- (1.) In all these petitions, the constitutional validity of the National Tax Tribunal Act, 2005 ('Act' for short) is challenged. In TC No. 150/2006, additionally there is a challenge to Section 46 of the Constitution (Forty- second Amendment) Act, 1976 and Article 323B of Constitution of India. It is contended that Section 46 of the Constitution (Forty-second Amendment) Act, is ultra vires the basic structure of the Constitution as it enables proliferation of Tribunal system and makes serious inroads into the independence of the judiciary by providing a parallel system of administration of justice, in which the executive has retained extensive control over matters such as appointment, jurisdiction, procedure etc. It is contended that Article 323B violates the basic structure of the Constitution as it completely takes away the jurisdiction of the High Courts and vests them in the National Tax Tribunal, including trial of offences and adjudication of pure questions of law, which have always been in the exclusive domain of the judiciary.
(2.) When these matters came up on 9.1.2007 before a three Judge Bench, the challenge to various sections of the Act was noticed. 2.1) The first challenge was to Section 13 which permitted "any person" duly authorized to appear before the National Tax Tribunal. Union of India submitted that the appropriate amendment will be made in the Act to ensure that only lawyers, Chartered Accountants and parties in person will be permitted to appear before the National Tax Tribunal. 2.2) The second challenge was to Section 5(5) of the Act which provided that the Central Government may, in consultation with the Chairperson, transfers a Member from headquarters of one Bench in one State to the headquarters of another Bench in another State or to the headquarters of any other Bench within a State. Union of India submitted that having regard to the nature of the functions to be performed by the Tribunal and the constitutional scheme of separation of powers and independence of judiciary, the expression "consultation with the Chairperson" occurring in Section 5(5) of the Act should be read and construed as "concurrence of the Chairperson". 2.3) The third challenge was to Section 7 which provided for a Selection Committee comprising of the Chief Justice of India or a Judge of the Supreme Court nominated by him, (b) Secretary in the Ministry of Law & Justice, and (c) Secretary in the Ministry of Finance. It was contended by the petitioners that two of the Members who are Secretaries to the Government forming the majority may override the opinion of the Chief Justice or his nominee which was improper. It was stated on behalf of the Union of India that there was no question of two Secretaries overriding the opinion of the Chief Justice of India or his nominee since primacy of the Chairperson was inbuilt in the system and this aspect will be duly clarified. 2.4) In regard to certain other defects in the Act, pointed out by the petitioners, it was submitted that the Union Government will examine them and wherever necessary suitable amendments will be made. In view of these submissions, on 9.1.2007, this Court made an order reserving liberty to the Union Government to mention the matter for listing after the appropriate amendments were made in the Act.
(3.) On 21.1.2009, when arguments in CA No. 3067 of 2004 and CA No. 3717/2005, which related to the challenge to Parts 1B and 1C of Companies Act, 1956 were in progress before the Constitution Bench, it was submitted that these matters involved a similar issue and they could be tagged and disposed of in terms of the decision in those appeals. Therefore the Constitution Bench directed these cases to be listed with those appeals, even though there is no order of reference in these matters.;