VAT settlement applications may warrant interim protection against coercive recovery until the authority decides them.

Pending disposal of a taxpayer's application under the VAT settlement scheme, coercive recovery should not proceed where the statutory framework contemplates meaningful consideration of the application and interim protection is necessary to preserve the remedy. Relying on its earlier approach in an identical matter, the Court directed the Settlement Authority to decide the application within a fixed time-frame and restrained recovery action until that decision is taken. The operative effect is that settlement applicants may receive interim protection against coercive measures while their applications remain undecided.

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Issues: Whether, pending disposal of the petitioner's application for settlement under the VAT settlement provisions, the authorities could proceed with recovery and other coercive action, and whether a direction for expeditious decision of the application was warranted.

Analysis: The petitioner had already moved the Settlement Authority under the settlement scheme. The statutory scheme contemplated consideration and disposal of such application in accordance with law, and the protection against penal action after settlement indicated that the application was intended to operate as a meaningful interim remedy pending final decision. In the identical earlier matter, the Court had directed expeditious disposal of the settlement application and restrained coercive recovery meanwhile. Following the same approach, the Court found it appropriate to grant similar protection and to require the Settlement Authority to decide the matter within a fixed time-frame.

Conclusion: The petitioner was held entitled to protection against coercive recovery till the settlement application was decided, and the Settlement Authority was directed to dispose of the application expeditiously.

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