(1) Notwithstanding anything contained in the relevant State Taxation Acts or under this Act,-
(a) any payment made in respect of the statutory order either in the appeal or otherwise, on or before the date of commencement of this Act, shall first be adjusted towards the amount of tax and thereafter towards the interest and the balance amount remaining unadjusted, shall then be adjusted towards the penalty, sequentially;
(b) after adjustment of amount as specified in clause (a), the amount remaining outstanding, if any, as on the date of commencement of this Act, shall only be considered for the settlement and the requisite amount payable towards the settlement of aforesaid outstanding amount and the waiver, thereof, shall be as determined in accordance with the provisions of this Act.
(2) The provisions of foregoing clauses shall be applicable with necessary changes to the balance outstanding dues as per the return furnished for the particular tax period or, as the case may be, as per the recommendations made in respect of tax, interest, surcharge or penalty by the auditor in the audit report.