The petition, filed by the All India Federation of Tax Practitioners, has urged a modification of the scheme as it feels it is discriminatory. The federation says the scheme favours those tax-payers who have not paid taxes, and neglects those who have paid their tax dues.

At Thursday's hearing, solicitor general of India Madan Lokur completed his submissions. According to him, parliament is competent to create a class within a class of assesses.

Arguing for the petitioner, senior advocate GS Sharma and the federation's vice-president PS Sarin have submitted that the litigants themselves constitute a class. Hence, they cannot be further divided into two classes. The federation's submissions hinge on the finance minister'sbudget speech, which said that the scheme was meant for reducing litigation.

Ironically, the scheme's final draft focused on recovery of `tax arrears'.

The bench has been hearing the matter for the last three days. During the hearing, the federation was asked to give its recommendations so that the scheme no longer remained discriminatory.

The federation has urged the court to delete Sections 87e, 87f, 87m and proviso to Section 92. Sections 87e, 87f, and 87m define the terms, disputed income, disputed tax and tax arrears, while Section 92 pertains to restriction of the appellate authority to certain cases including withdrawal of cases filed by the revenue department.

The federation's petition says samadhan does not provide for withdrawal of appeals by the income-tax department, though the revenue department itself is a major litigant.

The federation had also submitted that even the standing committee on finance has asked the government to make suitable amendments in the scheme so that thedifferentiation between the assesses is removed.