Constitutional Laws » Constitutional Validity

Constitutional Validity of NArco- Analysis test

Admin — Sat, 06 Mar 2010 11:46:40 +0000

In 1922, Robert House, an obstetrician from Texas, experiment the use of narco analysis in the interrogation of suspected criminals. The Narco analysis during past was used only by psychiatrists to find out the psychological reality. Narco analysis was rather unheard in India until recent past. Narco analysis test once again is in the limelight in the contest of Aarushi Murder case. What is Narco Analysis Test?

Narco-Analysis tries to recall repressed materials. Procedure of Narco-analysis test:

The narco analysis test is conducted by mixing 3 grams of sodium penthol or sodium amytal dissolved in 3000ml of distilled water. Personal consent of the subject is also required.

It is established that in of the total number of the individuals subjected for narco analysis are found to be innocent. Pros and Cons of Narco Analysis Test:

According to police Narco analysis is a scientific tool of investigation, it helps a lot in crime prevention and detection. The test can be misused by suggestive questioning by the investigating agencies. Constitutional Validity:

Some legal experts consider that narco analysis test during the investigation is a blatant violation of Art. Art. The test also goes against the maxim “Nomo tenetur se Ipsum Accusare” which means no man not even the accused himself can be compelled to answer any question, which may tend to prove him guilty of a crime of which he has been accused. It was held that the right extends to witness & the accused alike. The expression ‘accused of any offence’ must mean formally accused in presenti not in futuro. By administration of narco analysis test, forcible intrusion into one’s mind is being restored to, thereby nullifying the validity & legitimacy of the Right to Silence.

It is an accepted legal position that the protection of Art. The accused has no choice against the court order. The Madras High Court in Dinesh Dalmia v. State of Madras held that subjecting an accused to undergo such scientific tests would not amount to breaking his silence by force. When the human rights activist adopt third degree methods to extract information from the accused, it is high time the investigating agency took recourse to scientific methods of investigation.

The Bombay High Court in Abdul Karim Telgi case held that “certain physical tests involving minimal bodily harm” like narco analysis test and brain mapping does not violate Art. The important point is that the confession or statement made during narco analysis is not admissible as evidence in a court of law, and that is the reason why the protection against self-incrimination under Art. The issue required to be settled by a court decision because Mr. Rao refused to sign the consent form & hence the Forensic Laboratory at Gandhinagar declined to conduct a narco analysis test without a duly filled and signed consent form. The Supreme Court verdict is still awaited.

The issue of using narco analysis test as a tool of investigation in India has been widely debated. To uphold this principle narco analysis test has to be made compulsory in cases where the interest of public is involved.

Service Tax On Equipment Leasing And Hire-Purchase – Whether Un-Constitutional ?

Admin — Fri, 11 Dec 2009 19:34:53 +0000

Surender Kumar Jain

This article makes a comprehensive analysis of the decision of the High Court in Kerala Non-banking Finance Companies Welfare Association v. Union of India [2009] 20 STT 1, wherein a recent issue as to : whether charging of service tax on banking and other financial services which include equipment leasing and hire-purchase, is unconstitutional, has been considered.

1- Vide section 137 of the Finance Act, 2001 service tax is introduced on ‘Banking and other financial services’ which include ‘equipment leasing and hire-purchase’. The impugned provisions providing for service tax on ‘Equipment leasing and hire-purchase transactions’ are introduced by amending the Finance Act, 1994. The relevant definition of ‘Banking and other financial services’ is contained in clause (12) of section 65 of the Finance Act, 1994. Along with the introduction of the definition of ‘Banking and other financial services’, the charging section, namely, section 66 of the Finance Act, 1994 is also amended to cover tax on value of taxable services referred to in sub-clause (zm) of section 65(105). The question as to whether charging of service tax on ‘Banking and other financial services’, which include equipment leasing and hire-purchase, is unconstitutional, arose for consideration of the Kerala High Court in the case of Kerala Non-Banking Finance Companies Welfare Association v. Union of India [2009] 20 STT 1.

