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Report No. 162

Questionnaire on Income-Tax and Cegat Tribunals

1. Do you agree with the suggestion that existing justice delivery, system through CEGAT/ITAT has inspired faith and confidence in litigating public that these are competent and expert mechanism with judicial approach and objectivity? If not, please elaborate causes/reasons.

2. Whether in your opinion, the members of the Tribunal enjoy the repute of independence from executive pressures or influence, fearlessness of other power centres, economic or, political, and freedom from prejudices acquired and nourished by the class to which they belong?

3. Composition:

(a) Do you think that the present composition of the Tribunals whereunder one Member is a Judicial Member and the other is a non-judicial one, is sound in principle and satisfactory to secure the ends of justice? Please give reasons for your view and suggestions, if any.

(b) Would you agree to the suggestion that the Tribunals in question should consist of exclusively persons with judicial experience?

(c) Whether the existing technical members/accountant members under the CEGAT or ITAT respectively be only assessors or continue to be Members of the Tribunals?

(d) In regard to judicial members, what, in your opinion, should be the minimum qualifications or experience requisite for appointment to the Tribunals?

(e) Rule 10 of the CEGAT Members (Recruitment and Conditions of Service) Rule, 1987 prescribes qualification for appointment as Member and President, it states:

"serving judge of a High Court.....shall hold office as President till he attains the age of 62 years-

The Rule does not provide any incentive to a serving High Court Judge to join the CEGAT in view of constitutional provision under Article 217 that he holds office until he attains the age of 62 years. This runs counter to common inclination why a sitting judge would opt to serve CEGAT as its President, if he is to retire at the same age without any benefit. In your opinion, what suitable changes should be made to make the terms and conditions of service more attractive so that sitting High Court Judges may opt for appointment as the President of the CEGAT and even for post of Member of the CEGAT to raise its standard.

(i) Would you suggest, in the light of the above, that, as in the case of the Central Administrative Tribunal (CAT), the retiring age of the President and Vice-President should be raised to 65 years while in the case of other members it may continue at 62 years?

(ii) As a corollary to the above, would you suggest, that, the post of President and/or Vice-President of these Tribunals should be restricted only to a sitting/or retired Judge of a High Court or would you make it available for promotion to judicial and/or technical or accountant members of the Tribunals as well? Would you restrict the eligibility of Members only to the posts of Vice-President and that too only to a proportion of such posts?

(f) Whether the existing section 129(2) of the Customs Act, 1962 providing for qualifications of a judicial member that:

"A judicial member shall be a person who has for at least ten years held a judicial office in the territory of India or who has been a member of the Central Legal Service and has held a post in Grade I of that service or any equivalent or higher post for at least three years, or who has been an advocate for at least ten years."

and similarly section 252(2) of the Income-tax Act, 1961, need amendment in the context of the qualifications of the President of the CEGAT quoted above.

Do you agree that merely raising the status of the President of the Tribunals is not sufficient but the status of the members of the Tribunals as well should baraised correspondingly?

Considering that two of the three qualifications referred to earlier are also qualifications which make a person eligible to be considered for appointment as a High Court Judge, in what way do you consider it possible to raise the status of the member's consistent with the status to be prescribed for the President and/ or Vice-President."

4. Whether a litigant is able to get his case decided expeditiously? If not, how much period is normally consumed for final disposal before the Tribunals?

5. Administrative Authority:

Do you agree that there should be an authority to have administrative control with power to issue administrative instructions in the functioning of the Tribunals.

If so, which authority, you would prefer: The Supreme Court of India/Ministry of Law /Ministry of Finance of Government of India.

Please indicate reasons for your preference.

6. Which authority should hold selection of Chairman, Vice-Chairman and Members of the Tribunals in question?

(a) The Chief Justice of India, or

(b) a Committee appointed by the Chief Justice of India, or

(c) the Central Government.

6A. Do you agree that whichever authority for selection is constituted, it should be in charge of selection of all members - both judicial and technical members - of the Tribunals?

6B. Should such Selection Board be also constituted as Promotion Committee to decide, from time to time, on the promotion of members of the Tribunal as Vice-President/President, if eligible under the rules?

6C. Would you suggest any other powers to the Selection Board in matters of administration of the Tribunals?

7. Appeals: General

Should there be a provision for second appeal against the order of Tribunal?

(i) If so, should the second appeal be on facts as well as on law or only on questions of law. Please indicate your reasons.

(ii) If you suggest an appeal against the order of the Tribunal should lie, what in your opinion, should be the forum for appeals against the judgments of the Tribunals in question? Would you favour an appeal to the-

(a) Supreme Court,

(b) High Court,

(c) any other National Tax Court/Appellate Tribunal to be newly constituted?

