Kar Vivad Samadhan Scheme cannot reopen finally adjudicated duty liabilities; statutory exclusions bar relief where no dispute is pending.

The Kar Vivad Samadhan Scheme applied only to pending or disputed tax arrears as on the relevant date, and it could not revive a duty liability already finally adjudicated and merely being implemented through later RT-12 endorsements. Where no qualifying demand notice or pending indirect-tax proceeding existed, the declaration fell within the statutory exclusions under Section 95(ii)(b) and Section 95(ii)(c) of the Finance (No. 2) Act, 1998. Writ relief was also treated as inappropriate where the duty burden had been passed on to customers and reopening the concluded liability would confer an undue benefit.

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Issues: (i) Whether the declaration under the Kar Vivad Samadhan Scheme was maintainable in respect of the RT-12 determined duty; (ii) Whether the declaration was hit by the exclusion in Section 95(ii)(b) and Section 95(ii)(c) of the Finance (No. 2) Act, 1998; (iii) Whether any writ relief should be granted.

Issue (i): Whether the declaration under the Kar Vivad Samadhan Scheme was maintainable in respect of the RT-12 determined duty.

Analysis: The Scheme was intended to settle pending tax disputes and tax arrears outstanding as on 31 March 1998. The duty liability in question had already been crystallised by the final order of the Delhi High Court, which was affirmed by dismissal of the special leave petition. The later RT-12 endorsements merely implemented that final adjudication and completed the accounting adjustment against the bank guarantees. They did not create a fresh disputed demand capable of being brought within the Scheme.

Conclusion: The declaration was not maintainable under the Scheme.

Issue (ii): Whether the declaration was hit by the exclusion in Section 95(ii)(b) and Section 95(ii)(c) of the Finance (No. 2) Act, 1998.

Analysis: For the Scheme to apply in indirect tax matters, there had to be either a show cause notice or notice of demand in the relevant sense, or an appeal, reference, writ petition, or revision pending on the date of declaration. On the facts found, neither a qualifying demand notice nor any pending indirect-tax dispute existed. The RT-12 endorsement was treated as an of the concluded court order, not as a live notice of demand. The pending civil proceedings concerning bank guarantees were also outside the Scheme's contemplated tax-litigation field.

Conclusion: The declaration was excluded by Section 95(ii)(b) and Section 95(ii)(c).

Issue (iii): Whether any writ relief should be granted.

Analysis: The petitioner had recovered the duty burden from customers, and granting the relief would have resulted in retention of an undue benefit. Writ jurisdiction was therefore not considered appropriate to reopen a concluded liability or confer an advantage inconsistent with equity.

Conclusion: No writ relief was granted.

Final Conclusion: The petition failed because the Scheme did not cover a concluded and implemented duty liability, no qualifying pending tax dispute existed, and equitable writ relief was inappropriate.

Ratio Decidendi: The Kar Vivad Samadhan Scheme applies only to pending or disputed tax arrears falling within its statutory exclusions, and it cannot be used to reopen a liability already finally adjudicated and merely being executed.

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