(1) The prescribed authority may, whether on application made to it in this behalf or otherwise, give any person, who has committed or is reasonably suspected of having committed an offence under this Act, option to pay within a specified period, by way of composition of such offence --
(a) where the offence consists of failure to pay, or attempt to evade or evasion of, any tax payable under this Act, in addition to the tax so payable, a sum of money not exceeding rupees two thousand or double the amount of the tax payable, whichever is greater, and
(b) in other cases, a sum of money not exceeding rupees two thousand.
(2) On payment of such sum of money and the tax, if any, payable under this Act, no prosecution for an offence under this Act shall be instituted in respect of the same facts on which a composition has been allowed under this Section.
(3) Where the prescribed authority, on application made under sub- section (1), passes an order refusing to allow composition under this section, it shall record in writing the reasons therefore and furnish to the applicant on request a brief statement of the same unless in any case the prescribed authority is of the opinion that it will not be in the public interest to furnish such statement.