Arrears settlement scheme rejection set aside where no hearing was given and prior appeal dismissal did not bar eligibility.

Applications under an arrears settlement scheme cannot be rejected without giving the applicant an opportunity to explain its position, especially where the department had already processed the matter and sought further details. Dismissal of earlier appeals does not by itself disqualify a taxpayer from seeking settlement under the scheme, and a later objection about payment by cheque was held to be too late. The Madras HC found the stated reasons for rejection untenable, quashed the impugned orders, and remanded the applications for fresh consideration on merits after personal hearing.

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Issues: Whether the rejection of the applications for settlement under the arrears settlement scheme was sustainable in law.

Analysis: The applications were rejected on grounds including alleged ineligibility, dismissal of prior appeals, and the manner in which the assessments were made. The Court held that the petitioner had not been given an opportunity to explain its position before rejection, despite the matter having been processed and further details sought by the department. It also found that dismissal of earlier appeals did not disqualify the petitioner from invoking the settlement scheme, and that the subsequent objection regarding payment by cheque came too late. The reasons supplied for rejection were therefore held to be untenable.

Conclusion: The rejection of the settlement applications was unsustainable. The writ petitions were allowed, the impugned orders were quashed, and the applications were remanded for fresh consideration on merits after affording personal hearing.

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