The most common and most likely answer to this crossword clue is the 10 letter word SANCTIONED
I've seen this crossword clue in The Sunday Telegraph
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More clues leading to the result SANCTIONED
Buddy explains!

The straight part
We know that "Imposed punishment/permitted" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case imposed punishment/permitted = sanctioned.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does SANCTIONED mean?
SANCTIONED verb- To ratify; to make valid.
- To give official authorization or approval to; to countenance.
- To penalize (a State etc.) with sanctions.