Kar Vivad Samadhan Scheme covers disputed liabilities comprehensively; non-deposit of redemption fine cannot deny settlement benefit.

Under the Kar Vivad Samadhan Scheme, settlement of arrears under section 88 of the Finance (No. 2) Act, 1988 covered disputed tax, duty, penalty, interest and similar liabilities. On the stated facts, the duty had already been paid and only redemption fine remained in dispute. The text treats the Scheme as intended to resolve such liabilities comprehensively, and states that the redemption fine did not survive as a separate enforceable demand once the matter fell within the Scheme. Accordingly, non-deposit of the redemption fine could not justify denial of the certificate of full and final settlement.

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Issues: Whether, under the Kar Vivad Samadhan Scheme, the petitioner was required to deposit the amount demanded towards redemption fine and whether non-deposit of that amount could justify denial of the certificate of full and final settlement.

Analysis: Section 88 of the Finance (No. 2) Act, 1988 was intended to settle arrears of tax, duty, penalty, interest and similar liabilities arising out of disputes. On the facts, the petitioner had already deposited the duty and the only disputed amount was the redemption fine of Rs. 7,500. The Scheme was treated as one for settlement of tax dues and penalty disputes, and the redemption fine was held not to survive as a separate enforceable liability once the matter was brought within the Scheme. Therefore, non-deposit of the redemption fine could not be used to refuse the benefit of the Scheme.

Conclusion: The petitioner was not liable to deposit the redemption fine for availing full and final settlement under the Scheme, and the impugned certificate and consequential letter were unsustainable.

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