2 – The petitioner No. 1, an association of non-banking financial companies, which was covered under the definition of ‘Banking and other financial services’, and its two members, viz., petitioner Nos. 2 and 3 had filed a writ petition challenging the constitutional validity of the impugned provisions of section 137.

3 – These are discussed as under :

(a)- The Parliament has no authority to legislate on hire-purchase and leasing transactions which are subjects left for levy of sales tax by the States under entry 54 of List II of the Seventh Schedule to the Constitution of India.

(b)- After the 46th Amendment to the Constitution introducing clauses (29A)(c) and (d) to article 366, States are authorised to provide for sales tax among other things on hire-purchase and leasing transactions.

(c)- As a follow-up measure, all the States including the State of Kerala introduced provisions in the respective Sales Tax Acts authorising levy of sales tax on hire-purchase and leasing transactions.

(d)- Impugned provisions for levy of service tax on hire-purchase and leasing transactions are discriminatory and violative of articles 14 and 19(1)(g) of the Constitution.

4 – These are as follows :

(a)- Even though service tax is payable on the value of taxable service pertaining to leasing and hire-purchase transactions, the Government of India had vide Notification No. 4/2006-ST, dated March 1, 2006 granted exemption on 90 per cent representing interest income earned by the service provider.

(b)- The Supreme Court had upheld the legislative competence of the Parliament to levy service tax under the residuary entry 97 to List I of the Seventh Schedule in the decisions in Tamil Nadu Kalyana Mandapam Association v. Union of India [2006] 4 STT 308, C.K. Jidheesh v. Union of India [2005] 2 STT 242 and Gujarat Ambuja Cements Ltd. v. Union of India [2005] 1 STT 41 and thereafter, through constitutional amendments entry 92C to List I of the Seventh Schedule and article 268A are introduced expressly giving authority to the Parliament to legislate on service tax.

(c)- The validity of legislation and the grievances of the petitioners should be considered with reference to the aforesaid Notification No. 4/2006-ST, dated March 1, 2006, by which rigour of the levy was neutralized by granting exemption on 90 per cent of the charges received in the hire-purchase and leasing transactions, thereby completely excluding interest on loans from service tax.

5 - It is well-settled that the Constitution by virtue of the provisions contained in article 366(29A) authorises, levy of sales tax on hire-purchase transactions and on leasing of goods and based on the same there is State legislation authorising it.

6 - The legislation applies to all engaged in banking and other financial services and is not confined to members of the first petitioner. In fact, banking companies in the public Sector are also liable to pay service tax on financial leasing service including equipment leasing and hire-purchase . Since the petitioners had not established the parties engaged in the same business who were left out and how they were discriminated, the contention was to be rejected. Similarly provisions of service tax do not take away or create any unreasonable restriction on the fundamental rights of the members of the first petitioner including petitioner Nos. 2 and 3 to carry on business. Therefore, the allegation of violation of article 19(1)(g) also, did not merit consideration.

7 -There is no conflict between the levy of sales tax on the sale or deemed sale of vehicle under the hire-purchase agreement and the service tax payable on services rendered by the financier under the hire-purchase agreement. The provisions contained in article 366(29A) of the Constitution authorising levy of sales tax on the supply of goods under the hire-purchase agreement does not stand in the way of the Parliament levying service tax on taxable service charges received in respect of hire-purchase transactions by the financiers.

It is obvious that levy of sales tax is possible on sale of goods involved in the transactions while service tax can be levied on the service charges received in the transactions. Further, the provisions pertaining to levy of service tax on hire-purchase or lease transactions are not in any way different from the service tax authorised for the large number of transactions under the Finance Act, 1994, the constitutional validity of which is upheld by the Supreme Court. Since incidence of service tax is not on sale of goods or deemed sale of goods pertaining to leasing and hire-purchase transactions covered by clauses (c) and (d) of article 366(29A), the Parliament has authority to authorise levy of service tax on banking and other financial services including equipment leasing and hire-purchase.

Impugned provisions of levy of service tax on hire-purchase and leasing transactions are not discriminatory and violative of articles 14 and 19(1)(g).

