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Report No. 162

7.3. The recommendations of the Commission in so far as the Central Excise and Gold (Control) Appellate Tribunal are as follows:-

(a) No person shall be appointed as the President of the Tribunal unless he is or has been the Chief Justice of a High Court. He must be a person reputed for his efficiency, integrity and hard work. Immediately upon his appointment he must be provided a residence in New Delhi consistent with his status besides other perquisites and amenities to which he was entitled as the Chief Justice of the High Court. The selection of the President should be made by a committee consisting of the Hon'ble Chief Justice of India and the two senior most Judges of the Supreme Court.

As a matter of convention, it must be ensured that there is no time lag between the retirement of a President and the appointment of his successor. Only where a suitable sitting or retired Chief Justice is not available, should a senior sitting or retired, High Court Judge with the requisite qualities be considered. An effective and efficient President would go a long way in improving the work-culture of the Tribunal-a fact borne out by experience. [Para. 5.1.A, supra]

(b) Section 129 of the Customs Act calls for an amendment. The appointment of the President of the Tribunal should be a direct appointment in the manner stated above, whereas section 129, as it stands now, contemplates appointing one of the Members of the Tribunal as the President thereof. While the appointment of the Vice-President can be done from among the Members, the President of the Tribunal should be chosen directly from among the retired Chief Justices or retiring or retired senior Judges of the High Court.

[Para. 5.1B, supra]

(c) In the matter of appointment of Judicial Members of the Tribunal, an attempt should be made, as far as possible, to recruit Members of the Bar between the age of 45 and 50. They must be provided with official residence as soon as possible upon their appointment/posting to a particular city and they should also be entitled to all the perquisites and amenities admissible to their office.

Not making a suitable residence available upon their posting to a particular place and driving them to seek private accommodation at exhorbitant cost acts as a disincentive to those considering joining this service, It is equally necessary to provide that these Judicial Members should be considered for appointment as Judges of the High Courts (of the State from which they hail) in the quota normally reserved for members of the subordinate judiciary and if for any reason this course is not found feasible or practicable, they may be considered under sub-clause (b) of clause 2 of Article 217 read with extension (aa) and/or (b) appended to the said clause.

If this assurance is held out, many members of the Bar may be attracted to this office which may incidentally have the added advantage of making available persons of competence, who have acquired expertise in Central Excise and Customs matters to High Courts.

The prompt recruitment and posting of Judicial and Administrative Members is again a necessity, which though an obvious requirement, has not really been honoured in practice. In this connection, the practice of taking District Judges on deputation to work as Judicial Members of the Tribunal should be encouraged. They should retain a lien in their parent service so that their chances of promotion or of appointment to the High Court are not jeopardised.

[Para. 5.1C, supra]

(d) In matters where a reference lies to the High Court, under section 35G of the Central Excise Act and section 130 of the Customs Act, the requirement of applying to the Tribunal for making a reference as provided by sub-section (1) of section 35G and sub-section (1) of section 130 respectively of the said enactments may be dispensed with. Section 35G and section 130 may be suitably amended providing that any person aggrieved with the decision of the Tribunal may apply to the High Court for directing the Tribunal to refer the questions of law arising from the decision of the Tribunal.

The time limitation for making such an application can be retained at six months as is now provided by sub-section (3) of the aforesaid sections. It must however be provided that a person so applying to the High Court should clearly state the questions of law which he seeks to raise and should also specify the paragraphs in the decision/judgment of the Tribunal relevant to the questions sought to be raised as such a provision is necessary in view of the fact that the judgment of the Tribunal may deal with several other questions of law and fact.

[Para. 5.1D, supra]

(e) In every High Court there should at least be one Bench regularly hearing matters arising under the Income-tax Act, Central Excise and Salt Act and the Customs Act. The matters arising under the latter two enactments should, as far as possible, be given precedence in the matter of hearing.

[Para. 5.1E, supra]

(f) Every Bench of the Tribunal should be headed by a Vice-President. For this purpose, there must be as many Vice-Presidents as there are Benches of the Tribunal. At any rate, the important centres like Mumbai, Ahmedabad, Chennai and Calcutta should necessarily have a Vice President each.

