Optional tax settlement schemes may validly bar refund of excess payment when accepted voluntarily under their terms.

An optional fiscal settlement scheme that permits an assessee to resolve pending tax disputes on agreed terms is valid even though it denies refund of excess payment over the amount determined under the scheme. The court reasoned that a person who voluntarily elects to take the benefit of such a concession is bound by its conditions, and that greater legislative latitude applies in fiscal matters. The refund bar was therefore not unconstitutional under Article 14 merely because it may operate harshly in individual cases. Section 6(4) was upheld, the Tribunal's contrary view was set aside, and the Revenue succeeded.

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Issues: Whether section 6(4) of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002, which denies refund of excess amount paid over the amount determined under the settlement scheme, is unconstitutional as violative of article 14 of the Constitution of India.

Analysis: The settlement scheme was enacted to provide an optional and hassle-free mechanism for resolving tax disputes pending in appeal or revision. An assessee who voluntarily elects to take advantage of such a beneficial statutory scheme, with full knowledge of its conditions, is bound by the terms of the scheme. In fiscal legislation, greater latitude is available to the Legislature, and a provision that fixes the manner of settlement and excludes refund of excess payment cannot be struck down merely because it may operate harshly in individual cases. The optional nature of the scheme and the absence of compulsion support the validity of the condition attached to the concession.

Conclusion: Section 6(4) is not violative of article 14 and is valid. The Tribunal's contrary declaration is unsustainable.

Final Conclusion: The challenge to the settlement provision failed and the Revenue succeeded in having the Tribunal's order set aside.

Ratio Decidendi: A statutory settlement scheme in fiscal matters, when made optional and accepted voluntarily, binds the applicant to all its terms, and a condition denying refund of excess payment is not unconstitutional merely because it limits the benefit conferred by the scheme.

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