SC quashes age, tenure norms for tribunals; calls for new oversight body

The Supreme Court scrapped the 50-year age bar and four-year tenure for tribunal members under the 2021 law, restored earlier rules, and directed the Centre to set up a National Tribunals Commission

The Supreme Court on Wednesday struck down the minimum age bar of 50 years and the truncated four-year tenure for tribunal members introduced under the Tribunal Reforms Act, 2021, holding that the Centre had revived in only a slightly altered form the very provisions earlier declared unconstitutional.

 

A bench of Chief Justice B R Gavai and Justice Vinod Chandran said the 2021 law violated the principles of judicial independence and separation of powers by reintroducing measures already struck down in the Madras Bar Association line of cases.

 

In a separate opinion, Justice Chandran criticised the provisions strongly, remarking: “The Tribunal Reforms Act, 2021 is a replica of the struck down Ordinance; old wine in a new bottle, the wine whets not the judicial palette, but the bottle merely dazzle.”

   

The top court noted that instead of addressing the constitutional defects, the government had reproduced core elements of the earlier framework, including the four-year tenure, upper age limits, eligibility restrictions, and an appointment mechanism with excessive executive control.

 

The apex court ordered that the service conditions of all members of the Income Tax Appellate Tribunal (ITAT) appointed on September 11, 2021 shall now be governed by the old Act and old Rules. It also protected the appointments of members and chairpersons whose selection or recommendation by the search-cum-selection committee was completed prior to the commencement of the 2021 Act but whose formal appointment notifications were issued later.

 

“Such appointments will continue to be governed by the parent statutes and by the conditions of service as laid down in MBA (IV) and MBA (V), rather than by the truncated tenure and altered service conditions introduced by the Tribunal Reforms Act, 2021,” the top court said.

 

The bench further directed the Union government to constitute a National Tribunals Commission within four months, stating that an independent oversight body was essential for ensuring uniformity, transparency, and independence from executive influence in tribunal administration. Until the Commission is established, a dedicated Tribunals Wing in the Ministry of Finance will manage administrative matters relating to tribunals, as per the order.

 

Experts said the ruling reaffirms the constitutional requirement of judicial independence in the tribunal system. Advocate Prakash Jotwani said the ruling provides balanced clarity across batches of tribunal appointees. “In my view, this is a win-win situation for all. The 2021 batch gets job up to the age of 62 years. The 2024 batch will get a period of five years in place of four years or 67 years, whichever is earlier. The VPs (vice presidents) appointed by the new Act will also now get five years or till they reach 67 years,” he said.

 

Manish Garg, lead-transfer pricing and litigation, AKM Global, a tax and consulting firm, stated: “By striking down the key provisions of Tribunal Reforms Act, 2021, the Supreme Court has sent a strong message that judicial independence is non-negotiable, and any effort to modify the legislation that impacts the independence of tribunal members is not constitutionally valid… Having a fixed and long tenure of tribunal members is very crucial for faster disposal of cases.”

 

However, according to Jotwani, it's a division bench judgement declining reference to a larger bench on technical grounds, but its authority is fragile and vulnerable as it may get overruled by a larger bench.