Critically evaluate the 'Vivad se Vishwas' model of dispute settlement across different sectors (tax, labour) in India. Does it strike the right balance between revenue recovery and litigant relief?

Q. Critically evaluate the 'Vivad se Vishwas' model of dispute settlement across different sectors (tax, labour) in India. Does it strike the right balance between revenue recovery and litigant relief? (15 marks, 250-350 words)

The 'Vivad se Vishwas' model is a time-bound, one-time settlement template under which the State forgoes a part of penal liability in exchange for the litigant paying the principal dues and withdrawing appeals. Pioneered in direct taxation and now extended to labour, it substantially — though not fully — balances recovery with relief.

Merits of the model - Litigation decongestion: the Direct Tax Vivad Se Vishwas Scheme, 2024, effective 1 October 2024, targets appeals pending across appellate fora [1]; EPFO's VISHWAS, 2026 covers Section 14B cases pending in CGIT, High Courts and the Supreme Court [2]. - Faster realisation: dues arrive without years of appellate cost, aiding fiscal certainty. - Graded, rule-bound concessions, not discretion — EPFO recalculates damages at 0.25%, 0.50% and 1.00% per month by default duration, for defaults prior to 14 June 2024 [2]. - Safeguards: statutory interest under Section 7Q must be paid in full and fraud cases are excluded, so relief is confined to penal add-ons [2]. - Ease of compliance: online filing via the EPFO Employer Portal using DSC/e-Sign [2]; the tax scheme uses the e-filing portal [1].

Limitations - Moral hazard: repeated amnesties may reward habitual defaulters over compliant taxpayers and employers. - Symptom, not cause: the real drivers — high-pitched assessments, understaffed tribunals, delayed adjudication — remain untouched. - Waiver of appeal rights as a precondition can pressure genuinely aggrieved litigants into settling weak demands [2]. - Coverage is narrow and cut-off bound, leaving fresh disputes to accumulate afresh.

On balance, the model tilts correctly: the principal dues and workers' provident fund interest are protected, while only penal elements are moderated. Its long-term value depends on pairing such schemes with structural reform — strengthened appellate capacity, faster adjudication and the simplified compliance architecture of the four Labour Codes made effective from 21 November 2025 [3]. Used sparingly as a clearing mechanism rather than a recurring escape route, 'Vivad se Vishwas' advances both revenue efficiency and the constitutional promise of speedy, accessible justice.

(~330 words)

Sources: 1. CBDT notifies Rules and Forms for Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, PIB — DTVSV Scheme, 2024 in force from 1 October 2024; pending appeals covered; e-filing portal forms 2. EPFO Launches "VISHWAS, 2026" for Amicable Settlement of Damages/Penalty-Related Disputes, PIB — Section 14B/Section 128 disputes, cases pending in CGIT/HC/SC, concessional damages rates, 14 June 2024 cut-off, fraud exclusion, Section 7Q interest condition, online DSC/e-Sign filing 3. Government Makes the Four Labour Codes Effective to Simplify and Streamline Labour Laws, PIB — four Labour Codes effective 21 November 2025, rationalising 29 existing labour laws