Kar Vivad Samadhan Scheme relief depends on legally enforceable tax arrears; protective demands alone do not qualify.

Relief under the Kar Vivad Samadhan Scheme is available only where there is a legally enforceable tax arrear or disputed tax payable under the Act. A protective assessment or protective demand, by itself, does not create such enforceable arrears, so a declaration based only on that footing cannot be maintained. The Scheme's definitions of disputed tax and tax arrears, read with the explanatory material relied on by the Court, require unpaid tax liability that is legally recoverable. The rejection of the declaration was therefore upheld.

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Issues: Whether a declaration under the Kar Vivad Samadhan Scheme could be maintained where the demand arose only from a protective assessment and there were no enforceable tax arrears on the date of declaration.

Analysis: The Scheme was read with its definitions of disputed tax and tax arrears, and the Court held that the scheme contemplates a legally enforceable factual tax arrear that is payable under the Act. A protective assessment or protective demand is not itself a legally enforceable demand in the same manner as a regular assessment demand. The authorities also relied on the explanatory answer to Question 18 of the Scheme, which supports the view that the sum payable is linked to disputed tax remaining unpaid. The precedents cited by the petitioners were distinguished on facts, as they did not involve the same issue under the Scheme's definitions.

Conclusion: The rejection of the declaration was upheld, as the petitioners were not entitled to relief under the Scheme on the basis of a protective assessment or protective demand.

Ratio Decidendi: Relief under the Kar Vivad Samadhan Scheme is available only where there is a legally enforceable tax arrear or disputed tax payable under the Act, and a purely protective assessment or demand does not satisfy that requirement.

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