By: taxmann

Constitutional Validity of NArco- Analysis test

Admin — Fri, 11 Dec 2009 14:45:55 +0000

Article

Constitutional Validity of Narco-Analysis Test

Prepared by: Urja. B. Dave

Nirma University of Science and Technology

Institute of Law

Ahmedabad

Constitutional validity of Narco Analysis Test

Introduction:

Development of new tool of investigation has led to the emergence of scientific tools of interrogation and criminal investigation like NARCO ANASLYSIS TEST. However, its application must be assessed objectively so that it can be replaced by existing conventional methods of interrogation. Narco analysis test can be effective as an alternative to barbaric third degree methods. Care should be taken that it is not misused or abused by investigation officer and should be correlated with corroborative evidence. Such test is a result of advancement not only in Forensic science but also in Science and Technology. It often Raises doubts regarding basic human rights and about their reliability.

Legal questions are raised bout validity with some of them holding in the light of legal Principles and Perceptive and some others rejecting it as a violence of constitutional Provisions.

Historical perspective:

In 1922, Robert House, an obstetrician from Texas, experiment the use of narco analysis in the interrogation of suspected criminals. He arranged to interrogate two Prisoners in the Dallas country jail by using Scopolamine1, whose guilt seemed clearly confirmed. Both the prisoners denied the crimes for which they have been detained and upon trial were [1]found not guilty. After the successful experimentation, House concluded that an accused under the influence of scopolamine could not lie.

The Narco analysis during past was used only by psychiatrists to find out the psychological reality. Nevertheless, the application of the Technique was adopted frequently in the criminal investigation from early 1950s.

Narco analysis was rather unheard in India until recent past. It was first used in 2002 in the Godhra Carnage Probe. Narco analysis test once again is in the limelight in the contest of Aarushi Murder case. It was also used in Nithari village serial killings case, Telgi Stamp paper Scam, Arun Bhatt Kidnapping case in Gujarat, and others.

What is Narco Analysis Test?

The term Narco-Analysis is derived from the Greek word “narke” meaning anesthesia and is used to describe a diagnostic and psychotherapeutic technique that uses psychotropic drugs, particularly barbiturates, which acts as Central Nervous System depressants, and by virtue of this, they produce a wide spectrum of effects from mild sedation to anesthesia.

Narco-Analysis tries to recall repressed materials. The therapist gives post-hypnotic suggestion to patient. Repressed material is recalled during influence of the drug and repressed conflict of the patient is located and cured.

Procedure of Narco-analysis test:

The narco analysis test is conducted by mixing 3 grams of sodium penthol or sodium amytal dissolved in 3000ml of distilled water. Narco test refers to the practice of administering barbiturates or certain other chemical substances, most often penthol sodium, to lower a subject’s inhibition, in the hope that the subject will more freely share information, a person is able to lie by using his imagination. Experts inject a subject with hypnotics like sodium penthol or sodium amytal under controlled circumstances of the laboratory. The dose is dependent on the person’s sex, age, health and physical condition. The subject, which is put in a state of Hypnotism, is not in a position to speak up on his own but can answer specific but simple questions after giving some suggestion. The answers are believed to be spontaneous as a semi-conscious person is unable to manipulate the answers. Wrong dose can send the subject into coma or even result in death.

The subject is then interrogated by the investigating agencies in the presence of doctors. The revelations made during this stage are recorded both in video and audio cassettes. The report prepared by the experts is what is used in the process of collecting evidence.

The procedure is conducted in government hospital after a court order is passed instructing the doctors or hospital authorities to conduct the test. Personal consent of the subject is also required.

It is established that in of the total number of the individuals subjected for narco analysis are found to be innocent. Therefore this technique not only helps to identify the real perpetrator of crime, conspiracies, displacement of evidentiary items etc. but also to identify the innocents within a short period.

Pros and Cons of Narco Analysis Test:

According to police Narco analysis is a scientific tool of investigation, it helps a lot in crime prevention and detection. It is definitely considered better than third degree treatment of the police to extract truth from an accused.