[Para. 5.1F, supra]

(g) The number of Benches should be commensurate with the work in the Tribunal. Since every Member/Bench of the Tribunal is expected to dispose of a particular number of cases every year, the number of Benches should be determined on the above basis and provided for. On the present pendency, there ought to be at least 20 to 22 Benches, in all. As stated hereinabove, the filing in the Tribunal is going up with every passing year-and not decreasing.

[Para. 5.1G, supra]

(h) Special care be taken while appointing the Senior Departmental Representatives (SDRs) and Junior Departmental Representatives (JDRs). Their role is no less important. Persons of competence and integrity alone should be designated as such.

[Para. 5.1H, supra]

(i) The recommendations made regarding Central Administrative Tribunal under paragraphs 4.9, 4.10, 4.11 and 4.13, supra, shall also be extended to CEGAT also.

[Para. 5.1-I, supra]

7.4. So far as ITAT is concerned, the Commission is of the opinion that no change is called for in the working of this Tribunal since it has been working satisfactorily for the last several decades. There is however one measure of improvement which we wish to propose, namely, the dispensing with of the requirement of applying to the Tribunal in the first instance for making a reference to the High Court as provided by sub-section (1) of section 256 of the Income-tax Act, 1961.

The procedure can be simplified and a lot of time can be saved by providing that a person aggrieved with the decision/judgment of the Tribunal may apply to the High Court straightway requesting the High Court to direct the Tribunal to state the questions of law which according to him (the applicant) arise from the decision of the Tribunal. The present practice of clearly stating the questions of law which a person wants to raise must be continued.

The applicant must be further directed to specify the paragraphs in the decision of the Tribunal which are relevant to each of the questions of law raised by him, separately, it should also be provided that such applications should be listed before the appropriate Bench in the High Court as soon as they are ready for hearing. This is being emphasised for the reason that in certain High Courts, applications under section 256(2) are kept pending for years together before they come up for hearing.

7.4.1. It has been observed that the same question of law is involved in the case of many assessees every year repeatedly in the taxation matters, till the question of law is finally decided by the higher courts. This results in a geometric increase in the number of cases on similar questions and also leads to uncertainty in respect of the payment of taxes.

In the event of a decision holding against him on those recurring questions of law, the cumulative interest on taxes payable under various heads as determined by the court to be payable by the assessee, sometimes reach very high figures, which may give a jolt to the industry and even lead to the closure of the industry in some cases. Therefore, justice demands that the recurring disputes on account of common questions of law should be finally settled at the earliest.

The solution to this problem may lie only if adequate attention of ITAT is drawn to such common issues. Therefore, the ITAT may, through the assistance of research officers specified under paragraphs 4.9 and 4.10, supra, invite applications regarding such common issues/recurring issues from the assessee/ appellants or from the Respondent/Revenue department by advertising from time to time in newspapers and on notice boards.

The research officers may also delve into court files to find out such common questions of law and put them up before the ITAT. It may decide such issues on a priority basis. In their judgment, the Tribunal may refer to the fact of taking up of the common issues on an expeditious basis, so that the High Court may also take it up on a priority basis. Similarly, the High Court may mention in its judgment about the taking up of the matter on a priority basis, so that in case the matter goes to Supreme Court, it may also decide the case expeditiously to settle the matter.

[Para. 6.2, supra]

7.4.2. The recommendations made regarding central Administrative Tribunal under paragraphs 4.9, 4.10, 4.11 and 4.13, supra, shall also be extended to ITAT also.

[Para. 6.3, supra]

We recommend accordingly.

Mr. Justice B.P. Jeevan Reddy (Retd.), Chairman.

Ms. Justice Leila Seth (Retd.), Member.

Dr. N.M. Ghatate, Member.

R.L. Meena, Member-secretary.

Review of functioning of Central Administrative Tribunal - Customs, Excise and Gold (Control) Appellate Tribunal and Income-Tax Appellate Tribunal Back

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