| No estimate seems to have been made regarding the financial burden that is likely to be cast on the exchequer by the proposed new structure
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| Inaugurating a conference of directors-general and commissioners of income tax, central excise and customs, on July 15, Finance Minister Jaswant Singh announced setting up of a national tax tribunal (NTT) for hearing appeals against the decisions of the Income Tax Appellate Tribunal and the Customs, Central Excise and Service Taxes Appellate Tribunal.
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| NTT setup has since been finalised at a fast speed. The 25 Bench tribunal comprising chairperson and 49 members is likely to be chaired by a former chief justice of a high court or a former Supreme Court judge. The incumbents will hold office for 5 years. The chairman is expected to retire after 65 years.
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| Fifteen Benches are expected to hear appeals against direct taxes, 10 against indirect taxes. Appeals against NTT orders will lie with the Supreme Court.
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| The tribunal is being set up under Article 323B of the Constitution. NTT will not have writ jurisdiction. It will continue with the high courts.
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| Like decisions relating to tax legislations, the decisions to constitute NTT has also been taken hurriedly without weighing the pros and cons of the change that relates to the functioning of the judicial system.
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| Another substantially large establishment is being created without adequate discussion about its necessity, constitution and functioning.
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| Such a discussion was all the more necessary because in the late eighties, detailed examination about the constitution of such tribunals was carried out in the Central Board of Direct Taxes (CBDT) and parleys were held between ministries concerned.
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| Opinions were also expressed by taxpayers, trade, industries and commerce bodies. Ultimately, the proposal was shelved and no one talked about it until in the conference, where Singh revived the NTT idea.
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| Within two months, the entire scheme has been worked out. It is expected to be implemented soon without seeking the views of taxpayers, tax advisers and others likely to be affected by the change.
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| No estimate seems to have been made regarding the financial burden, which is likely to be cast on the exchequer by the proposed new structure.
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| Also no study has been done whether the benefits expected will be commensurate with the extra burden that the financial system, already cracking under the pressure of deficit, financing, will be made to bear. The hurried approach is unexplainable.
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| Two benefits that have been proclaimed for the new setup are speedy disposal of tax cases and uniformity in decision-making.
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| The first virtue is likely to be illusory than real. Initially, there will be some speed but after some time with carried over workload and continuous flow of new appeals, the scheme is likely to face the same bottlenecks as the Central Administrative Tribunal (CAT) and its Benches established under Article 323A of the Constitution are facing. At least a study of the CAT's functioning could have been been done before launching the new scheme.
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| The Malimath Committee, set up to deal with issues concerning tribunals under Articles 323A and 323B of the Constitution, said: “Several tribunals are functioning in the country. Not all of them, however, have inspired confidence in the public mind. The reasons are not far to seek. The foremost is the lack of competence, objectivity and judicial approach. The next is their constitution, the power and method of appointment of personnel thereto, the interior status and the casual method of working.
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| “The last is their actual composition: men of calibre are not willing to be appointed as presiding officers in view of the uncertainty of tenure, unsatisfactory conditions of service, executive subordination in matters of administration and political interference in judicial functioning. For these and other reasons, the quality of justice is stated to have suffered and the cause of expedition is not found to have been served by the establishment of such tribunals.”
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| The Supreme Court had an occasion to deal with complaints concerning the functioning of the Customs, Excise and Gold Control Appellate Tribunal in the RK Jain vs Union of India case, (1993) 4 SCC 119.
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| “Having had the benefit of more than 5 years’ experience of the working of these alternative institutional mechanisms, anguish was expressed over their ineffectiveness in exercising the high power of judicial review. It was recorded that their performance had left much to be desired.
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| “Thereafter, it was noted that the sole remedy provided, that of an appeal to this court under Article 136 of the Constitution, had proved to be prohibitively costly, while also being inconvenient on account of the distances involved. It was also observed that various tribunals have not performed up to the expectations is self-evident and widely acknowledged truth. It was hoped that remedial steps would be initiated to overcome the difficulties faced by the Tribunals, making them capable of dispensing effective, in expensive and satisfactory justice. It was opined that an intensive and extensive study needs to be undertaken by the Law Commission in regard to the constitution of Tribunals under various statutes with a view to ensuring their independence so that the public confidence in such tribunals may increase and the quality of their performance may improve,” the apex court said. |
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