Settlement scheme applications require defect rectification before rejection; summary dismissal without opportunity to cure short payment is unsustainable.

Under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011, a settlement application cannot be summarily rejected for alleged short payment or defect without following the prescribed verification and rectification process. If the designated authority finds an omission or a shortfall within the scheme's permissible limit, it must give the applicant an opportunity to cure the defect and, where required, return the application for rectification within ten days. The Madras HC held that rejection without allowing correction of the working sheet was unsustainable, and the application had to be reconsidered in accordance with law.

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Issues: Whether the assessee was entitled to avail the Samadhan Scheme under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011 when the application was rejected for alleged non-compliance with the payment condition, and whether the designated authority was bound to return the application for rectification of defects before summarily rejecting it.

Analysis: The statutory scheme required the designated authority to verify the application, demand any shortfall within the permissible limit, and summarily reject the application only if the applicant had not paid ninety per cent of the amount payable along with the application. The Rules further provided that if the authority found any defect or omission in the application, it had to return the application for rectification within ten days. The rejection in the present case was made without giving the assessee an opportunity to correct the working relating to the taxable turnover, even though the assessee asserted that, on correction, the balance payable could fall within the permissible limit under the scheme.

Conclusion: The rejection was unsustainable and the assessee was entitled to have the application reconsidered after being given an opportunity to produce the relevant working sheet.

Final Conclusion: The writ appeal succeeded, the earlier order was set aside, and the matter was sent back to the designated authority for fresh consideration in accordance with law.

Ratio Decidendi: Where a settlement application under a statutory arrears scheme is said to be defective or short-paid, the designated authority must follow the prescribed procedural safeguard for rectification before resorting to summary rejection.

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