Facts of the Case

  • Order dated 09.03.2018 rejecting his application for compounding of offences under Section 279(2) of the Act.
  • Order dated 30.05.2019 rejecting the rectification application against the earlier order.

The rejection was primarily based on the allegation that the petitioner failed to furnish complete bank statements of accounts held in HSBC Bank, Geneva Branch.

The petitioner contended that:

  • Consent waiver forms were duly submitted.
  • Bank statements for the relevant period were available and eventually furnished (including in November 2019).

The Revenue argued that the petitioner did not provide the bank statements at the appropriate stage during consideration of the compounding application.

Issues Involved

  1. Whether rejection of compounding application due to non-submission of bank statements was justified.
  2. Whether subsequent submission of bank statements warranted reconsideration.
  3. Whether the authority should re-adjudicate the compounding application afresh.

Petitioner’s Arguments

  • Consent waiver forms were submitted when requested.
  • Bank statements were available and eventually provided.
  • Rejection was unjustified as compliance was substantially made.
  • Requested either compounding of offences or reconsideration of application de novo.

Respondent’s Arguments

  • Petitioner failed to furnish bank statements at the relevant time.
  • Proper compliance was not made during the initial consideration stage.
  • Had documents been submitted earlier, the situation would not have arisen.

Court’s Findings / Order

  • Since bank statements were now available, the matter required reconsideration.
  • The earlier orders dated 09.03.2018 and 30.05.2019 were set aside.
  • The competent authority was directed to:
    • Decide the compounding application afresh.
    • Provide personal hearing to the petitioner.
    • Seek further information, if required.
    • Pass a reasoned (speaking) order.
    • Complete the process within 8 weeks.
  • Interim protection granted earlier was to continue until fresh decision and for 3 weeks thereafter (if adverse).
  • The Court clarified that no opinion on merits was expressed.

Important Clarifications by the Court

  • Reconsideration is justified where material documents become available later.
  • Authorities must adopt a fair and pragmatic approach in compounding matters.
  • Passing a speaking order is mandatory.
  • Opportunity of personal hearing must be granted.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS08112023CW120912019_135854.pdf

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