The Sunset Law was indeed a part of the Permanent Settlement system implemented by the British East India Company in 1793 under the leadership of Lord Cornwallis.
The Permanent Settlement was a land revenue system introduced in Bengal, which aimed to create a stable tax revenue system by fixing the land revenue at a permanent rate. It required zamindars (landlords) to pay a fixed amount of land tax to the British, in return for the rights to collect taxes from peasants. Under this system, the zamindars were made the owners of the land, though they often didn't personally cultivate it.
The Sunset Law was a provision within the Permanent Settlement that stipulated that if a zamindar failed to pay the fixed land revenue, the land would be auctioned off, and the ownership would be transferred to the highest bidder. This law was designed to ensure that the British East India Company would receive its land revenue without delay. The term "sunset" was used because the land would be taken away from the original owner and sold, effectively marking the end of their ownership.
While the Sunset Law helped the British maintain a steady revenue stream, it also led to the dispossession of many zamindars and created instability in the rural agrarian system. Over time, the Permanent Settlement and the Sunset Law contributed to the consolidation of power among a few wealthy zamindars and commercial interests, often to the detriment of the peasantry.