It is not possible to determine the correct dose of the drug, which varies according to the physical constitution of the subject, but also his mental attitude and will power. A wrong dose can send the subject into coma or even cause death, thus resulting in legal complication. The person to administer them has to be highly qualified physician.

The test can be misused by suggestive questioning by the investigating agencies. Psychiatrists hold that some individuals are suggestible even while fully conscious, meaning they can be made to believe events that never actually happened. Therefore, while patients under narco analysis may find it difficult to lie consciously, they can certainly say things that are on the surface on their mind. The patient may say things that he wished were true and not that are necessarily true.

Constitutional Validity:

Some legal experts consider that narco analysis test during the investigation is a blatant violation of Art. 20(3) of our constitution. Art. 20(3) says, “No person accused of any offence shall be compelled to be witness against himself”

The conditions for the applicability of Art. 20(3) are:

There must be a person accused of any offence. There must be compulsion against such person. Such compulsion must be to be witness and Such person must be compelled to be a witness against himself, in other words to incriminate himself by his evidence.

All these four ingredients must be necessarily co exist before the protection of Art. 20(3) can be claimed. If any of these ingredients is missing Art. 20(3) cannot be invoked.

The controversy regarding test is against the fundamental right is due to the modus operandi of the test. In the test, the drug is administered which suppress the reasoning power without affecting the memory and speech.

The test also goes against the maxim “Nomo tenetur se Ipsum Accusare” which means no man not even the accused himself can be compelled to answer any question, which may tend to prove him guilty of a crime of which he has been accused. The previously mentioned principle of the maxim is also incorporated in the section 161(2) of the code of criminal procedure.

Sec. 161(2) of Cr. P. C says that such person shall be bound to answer truly all questions relating to such case put to him by such officer, other than the questions the answer to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.

The most important case in this regard is that of Nandini Satpathi v. P. L. Dani (AIR 1978 SC 1025).

Facts: Nandini Satpathi was a former chief minister of Orissa, against whom a case was registered under the Prevention of Corruption Act. She was asked to appear before the Dy. S. P for questioning. The police wanted to interrogate her by giving her a string of questions in writing. She refused to answer the questions because it was a violation of her fundamental right against the self-incrimination.

In the previously mentioned case Krishna Iyer, J. has widened the scope of the protection. The issue before the court was whether a potential candidate for accused can avail of the privilege. It was held that the right extends to witness & the accused alike. The expression ‘accused of any offence’ must mean formally accused in presenti not in futuro. It applies at every stage at which furnishing of information & collection of material takes place.

Thus, Right to Silence has been granted to the accused by virtue of the pronouncement in the case of Nandini Satpathi. No one can forcibly extract statements from the accused, who has right to remain silent during the course of interrogation (investigation). By administration of narco analysis test, forcible intrusion into one’s mind is being restored to, thereby nullifying the validity & legitimacy of the Right to Silence.

It is an accepted legal position that the protection of Art. 20(3) do not extend to compulsory production of material or compulsion to give specimen signatures, finger impression or blood samples. However, Narco analysis is still different & clearly distinguishable from giving specimen signatures or blood samples or even taking a polygraph test because except in case of a narco analysis, the accused retains his control over what he is doing or saying & at no point of time can he be compelled to disclose any such information that he wants to keep to himself. Giving blood sample or specimen signatures is much like allowing the investigation officer to search the residence of the accused & go through his belongings in search of evidence. That is very much permissible.

The legal & constitutional infirmity of narco-analysis lies in the fact that it takes away one’s control on one’s mind, which brings it in category of mental torture & torture of all kind fall foul with Art.21.

Now the question may arise that the so-called ‘consent form’ sign by the accused supplies the requirement of the ‘voluntary discloser’. It is incorrect as in the court mandated narco analysis, the ‘consent form’ has absolutely no relevance because the compliance of a judicial order passed by a competent authority to compel obedience. Therefore, if a competent court orders narco analysis the order has to comply with, unless it is challenged by the superior court. The accused has no choice against the court order. Therefore, there is ‘compulsion’, there is ‘testimony’, and it is surely ‘testimony by compulsion’. However, compulsion per se is not illegal. Therefore, the only one question is whether the compulsion is legally sound.

