Datar, Rohatgi in challenge to National Tax Tribunal Act; Hearing progressing before Constitution Bench

The Supreme Court is hearing a petition filed by the Madras Bar Association (Petitioner) challenging the constitutional validity of National Tax Tribunal Act, 2005 (NTT Act) and Article 323B of the Constitution. The case is being heard by a Constitution Bench presided by Chief Justice RM Lodha and comprising Justices JS Khehar, Jasti Chelameswar, AK Sikri and Rohinton Fali Nariman..Senior Advocate Arvind Datar is appearing for the Petitioner while Attorney General Mukul Rohatgi is representing the Central government..The Petitioner’s contention is that Article 323B violates the basic structure of the Constitution as it facilitates the legislature to take away the jurisdiction of the High Courts and vest them in tribunals, including the power to adjudicate pure questions of law, which has always been in the exclusive domain of the judiciary..As per the petition,.“Tribunals must be restricted to fact finding level and only in specialized areas between the government and the assesses. The fact finding by the Tribunals is part of the assessment process. Once the assessment is completed, and there is a dispute on question of law, the same must be confined only to the High Courts.”.The Petitioner has also submitted that if Tribunals are created, they must be part of and under the control of the Indian Judiciary and “the process of selection of appointees to the Tribunal must be done as in the case of the High Court judges”. Regarding the NTT Act, the Petitioner has submitted that the effective power of appointment of members of the Tribunal vests with the Executive “which will be destructive of the impartiality of such a Tribunal…and the Constitutional requirement of an independent judiciary”..Yesterday, Datar argued that Article 323B has the dangerous objective of creating a parallel judiciary outside regular Constitutional courts. He submitted that the NTT had virtually replaced the High Courts and decided only on “questions of law” with its members being under the effective control of the executive. He, therefore, contended that if tribunals like the NTT are permitted to decide questions of law, they should be manned by High Court judges. .Attorney General Mukul Rohatgi, on the other hand, submitted that tribunals have all the trappings of the courts including independence from the executive. While admitting that the NTT has replaced High Courts even with regard to deciding substantial questions of law, Rohatgi proceeded to ask, .“What is so fancy about the term ‘substantial question of law’? If tribunalisation is not accepted, everything will remain with the courts. If it is accepted, then just as the lower court goes away, likewise an appeal from a lower court to the High Court also goes away. This is restructuring of the system for speedy dispensation of justice. Time had come to unclog the High Courts for which tribunals were created. Tax matters have various intricacies which require specialists. How many High Court or Supreme Court lawyers can even understand tax matters?”.Advocate Lakshmikumaran, Partner at tax law firm Lakshmikumaran & Sridharan, was also present in the court during the hearing..The hearing will resume on July 22..Another petition filed by the Madras Bar Association challenging the Constitutionality of National Company Law Tribunal and Appellate Tribunal is also pending in the Supreme Court.

Datar, Rohatgi in challenge to National Tax Tribunal Act; Hearing progressing before Constitution Bench

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