Kar Vivad Samadhan Scheme immunity does not extend to non-declarants or separate criminal offences outside the settled tax matter.

Immunity under the Kar Vivad Samadhan Scheme was confined to the matters covered by the declarant's settlement under the tax enactment and did not extend automatically to a non-declarant or to distinct offences under the Indian Penal Code or the Prevention of Corruption Act. The Court treated the alleged false representation to the bank and procurement of a false certificate as independent criminal acts, outside the scope of the settlement certificate issued to the declarant for tax arrears. Later decisions narrowing earlier observations on the Scheme were applied, and the criminal prosecution was held maintainable.

---

---

Issues: Whether the immunity under the Kar Vivad Samadhan Scheme extended to the appellant, who was not the declarant, so as to bar prosecution for offences under the Indian Penal Code and the Prevention of Corruption Act arising out of the same customs transaction.

Analysis: The Scheme under the Finance Act (No. 2) of 1998 granted immunity only in respect of matters covered by the declaration under Section 88 and only for offences under the relevant direct or indirect tax enactments. The conclusive settlement certificate was issued to the declarant in relation to tax arrears under the Scheme, but the appellant neither made the declaration nor obtained immunity in his own favour. The alleged acts of making a false representation to the bank and procuring a false certificate were treated as an independent criminal act and not as a matter covered by the declaration. The later decisions limiting the breadth of earlier observations on the Scheme were applied, and it was held that immunity under the Scheme did not automatically extend to other persons or to distinct offences under the Penal Code or the Prevention of Corruption Act.

Conclusion: The appellant was not entitled to immunity under the Scheme, and the prosecution could proceed.

Final Conclusion: The appeals failed, and the criminal proceedings were upheld as maintainable.

Ratio Decidendi: Immunity under the Kar Vivad Samadhan Scheme is confined to matters covered by the declarant's settlement under the tax enactment and does not automatically extend to a non-declarant or to separate offences under other penal laws unless there is a direct and proximate nexus with the settled tax liability.

---