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Issues Involved:
1. Constitutionality of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order, 1998 under Article 14 of the Constitution of India. 2. Applicability of the Scheme to co-noticees whose show-cause notices have been adjudicated and are pending appeal. Issue-wise Detailed Analysis: 1. Constitutionality of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order, 1998 under Article 14 of the Constitution of India: The petitioners sought a declaration that the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order, 1998, is ultra vires Article 14 of the Constitution of India. They argued that the Order is discriminatory because it does not extend benefits to co-noticees whose show-cause notices have been adjudicated and penalties imposed, even though appeals are pending. The petitioners contended that all co-noticees belong to the same class and should not be discriminated against based on the stage of adjudication. The court noted that the Scheme aimed to reduce litigation and settle disputes efficiently. The Removal of Difficulties Order was issued to address situations where the principal noticee had settled under the Scheme, but co-noticees were still facing proceedings. The Order extended benefits to co-noticees only if their show-cause notices were pending adjudication. The court found that the term "is pending adjudication" should be interpreted to include cases where appeals against adjudication are pending. Thus, the court declared that co-noticees like the petitioners are covered by the Order, even if their show-cause notices have been adjudicated and are pending appeal. 2. Applicability of the Scheme to co-noticees whose show-cause notices have been adjudicated and are pending appeal: The petitioners argued that the benefits of the Scheme should extend to co-noticees whose show-cause notices have been adjudicated and are pending appeal. They contended that the expression "is pending adjudication" in the Removal of Difficulties Order should include cases where appeals are pending. The court examined the meaning of "is pending adjudication" and referenced the Supreme Court's decision in Mathew M. Thomas v. CIT [1999] 236 ITR 691, which held that the term "proceedings" includes appellate stages. The court concluded that the expression "is pending adjudication" should be interpreted to include cases where appeals against adjudication proceedings are pending. Therefore, the petitioners are entitled to the benefits of the Scheme, and their claims cannot be rejected solely because the matter is pending in appeal. Conclusion: The court allowed the original petitions and declared that co-noticees like the petitioners are covered by the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order, 1998, even if their show-cause notices have been adjudicated and are pending appeal. The court ordered that the amount deposited by the petitioners (Rs. 1 lakh) be refunded within two months, failing which it would carry an interest of 18% from the date of the judgment until the date of refund.
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