8. Do you agree with the view that procedure for reference by the Tribunal to the High Court (under section 256, Income-tax Act, 1961; section 130 of the Customs Act, 1962) should be abrogated, instead appeal should lie to the High Court on substantial questions of law against the order of the Tribunal.

8A. Another suggestions is that a partial abrogation of the reference procedure - by eliminating the need to apply to the Tribunal for reference to the High Court in the first instance and, on failure, to apply to the High Court for a mandamus -and substituting it by a simple procedure of seeking a direction from the High Court for a reference only on substantial questions of law arising out of the Tribunal's order would-

(i) eliminate a step in the present law which only causes delay and is perhaps unnecessary; and

(ii) make the system almost as good and effective as a direct appeal to the High Court from the Tribunals order.

What are your views on these suggestions?

9. In case you favour appeal to the High Court in place of reference, do you agree with the suggestion that the High Courts should be required to constitute permanent Benches for hearing appeals from the Tribunals in question? In case you favour the continuance of the present system of reference, do you consider it useful to constitute permanent Benches for disposing of such reference?

10. (i) Do you agree that the jurisdiction of the High Court be abrogated under Articles 226/227 of the Constitution of India against the decisions of the authorities under the Income-tax Act, 1961, or under the CEGAT by constituting an equally efficacious, effective forum like National Tax Court or Appellate Tribunals? If so, what should be its composition?

(ia) Will not the provision of such a Court or tribunal be really the repetition of a provision for tax assesses of a third tier of appeal while litigants in other branches of law have, in general, only two tiers of appeal available to them?

(ii) In case you favour the creation of a separate Appellate Tribunal like National Tax Court or Tribunal against judgments of the Tribunals in question, should the tribunal hold its sittings through Benches functioning in, say, four regions (North, South, East and West)?

(iii) How far do you think such regional Benches will be able

(a) to cope up with the workload involved which at present is distributed among several High Courts, and

(b) to fulfil the objective of carrying justice nearer to the doorstep of the assessses?

(iv) Do you agree that the proposed National Court or Appellate Tribunal should also be vested with jurisdiction to deal with constitutionality of tax legislation. Could there be any objection to this course if the Tribunal proposed either consists - only of, judicial members or, if it is provided that only Benches of the Tribunal consisting of such members will deal with such questions?

(v) There is a view that unless the original jurisdiction of determining the constitutionality of tax legislation is conferred upon the proposed forum of National Tax Court or other Appellate Tribunal litigants will be able to resort to High Courts under Article 226 of the Constitution of India and frustrate the objective of expeditious disposal of matters? How to meet the situation, indicate, your reasons.

11. Should the National Tax Court or Appellate Tribunal be constituted exclusively by judges, under the administrative control of Supreme Court?

12. Under the present system, provision for appeals with special leave to the Supreme Court under Article 136 of the Constitution against the Judgments of the Tribunals in question, is increasing the workload of the Supreme Court and is causing hardship to litigants who have to travel to Delhi from far off places. Would you favour any amendment in this regard, and if so, in what direction?

13. Have you any changes to suggest regarding the jurisdiction of the Tribunals in question? If so, kindly give your suggestions in detail with reasons.

14. Do you agree with the view that the multiplicity of Tribunals to deal with various matters is destructive of the uniformity of law in India? If so, please make any concrete suggestions that you may like to be considered in this regard.

15. There is a proposal to abolish the ITAT and the CEGAT as constituted at present and to substitute these tribunals by a National Tribunal having a number of Benches in the Country to deal with the appeals arising out of the Income-tax Act and the Customs Act. Do you agree to this proposal?

15a. Do you agree that the constitution, of a single National Tax Court or National Tribunal (in place of the existing tribunals) will effectively solve the vexed problem of a conflict of judicial opinion and promote certainty in the law or would you suggest that the existence of conflicts is necessary and healthy to promote a full discussion of all points of view open on any question?

16. The proposed National Tribunal is to be constituted under Article 323B of the Constitution excluding the jurisdiction of the High Court under Articles 226 and 227 of the Constitution as well as abrogating the reference procedure. Do you agree to this proposal?

17. If the High Court jurisdiction is taken away, will it not increase the workload in the Supreme Court under Article 136 of the Constitution as the aggrieved party will approach the Supreme Court under that provision against the order of the proposed tribunal.

18. The proposed National Tribunal, in the absence of a Constitutional amendment, cannot have any jurisdiction to determine the question of constitutionality of laws and the jurisdiction of the High Court under Article 226 would be likely to be invoked to challenge the constitutional validity of the Income-tax Act and the Customs, Act and the rules framed thereunder. Will this not frustrate the object and purpose of the constitution of the National Tribunal and cause delay?

19. Have you any other suggestions to make in this matter.

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

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