concerned had agreed to pq and/or paia the saic amount to avoid protection In aada a can tne dealer corcerned would npve the r.gbt to r*erd tLt t e aao’nt demanaed was not authori sed by law and therefore Just beeau e the dealer tad acceptea to pay the amount and have the of fèwe colpcuna 8..d, he cannot be precluded from challenging the action of t 1 ie autho rifles on the ground tbz the coils ticn of compoun big fee beyond the m2xi u prer tibed ndcr tb’ hot was illegal. Th is ex 5 ctly the pontion in t i’ 0 Se, in that th maximum anount th could have been collected s comouncling fee was it. , 00/- and a.. aouble tnat anount nt-s been collecte, the reapc.ndex* hdtnen*tt c lenettw’ legality of the levy.” With great respect, it bs to a held th:* the above sE4a ,i ie lip 4 on tot ote nSast as eli Tb eor , siof te ,i w th sth aeci -ion relied on ty the learnen ‘overnmext Pleader in ..t.Lo.294t/96 ‘8° mains.y decid ortne conduct o ... at r So ‘ n’ij&e tfl3 is .ft 1 t tt it of th’ \Th4 CSt. S S ‘I. — 11 — La cud’ foilo-ing The ‘aid cPcision I jiow this Writ Petitior. Tie excess aniour t of i’.24 0)00/a coliectea from the petitioner a’ coaosition fee 411 be ‘efunded to the pditioner within six weekt from t “dq. Tie dr’t )etit rn is di go ed of sita the tjg) din non. Tnere vii e n oruer as t costs. • Sd/s ntnr ‘U’ t 1 ’bJ 112 Jt a a— •