Settlement of arrears applications require proper record verification before rejection; erroneous assumptions about pending arrears cannot stand.

Under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010, the designated authority must verify the application, payment details and statutory conditions before rejecting a settlement claim; rejection is not justified on an incorrect assumption that arrears were not pending when the scheme commenced. Where appellate orders had modified the assessment and revised assessment orders had not yet been passed, the assessee could not be faulted for that omission, and the authority had to examine the complete records or require revised orders before deciding the application on merits. The rejection orders were quashed and the applications were remanded for fresh consideration in accordance with law.

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Issues: Whether the rejection of the applications under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010 was sustainable, and whether the matter required reconsideration after the assessment records were properly aligned with the appellate orders.

Analysis: The scheme under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010 requires the applicant to present the application with proof of payment computed under Section 7, while the designated authority must verify the particulars under Section 6(1). If there is a shortfall, further payment may be demanded under Section 6(2), but rejection under Section 6(3) follows only where the statutory conditions are not met. The Act is a settlement scheme and must be applied strictly, yet the authority must also examine the relevant records and cannot reject an application on an erroneous assumption that the arrears were not pending for collection when the scheme came into force. Where the appellate orders had altered the assessment and the assessing officer had not passed revised orders, the assessee could not be blamed for that omission, and the proper course was to obtain the full files or direct passing of revised assessment orders before deciding the applications on merits.

Conclusion: The rejection orders were unsustainable and were quashed, and the applications were remanded to the designated authority for fresh consideration in accordance with law.

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