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President’s Message |
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Tax litigation is expected to assume a totally different complexion with the establishment of the National Tax Tribunal which is to be constituted by the Central Government under the National Tax Tribunal Act, 2005. Under sec. 3 of the Act, the National Tax Tribunal is to exercise the jurisdictional powers and authorities conferred on it under the Act. The National Tax Tribunal is set to replace the High Court in its Tax Appellate jurisdiction. An appeal lies to the N.T.T. from the Appellate Tribunal on a case involving a substantial question of law. The Tribunal will consist of a Chairman who shall be a person who has been a Judge of the Supreme Court or the Chief Justice of a High Court, while a Member shall be a person who is eligible to be a Judge of the High Court or has been a Member of the Income Tax Appellate Tribunal or Customs, Excise and Service Tax Appellate Tribunal for at least five years. The originally prescribed period of seven years was reduced by Amendment Ordinance 2007 to five years. While the terms and conditions of Office of the Chair Person would be the same as applicable to a sitting Judge of the Supreme Court (vacation excluded), those of a Member shall be the same as applicable to the Secretary to the Government of India. The Chair Person and the Members are to be appointed by the Central Government on the recommendation of a Selection Committee consisting of the Chief Justice of India or a Judge of the Supreme Court and the Secretary in the Ministry of Law & Justice and the Ministry of Finance. The term of office of the Chair Person and every member shall be a period of five years subject to the age of 68 years in the case of a Chair Person and 65 years in the case of a Member. Legal Practitioners and Chartered Accountants is entitled to appear before the N.T.T. after the amendment of sec. 13 by Amendment Ordinance. The constitution of the National Tax Tribunal has raised various issues of considerable importance to the profession and tax paying public. The validity of the National Tax Tribunal Act is under challenge before the Supreme Court and, in the course of the preliminary hearing, the Supreme Court appears to have taken note of the various issues raised in the challenge. The Union of India has stated that the Government would make amendments on certain issues. Accordingly, the Supreme Court felt that it would be appropriate to examine the matter after the amendments are made. While this was so, the ordinance amending the Act has failed to address the real issues in dispute. The Apex Court has observed in unmistakable terms that a Tribunal which substitutes the High Court as an alternative institutional mechanism for judicial review must be no less efficacious than the High Court and should inspire confidence and public esteem that it is a competent and expert mechanism with judicial approach and objectivity. When the Supreme Court has recognized Specialized Tribunals as substitute for High Court, it follows that such Tribunals should have the status of High Courts. The provisions of the National Tax Tribunal Act do not subserve this purpose. The provisions relating to appointment of Chair Person and Members and the status of members as set out in sec. 10(2) indicate that the National Tax Tribunal is not conceived of as a substitute for the High Court, but only as a subordinate. After the amendment of the Income-tax Act in 1998 restricting the appeals to High Court only to substantial questions of Law, the role of any substitute for such jurisdiction should have a specialized legal training and the status of a High Court. It was expected that the amendments proposed to be made by the Government would meet these requirements; but, however, this expectation has been belied since the Ordinance touches only the fringes and not the substantive provisions which go against the very concept of an Expert Tribunal as an alternative mechanism for judicial review, as conceived of by the Supreme Court. Sec. 8 of the Act which fixes a term of five years for a Member would be a dissuading factor for promising young professionals who opt for a career in the National Tax Tribunal. An institution manned by persons who have short tenure of five years and less would not have the advantage of continuity and would attract only persons who are on the verge of retirement. This would lead to the public perception that the National Tax Tribunal is a haven for retired and retiring persons and would fail to inspire confidence in the tax paying public. If the N.T.T. is to form an effective forum for judicial review, it should be constituted on a par with the High Court and should also be treated as such in all matters. V. Ramachandran |