According to Anil Harish, a tax expert, the revenue department has been a major litigant. And if cases filed by the department are not withdrawn the purpose of Samadhan to reduce litigation will remain defeated.

Harish said that even the public sector units have piled on huge tax arrears and these should be allowed to come under the scheme. According to him, the Oil & Natural Gas Corporation (ONGC) and the Punjab National Bank (PNB) have accumulated arrears of around Rs 2,100 crore and Rs 485 crore, respectively.

Concurring with HC Parikh, commissioner of income tax, Harish said that Samadhan will not only help in putting an end to unnecessary litigation but also conserve energy of assessees which is frittered away while pursuing the appeals. Samadhan was launched in Mumbai on Saturday by Parikh at a functionorganised by the Western India Chamber of Commerce.

However, he felt that Samadhan is narrower in its scope as against VDIS '97, which in its later stage covered vast areas. Citing ambiguities contained in Samadhan, Harish said that in case of withdrawal of appeals before high court and Supreme Court, the scheme calls for applying to get a consent of the court.

Widen samadhan scheme ambit, say tax practitionersÎContinued from Page 1However, the scheme does not lay the same procedure for withdrawal of appeal before the Commissioner of Income Tax (CIT)-Appeals and the Income Tax Appellate Tribunal (ITAT).

"The CIT-Appeals has special powers of making additions which are not made by the assessing officer. In view of these, there is need for a proper clarification that even the consent of the CIT ( appeals) should be sought by making a proper application", he said.

Similarly, in case of delayed applications it is not clear whether the appeal can be said to pending. "Before the high court and Supreme Courtthe appeals can be either admitted or rejected unlike before CIT-Appeals and ITAT where there is no formal admission", Harish said. All appeals filed before these first and second appellate authorities are considered admitted even if filed late alongwith an application for condonation of delay, he elaborated. "So can applications filed after a year's delay come under Samadhan?" he asked.

Under the Samadhan the assessees charged under chapter 9 ( dealing with corruption of public servants) and chapter 17 (theft of property) of the Indian Penal Code, cannot avail the scheme.

Harish felt that the scheme should be open to all persons including those booked under special court (Trial of Offences relating to Transactions in Securities) Act, Narcotic Drugs and Psychotropic Substances Act, Terrorist & Disruptive Activities (Prevention) Act and the Prevention of Corruption Act.

According to Arun Sathe, advocate, the taxpayers are entitled to reliefs in such cases and situations where revenue department is thelitigant. Shailesh Sheth, advocate and expert in central excise and custom matters, said that the government should also show willingness to reduce litigation considering the fact that over 80 per cent of the department's appeals are rejected by the appellate authorities.

Citing a grey area, Sheth said that Samadhan does not make clear whether a designated authority can go into the correctness of the demand raised by the department.

"Sometimes the demands raised in the show cause notice (in case of excise department) are arbitrary and are decided only after the matter is adjudicated", he said. Also, it is not clear whether in cases of a abetment in frauds like clandestine removal of goods from the factory where the abettor is by an employee or manager, if the company comes under the Samadhan, will the prosecution case against the abettor gets automatically withdrawn.

Similarly, in the direct taxes, if a partnership firm avails the benefit of Samadhan for tax additions, does the partners get immunity forthese additions.