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| Inaugurating a conference of directors-general and commissioners of income tax, central excise and customs, on July 15, Finance Minister Jaswant Singh announced setting up of a national tax tribunal (NTT) for hearing appeals against the decisions of the Income Tax Appellate Tribunal and the Customs, Central Excise and Service Taxes Appellate Tribunal. |
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| NTT setup has since been finalised at a fast speed. The 25 Bench tribunal comprising chairperson and 49 members is likely to be chaired by a former chief justice of a high court or a former Supreme Court judge. The incumbents will hold office for 5 years. The chairman is expected to retire after 65 years. |
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| Fifteen Benches are expected to hear appeals against direct taxes, 10 against indirect taxes. Appeals against NTT orders will lie with the Supreme Court. |
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| The tribunal is being set up under Article 323B of the Constitution. NTT will not have writ jurisdiction. It will continue with the high courts. |
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| Like decisions relating to tax legislations, the decisions to constitute NTT has also been taken hurriedly without weighing the pros and cons of the change that relates to the functioning of the judicial system. |
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| Another substantially large establishment is being created without adequate discussion about its necessity, constitution and functioning. |
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| Such a discussion was all the more necessary because in the late eighties, detailed examination about the constitution of such tribunals was carried out in the Central Board of Direct Taxes (CBDT) and parleys were held between ministries concerned. |
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| Opinions were also expressed by taxpayers, trade, industries and commerce bodies. Ultimately, the proposal was shelved and no one talked about it until in the conference, where Singh revived the NTT idea. |
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| Within two months, the entire scheme has been worked out. It is expected to be implemented soon without seeking the views of taxpayers, tax advisers and others likely to be affected by the change. |
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| No estimate seems to have been made regarding the financial burden, which is likely to be cast on the exchequer by the proposed new structure. |
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| Also no study has been done whether the benefits expected will be commensurate with the extra burden that the financial system, already cracking under the pressure of deficit, financing, will be made to bear. The hurried approach is unexplainable. |
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| Two benefits that have been proclaimed for the new setup are speedy disposal of tax cases and uniformity in decision-making. |
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| The first virtue is likely to be illusory than real. Initially, there will be some speed but after some time with carried over workload and continuous flow of new appeals, the scheme is likely to face the same bottlenecks as the Central Administrative Tribunal (CAT) and its Benches established under Article 323A of the Constitution are facing. At least a study of the CAT's functioning could have been been done before launching the new scheme. |
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The Malimath Committee, set up to deal with issues concerning tribunals under Articles 323A and 323B of the Constitution, said:
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