Settlement application rejection was unsustainable where no deficit notice was issued in time and the order came without jurisdiction.

A settlement application filed with the admitted payment could not be rejected when the authority failed to intimate any deficit within the prescribed time under Rule 3(5). The matter remained pending for years, and the eventual rejection was issued by a respondent who lacked jurisdiction over proceedings that had been initiated and were still pending before another respondent. On these facts, the rejection was procedurally unfair and beyond jurisdiction. The rejection order was set aside and the settlement matter was remitted to the first respondent for fresh consideration on merits in accordance with law.

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Issues: Whether the rejection of the settlement application was sustainable when no demand for deficit payment was made within the time prescribed and the matter was decided after an inordinate delay by an lacking jurisdiction.

Analysis: The application under the settlement scheme was filed along with the admitted payment, and the revenue did not dispute credit for that amount. Rule 3(5) required the authority to intimate any deficit within the stipulated time, but no such communication was issued and the matter remained pending for years. The impugned rejection was then passed by the second respondent although the proceedings had been initiated and were still pending before the first respondent. In these circumstances, the rejection was held to be both procedurally unfair and beyond jurisdiction.

Conclusion: The rejection order was unsustainable and liable to be set aside.

Final Conclusion: The settlement matter was remitted to the first respondent for fresh consideration on merits in accordance with law.

Ratio Decidendi: Where a settlement application requires prompt intimation of any deficit and the authority fails to act within the prescribed time, a belated rejection without affording opportunity to rectify the deficit is unsustainable, particularly when passed by an without jurisdiction.

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