Settlement application pendency bars appellate disposal; ex parte rejection without notice or hearing is invalid.

Section 11 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 stayed appellate proceedings for the covered period until the settlement application was lawfully disposed of, so the appellate authority lacked jurisdiction to decide the tax appeal while that application remained pending. The appellate order was therefore set aside. The purported rejection of the settlement application was also invalid because it was passed ex parte without notice or hearing, contrary to natural justice, and the delayed communication did not cure the defect. The settlement application must be decided first in accordance with law; only after a lawful rejection can the appeal revive for hearing on merits.

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Issues: (i) whether the appellate authority could dispose of the tax appeal while the dealer's application for settlement under the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 was pending; (ii) whether the purported rejection of the settlement application, passed without notice or hearing, could be sustained.

Issue (i): whether the appellate authority could dispose of the tax appeal while the dealer's application for settlement under the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 was pending.

Analysis: Section 11 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 bars the appellate or revisional authority from proceeding to decide an appeal or revision in respect of a period covered by an application made under section 5 of the Act. The scheme requires the appeal to remain in abeyance until the settlement application is disposed of, and section 13 obliges the designated authority to keep the appellate authority informed of the fate of such application. The appellate authority disposed of the appeal despite this statutory restraint and without proper intimation of any lawful disposal of the settlement application.

Conclusion: The appellate order was unsustainable and was set aside as having been passed in disregard of the statutory bar.

Issue (ii): whether the purported rejection of the settlement application, passed without notice or hearing, could be sustained.

Analysis: The purported order rejecting the settlement application was stated to have been passed ex parte, without issuing notice to the dealer or affording an opportunity of hearing. The order was also communicated belatedly, and no intimation was sent to the appellate authority as required by section 13. In these circumstances, the order suffered from breach of natural justice and could not be sustained.

Conclusion: The purported rejection of the settlement application was set aside.

Final Conclusion: The settlement application must be considered first in accordance with law, and only if it is lawfully rejected will the appeal revive for hearing on merits.

Ratio Decidendi: Where a settlement scheme statutorily stays appellate proceedings pending disposal of the settlement application, the appellate authority lacks jurisdiction to decide the appeal until the application is lawfully concluded, and any rejection of the settlement application made without notice and hearing is invalid.

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