( 1 ) ALL India Federation of Tax Practitioners, the petitioner, is a registered body having individual members from all over the country and also represents many associations having the object of protecting the interests of tax payers and tax consultants and to ensure that the direct tax laws are just and fair and are administered justly and fairly. The association is aggrieved by Kar Vivad Smadhan Scheme, 1998 and seeks to lay challenge to its constitutional validity.

( 2 ) KAR Vivad Samadhan Scheme, 1998 (hereinafter the Scheme, for short) is contained in Sections 86 to 98 of the Finance No. (2) Act, 1998. The object of the scheme as explained by the Finance Minister in his speech is:

"litigation has been the bane of both direct and indirect taxes. A lot of energy of the Revenue Department is being frittered in pursuing large number of litigations pending at different levels for long periods of time. Considerable revenue also gets locked up in such disputes. Declogging the system will not only incentivise honest tax-payers, enable Government to realise its reasonable dues much earlier but coupled with administrative measures, would also make the system more user-friendly. I, therefore, propose to introduce a new Scheme called Samadhan. "

( 3 ) WE will shortly notice the grounds of challenge. At the outset, we may set outbriefly the contents of the Scheme and extract and reproduced the relevant parts of the Scheme to the extent necessary to appreciate and adjudicate upon the grounds of challenge.

( 4 ) SECTION 86 specifies that the Scheme may be called the Kar Vivad Samadhan, 1998. It shall come into force on the first day of September, 1998.

4. 1. Section 87 defines a few terms unless the context otherwise requires. The relevant ones are: " (e) "disputed income", in relation to an assessment year, means the whole or so much of the total income as is relatable to the disputed tax; (f) "disputed tax" means the total tax determined and payable, in respect of an assessment year under any direct tax enactment but which remains unpaid as on the date of making the declaration under Section 88; xxxx xxxxx xxxxx xxxx xxxxx xxxxx (m) "tax arrears" means - (i) in relation to direct tax enactment, the amount of tax, penalty or interest determined on or before the 31st day of March, 1998 under that enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration; (ii) in relation to indirect tax enactment, - (a) the amount of duties (including drawback of duty,credit of duty or any amount presenting duty), cesses, interest, fine or penalty determined as due or payable under that enactment as on the 31st day of March, 1998 but remaining unpaid as on the date of making a declaration under Section 88; or 605 (b) the the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty which constitutes the subject matter of a demand notice or a show-cause norice issued on orbefore the 31stday of March, 1998 under that enactment but remaining unpaid on the date of making a declaration under Section 88, but does not include any demand relating to erroneous refund and where a show-cause notice is issued to the declarant in respect of seizure of goods and demand of duties, the tax arrear shall not include the duties on such seized goods where such duties on the seized goods have not been quantified.- Explanation.-Where a declarant has already paid either voluntarily or under protest, any amount of duties, cesses, interest, fine or penalty specified in this sub-clause, on or before the date of making a declaration by him under Section 88 which indudes any deposit made by him pending any appeal or in pursuance of a Court order in relation to such duties, cesses, interest, fine or penalty, such payment shall not be deemed to be the amount unpaid for the purposes of determining ta