Answer:

♤ Article 323-B of the constitution empowers the state and central legislature to provide for tribunals to adjudicate disputes pertaining to certain matters, including those relating to tax, rent and foreign exchange.

♤ The National Tax Tribunal Act, 2005 envisaged setting up a National Tax Tribunal (NTT) to take up tax-related matters of high courts in order to expedite the decisions on tax disputes. The tribunal was to hear appeals against orders of the ITAT and CESTAT.

♤ The Supreme Court recently struck down the act, on the grounds that it encroached upon the power of the judiciary and the principle of separation of powers.

♤ The SC held the law as unconstitutional with respect to the qualification of the chairman and members, their terms of office, jurisdiction of the tribunal and the eligibility to appear before the tribunal. Company secretaries could not be appointed as tribunal members.

♤ The court said that the tribunal didn't have the salient characteristics of courts, which it sought to replace. It ruled that tribunals couldn't decide "questions of law", adding these could only be decided by constitutional courts.

♤ Some other issues related to the working of Tribunals are:

 parliament’s power to abrogate or divest the core judicial appellate functions of

courts

 administrative and financial control of the executive

 the tribunals were exempted from review by high court

 the executive, especially retired bureaucrats, has predominant positions in all tribunals and judicial members are not given a sufficient role

♤ However the SC’s judgment in the present case will have repercussion on speedier disposal of appeals before high courts. An estimated Rs 4 lakh crore of tax revenue is locked up in litigation in various stages from commissioner appeal to courts.

♤ Tribunals in India are setup for administrative convenience. The need for Tribunals can be justified by:

 Setting up of Tribunals helps in reducing the pendency of winding-up cases, shortening the winding-up process, and avoiding multiplicity and levels of litigation before courts.

 The role of non-judicial members is justified on the basis that the tribunals needed experts in various fields in view of the technical and complex subjects that came up before these bodies.

♤ In the Minerva Mills case, the Supreme Court said “effective alternative institutional mechanisms or arrangements for judicial review” could be made by Parliament. Even in the present NTT case, the court has not invalidated the Article 323B of the constitution. It said though Parliament could create tribunals, these should have the trappings of a court.

♤ The tribunal should be a real substitute for a high court. The alternative arrangement has to be effective and efficient, as well as capable of upholding constitutional limitations. The Tribunals should be tasked with deciding factual issues. The matters related to question of law should be dealt exclusively by High courts and Supreme Courts.