VAT settlement applications must be decided expeditiously, with coercive recovery restrained pending disposal subject to undisputed dues.

Where a statutory VAT settlement mechanism is invoked, the competent Settlement Authority must decide the application expeditiously in accordance with the Act and the settlement procedure. Pending that decision, coercive recovery should ordinarily remain restrained, subject to payment of undisputed dues under the scheme. The High Court applied this approach to the petitioner's settlement request and protected the assessee from recovery action until disposal of the application, while directing timely consideration by the authority. No determination was made on the merits of the underlying tax liability.

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Issues: (i) Whether the petitioner's pending settlement application under the VAT settlement scheme was required to be decided expeditiously by the Settlement Authority; (ii) whether coercive recovery could continue pending such settlement proceedings.

Issue (i): Whether the petitioner's pending settlement application under the VAT settlement scheme was required to be decided expeditiously by the Settlement Authority.

Analysis: The dispute was stated to be covered by an earlier decision dealing with the settlement mechanism under Section 24-B of the Madhya Pradesh Value Added Tax Act, 2002 and the procedure under Section 24-C. The settlement framework contemplated decision of the application by the competent authority in accordance with law, with the authority empowered to determine the amount payable and pass an appropriate settlement order.

Conclusion: The Settlement Authority was directed to decide the petitioner's application expeditiously.

Issue (ii): Whether coercive recovery could continue pending such settlement proceedings.

Analysis: The settlement provisions were treated as affording protection to an assessee who had invoked the statutory settlement mechanism, and the earlier decision had directed that no coercive action should be taken until the application was settled, save for undisputed amounts payable under the scheme. That approach was applied to the petitioner's case for the relevant assessment year.

Conclusion: Coercive recovery was restrained pending disposal of the settlement application, subject to payment of undisputed dues.

Final Conclusion: The petition was disposed of by issuing directions to the Settlement Authority to decide the settlement application within a stipulated time and by protecting the petitioner against coercive recovery in the meantime, without any adjudication on the merits of the tax liability.

Ratio Decidendi: Where a statutory settlement mechanism is invoked, the competent authority must decide the application expeditiously, and coercive recovery should ordinarily remain stayed pending such decision, subject to payment of undisputed dues.

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