16. Procedure for settlement on receipt of an application under section 15
(1) On receipt of an application under sub-section (1) of section 15, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant to explain in writing as to why the application made by him should be allowed to be proceeded with, and after taking into consideration the explanation provided by the applicant, it shall, within a period of forty five days from the date of the notice, by an order, allow the application to be proceeded with, or reject the application as the case may be, and the proceedings before the Settlement Commission shall abate on the date of rejection :
Provided that an application shall not be rejected unless an opportunity has been given to the applicant of being heard;
Provided further that where no notice has been issued or no order has been passed within the aforesaid period by the Settlement Commission, the application shall be deemed to have been allowed to be proceeded with.
(2) A copy of every order under sub-section (1), shall be sent to the applicant and to the jurisdictional IGST officer.
(3) Where an application is allowed under sub-section (1), the Settlement Commission shall, within seven days from the date of order under sub-section (1), call for a report along with the relevant records from the jurisdictional IGST officer and such officer shall furnish the report within a period of sixty days of the receipt of communication from the Settlement Commission:
Provided that where the jurisdictional IGST officer does not furnish the report within the aforesaid period of sixty days, the Settlement Commission shall proceed further in the matter without the report of the said officer.
(4) After examination of the report of the jurisdictional IGST officer received under subsection (3), if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may, within 15 days of the receipt of the report, direct, for reasons to be recorded in writing, the Designated Officer to make such further enquiry or investigation and furnish a report within a period of ninety days of the receipt of such direction, on the matters covered by the application and any other matter relating to the case :
Provided that where the Designated Officer does not furnish the report within the aforesaid period, the Settlement Commission shall proceed to pass an order under subsection (5) without such report.
(5) After examination of the records and the report of the jurisdictional IGST officer received under sub-section (3), and the report, if any, of the Designated Officer under sub-section (4), and after giving an opportunity to the applicant and to the jurisdictional IGST officer to be heard, either in person or through an authorised representative, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the jurisdictional IGST officer and Designated Officer under sub-section (3) or sub-section (4), as the case may be.
Explanation.- For the purposes of this sub-section, “authorised representative” shall have the meaning assigned to it in section 86 of the CGST Act.
(6) An order under sub-section (5) shall not be passed in respect of an application after twelve months from the last day of the month in which the application was made, failing which the settlement proceedings shall abate, and the adjudicating authority or the First Appellate Authority, as the case may be, before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 15 had been made.
Provided that the period specified under this sub- section may, for reasons to be recorded in writing, be extended by the Settlement Commission for a further period not exceeding three months.
(7) For the purposes of the time limit under section 51 or section 79, as the case may be, of the CGST Act and for the purposes of interest under section 36 of the said Act, in a case referred to in sub-section (1) or sub-section (6), as the case may be, the period commencing on and from the date of the application to the Settlement Commission under section 15 and ending with the date of abatement, shall be excluded.
(8) The order passed under sub-section (5) shall provide for the terms of settlement including any demand by way of tax, interest, fine or penalty, the manner in which any sums due under the settlement shall be paid and all other matters to make the settlement effective and in case of rejection contain the reasons therefor:
Provided that the amount of settlement ordered by the Settlement Commission shall not be less than the tax liability admitted by the applicant under section 15.
(9) Settlement arrived under sub-section (5) shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts.
(10) Where any tax, interest, fine and penalty payable in pursuance of an order under sub-section (5) is not paid by the taxpayer within thirty days of receipt of a copy of the order by him, or within such period as extended by the Settlement Commission not exceeding three months, the amount which remains unpaid, shall be recovered along with interest due thereon at the rate prescribed under section 36 of the CGST Act, as the sums due to the Central/ State Government by the jurisdictional IGST officer in accordance with the provisions of section 54 of the CGST Act.
(11) Where a settlement becomes void as provided under sub-section (9), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the jurisdictional IGST officer or the First Appellate Authority, as the case may be, may, notwithstanding anything contained in any other provision of this Act, complete such proceedings before the expiry of two years from the date of the receipt of communication that the settlement became void.
