An offence under Companies Act, 2013 was compounded by Aarav Foods Ltd and compounding order was issued by the compounding authority specially for offences by the Company and the Directors of the Company as officer in de

It is well settled principle that once an offence is compounded, penalty or prosecution proceeding cannot be taken for same offence. (PP Varkey V. STO) In S Vishwanathan v. State of Kerala, it was held that once the matter is compounded, neither department nor assesse can challenge the compounding order. Department cannot reopen the matter on the reason that actual suppression was much higher. In the given case, the action of Compounding Authority is not tenable w.r.t. offence already compounded, as the order is passed and compounding fees has been paid by Aarav Foods Ltd. Compounding Authority has no authority to undo the whole process of compounding even if they come to know that suppression of fact was higher while deciding compounding fee, unless the additional facts revealed at the later stage indicates occurrence of some offence other than the once already compounded.