The main objective of the scheme is to encourage payment of tax and avoid litigation. The Samadhan scheme provides immunity from interest, penalty and prosecution. However tax experts are of the view that this scheme will attract assessees undergoing litigation as immunity under interest, penalty or prosecution will be provided to these assessee.

This in other words mean that an assessee undergoing litigation will be currently able to pay tax at the prevailing market rate and will also be exempt from paying interest for the period undergoing litigation.

According to tax experts, this is an attractive scheme for those assessee's who have gone in for an appeal and do not expect any positive development. "Only such assessee's will goin for samadhan scheme," said a noted tax expert, Jayesh Thakore. According to him, this will reduce the administrative cost of the income tax department. "More people are likely to go for this scheme as litigation is not very advisable," he said.

According to tax experts, though the main objected of VDIS was to tap unaccounted money, Samadhan scheme of the BJP coalition government will tap assessee's money locked in litigation with no hope of getting it back.

A public interest litigation (PIL) was filed by the All India tax practitioner association last year on the grounds that VDIS violated articles 226 and 14 of the Indian constitution which guarantee equality before the law. The PIL questions the validity of sections 62 to 78 of the Finance Act, 1997, which dealt with the VDIS-97.

The move comes at a time when the finance minister has embarked on a massive country-wide drive to promote the scheme. According to the association, such schemes treated honest taxpayers unfairly as compared to taxevaders and therefore should be done away with. It also urged the court to declare it null and void.