(1) Where it appears to the Settlement Commission that an application under rule 266C is in order, the Settlement Commission shall serve a notice to the dealer directing him to appear and produce before him such accounts, registers, documents including those in the form of electronic record or other evidence as the dealer wishes to rely on in support of his application on the date and at the time and place specified in such notice:

Provided that the dealer, may. at its option revise the terms and conditions of settlement as submitted by him in Form 56A any time before the completion of hearing by such Settlement Commission.

(2) The Settlement Commission shall fix date for hearing of the application for Settlement ordinarily not less than fourteen days from the date of issue of the notice referred to in sub-rule (1).

(3) Where the Settlement Commission decides to adjourn the hearing either upon application or on his own motion, the period of such adjournment shall not ordinarily exceed more than seven days at a time:

Provided that total number of such adjournments granted to the dealer upon application or on his own motion shall not ordinarily exceed three.

(4) After hearing the dealer and considering the account, registers, documents, including those in the form of electronic record or evidence produced by him, the Settlement Commission shall, refer the matter to the Commissioner with their comments, if any.

(5) Where the Commissioner on reference of the application under sub-rule (4) expresses that the case is not a fit case for Settlement, the Settlement Commission on receipt of such views of the Commissioner shall reject the application unless the dealer agrees to such counter proposal, if any, given by the Commissioner.

(6) Where the Commissioner on reference of the application under sub-rule (4) agrees to the terms and conditions of the dealer, or where the dealer agrees to the alternative proposal, if any, given by the Commissioner, the Settlement Commission shall prepare a report containing inter alia the terms and conditions of Settlement.

(7) The Settlement Commission shall send the report as prepared under sub-rule (6) to the State Government for approval, and after receiving such approval send a copy of such report to the Commissioner and shall direct the dealer to pay the amount as agreed upon within a date to be specified therein.

(8) Where the dealer pays the amount as directed by the, Settlement Commission in accordance with the provision of sub-rule (7), the Settlement Commission shall settle the case and shall accordingly inform the Commissioner, the appropriate assessing authority and the dealer:

Provided that where the dealer fails to make the payment of such amount within the date specified or within such further date as may be alIowed by the Settlement Commission, the application shall stand rejected and the Settlement Commission shall accordingly inform the Commissioner, the appropriate assessing authority and the dealer.