Operative appellate order governs arrears settlement; pending appeal cannot revive the original assessment for rejection.

Under a statutory arrears settlement scheme, the operative demand must be assessed with reference to the appellate order, not the original assessment, unless that appellate order has been stayed or set aside. A pending appeal does not by itself permit the revenue to ignore the appellate order or treat the original assessment as the basic demand for settlement purposes. On that footing, rejection of the settlement application based on the original assessment was unsustainable and was set aside, with directions to consider the application in accordance with law.

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Issues: Whether the rejection of the petitioner's application under the Tamil Nadu Sales Tax Settlement of Arrears Act, 2010 was sustainable when the department treated the original assessment as the basic demand solely because appeals against the appellate order were pending.

Analysis: The scheme under the Tamil Nadu Sales Tax Settlement of Arrears Act, 2010 requires the applicant to seek settlement in accordance with the statutory rates and procedure, and the designated authority must examine the application on that footing. The reason for rejection was identical to an earlier case where this Court had already held that once an appellate authority has passed an order, the original assessment is superseded unless stayed or set aside, and pending cross-appeals do not justify ignoring the appellate order for the purpose of the settlement scheme. The Court followed that view and held that the impugned rejection rested on an unsustainable premise.

Conclusion: The rejection of the settlement application was not sustainable and was set aside; the authority was directed to entertain the application and pass orders in accordance with law.

Final Conclusion: The writ petition succeeded, and the petitioner obtained reconsideration of its settlement application on the basis of the applicable appellate position, without prejudice to the pending tax appeals.

Ratio Decidendi: For settlement under a statutory arrears scheme, the demand must be assessed with reference to the operative appellate order, and a pending appeal does not permit the revenue to revert to the original assessment unless the appellate order has been stayed or set aside.

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