Settlement order without proper consideration and opportunity was unsustainable, requiring fresh adjudication under the statutory procedure.

A settlement order passed without proper examination of records, investigation, or adequate opportunity to the assessee and the Department did not meet the statutory settlement procedure. Because the Commission acted only to comply with a time-bound direction and did not adjudicate on merits, the order was unsustainable. The assessment or reassessment founded on that settlement order also could not stand, and the matter required fresh consideration by the successor interim Board in accordance with law and due procedure.

---

---

Issues: Whether the order passed by the Settlement Commission was invalid for non-compliance with the requirement of proper consideration under the settlement procedure, and whether the matter ought to be remitted for fresh on merits.

Analysis: The application before the Settlement Commission was disposed of in a manner that expressly recorded that proper examination of records, investigation, and adequate opportunity to the applicant and the Department were not practicable, yet the Commission proceeded to pass a settlement order only to comply with the High Court's time-bound direction. Such an approach did not satisfy the statutory requirement of decision-making under the settlement provision, which contemplated a proper adjudication after following due procedure and giving adequate opportunity. In these circumstances, the settlement order could not be sustained and the subsequent assessment or reassessment founded on that order also could not stand. Since the Commission had not rendered a proper decision on merits, the matter required a fresh adjudication by the successor interim Board.

Conclusion: The settlement order was unsustainable and was rightly set aside. The matter was remitted for fresh decision in accordance with law and after following due procedure, in favour of the assessee only to that extent.

Ratio Decidendi: A settlement order passed without proper consideration, adequate opportunity, and adjudication on merits does not satisfy the statutory scheme and can be set aside with a remand for fresh decision.

---