Settlement scheme applications require notice, verification, and a fair chance to cure short payment before rejection.

An application under a settlement scheme cannot be rejected for alleged short payment without verification of the particulars furnished, notice to the applicant, and a fair opportunity to cure any deficit where the rules permit. Where the application remained pending for an inordinate period and was rejected mechanically without a meaningful hearing or chance to explain the computation, the decision was treated as procedurally flawed and unsustainable. The rejection was set aside, and the matter was remanded for personal hearing, consideration of the assessee's submissions, grant of reasonable time to make good any shortfall if found, and fresh finalisation under the Settlement Act.

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Issues: Whether the rejection of the settlement application for alleged short payment under the Settlement Act was valid when the application had remained pending for several years and the assessee was not afforded an opportunity to rectify any deficit.

Analysis: The application under the settlement scheme was kept pending for an inordinate period and was rejected without prior notice or a meaningful opportunity to the assessee to explain the computation or make good any shortfall. The statutory scheme required verification of the particulars furnished in the application and, where any deficit was noticed, Rule 3(5) contemplated grant of time to cure it. A determination under the settlement provisions could not be made mechanically without affording hearing and an opportunity to produce the relevant records. The Court therefore treated the rejection as suffering from a procedural flaw going to the root of the matter.

Conclusion: The rejection order was unsustainable and was set aside. The matter was remanded to the authority to afford personal hearing, consider the assessee's submissions, grant reasonable time to make good any deficit if found, and then finalise the application under the Settlement Act.

Ratio Decidendi: An application under a settlement scheme cannot be rejected for alleged deficit payment without verification of particulars, notice to the applicant, and a fair opportunity to cure the shortfall where the governing rules so permit.

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