An offence under Companies Act, 2013 was compounded by RST 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 default. C

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 situation, the action of Compounding Authority may not be tenable as offence is compounded, order is passed and compounding fees has been paid by RST Ltd. Compounding Authority does not have the authority to undo the whole process of compounding even if they come to know that suppression of fact was higher while deciding compounding fee.