Mandatory hearing before settlement refusal and statutory appellate authority is not a "Court" under the arrears settlement scheme.

The proviso to Section 8(2) of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011 required a reasonable opportunity to show cause before refusal of a settlement application; because no such opportunity was given, the rejection was invalid. Section 4's reference to a pending appeal before a "Court" was held distinct from an appeal before a statutory appellate authority under the Tamil Nadu General Sales Tax Act, 1959, and the two expressions were not interchangeable. A statutory appellate authority has only the trappings of a court and is not a "Court" for Section 4, so the settlement application could not be rejected on that basis. The matter was remitted for fresh disposal in accordance with law.

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Issues: (i) Whether refusal to consider the settlement application without giving the applicant a reasonable opportunity of showing cause was contrary to the proviso to Section 8(2) of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011; (ii) Whether a pending appeal before a statutory appellate authority under the Tamil Nadu General Sales Tax Act, 1959 amounted to an appeal pending before a "Court" so as to attract Section 4 of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011.

Issue (i): Whether refusal to consider the settlement application without giving the applicant a reasonable opportunity of showing cause was contrary to the proviso to Section 8(2) of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011.

Analysis: The proviso to Section 8(2) made it mandatory that no refusal order be passed without giving the applicant a reasonable opportunity of showing cause against such refusal. The record showed that no such opportunity was afforded before the rejection order was made. The statutory safeguard was therefore not complied with.

Conclusion: The refusal order was invalid on this ground and the issue was decided in favour of the petitioner.

Issue (ii): Whether a pending appeal before a statutory appellate authority under the Tamil Nadu General Sales Tax Act, 1959 amounted to an appeal pending before a "Court" so as to attract Section 4 of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011.

Analysis: Section 4 used the expression "Court", while Section 10 of the same Act separately referred to "appellate authority". The two expressions were treated as distinct and not interchangeable. A statutory appellate authority created under the sales tax enactment had only the trappings of a court and did not become a court merely because it exercised adjudicatory functions. The pending appeal before the statutory appellate authority therefore did not disqualify the settlement application under Section 4.

Conclusion: A statutory appellate authority is not a "Court" for Section 4, and the rejection on that basis was unsustainable.

Final Conclusion: The rejection of the settlement application was set aside and the matter was sent back for fresh disposal on merits after compliance with law, leaving the petitioner entitled to reconsideration of the application under the settlement scheme.

Ratio Decidendi: Where a settlement statute distinguishes between a "Court" and an "appellate authority", a pending appeal before a statutory appellate authority does not satisfy a condition framed in terms of pendency before a Court, and any refusal under a provision requiring prior notice must comply with the mandatory requirement of a reasonable opportunity of hearing.

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