The Madras High Court in Dinesh Dalmia v. State of Madras held that subjecting an accused to undergo such scientific tests would not amount to breaking his silence by force. He may be taken to the laboratory for such test against is quite voluntary. Therefore, such process does not amount to compelling a witness to give evidence against him. When the human rights activist adopt third degree methods to extract information from the accused, it is high time the investigating agency took recourse to scientific methods of investigation.

The Bombay High Court in Abdul Karim Telgi case held that “certain physical tests involving minimal bodily harm” like narco analysis test and brain mapping does not violate Art. 20(3) and did not compromise the constitutional protection against self-incrimination. The important point is that the confession or statement made during narco analysis is not admissible as evidence in a court of law, and that is the reason why the protection against self-incrimination under Art. 20(3) is not breached. In the above-mentioned case Bombay High Court seems to have held that nacro analysis is permissible because it involves “minimal bodily harm”, which implies that all such methods of extracting information that inflict minimal bodily harm are legally permissible.

However, the final judicial pronouncement on the constitutional status of narco analysis is yet to come. In 2006, Supreme Court of India stayed the order of a metropolitan judge to conduct nacro analysis on K. Venkateswara Rao in the Krushi cooperative Urban Bank case. The issue required to be settled by a court decision because Mr. Rao refused to sign the consent form & hence the Forensic Laboratory at Gandhinagar declined to conduct a narco analysis test without a duly filled and signed consent form. The Supreme Court verdict is still awaited.

Conclusion:

Law is a living process, which changes according to the changes in society, science, and ethics and so on. Law is not static but it is dynamic. The legal system should imbibe developments and advances that take place in science as long as they do not violate fundamental legal principles and are for the good of the society. The criminal justice system should be based on just and equitable principles. The issue of using narco analysis test as a tool of investigation in India has been widely debated. The extent to which it is accepted in our legal system and our society is something, which will be cleared in the near future. In a situation where narco analysis is gaining judicial acceptances and supports despite being an “unreliable and doubtful” science, we have to seriously rethink about its legal and constitutional validity from human rights perspective.

The criminal justice system is based on the principle that “let hundred guilty go unpunished rather than an innocent is punished”. To uphold this principle narco analysis test has to be made compulsory in cases where the interest of public is involved. For this purpose, it is necessary to amend or to enact new laws for that purpose so that justice may be delivered in a fair manner.

[1] Scopolamine is also popularly known as tooth serum.

By: urja

The Tribunalization of Justice: the Constitutional Validity of the National Tax Tribunal

Admin — Mon, 03 Aug 2009 02:48:22 +0000

Introduction:

The passing of the Forty Second Amendment to the Constitution of India in 1976, tribunals became key dramatis personae in the justice delivery system. In order to achieve the objectives of the amendment, which was to ensure speedy disposal of cases, an array of tribunals were set up. These included the Administrative Tribunals, the Rent Control Tribunals and also Tax Tribunals. The constitution and functioning of these tribunals have been controversial and intensely debated. The Constitution of the National Tax Tribunals, through the passing of the National Tax Tribunal Act, 2005 in pursuance of Article 323-B (1) (a). The Act provides a machinery for the adjudication by the National Tax Tribunal of disputes with respect to levy, assessment, collection and enforcement of direct taxes and also to provide for the adjudication by that Tribunal of disputes with respect to the determination of the rates of duties of customs and central excise on goods and the valuation of goods for the purposes of assessment of such duties as well as in matters relating to levy of tax on service. The Act is bound to raise constitutional issues of immense significance as to validity of conferral of the power and functions of the Tribunal, the exercise of such powers and functions, and the concept of judicial review under the Constitution.

The Edict Machinery of Tribunals in India:

The concept and the constitution and functioning of the Tribunals established under Administrative Tribunals Act. The exclusive jurisdiction hitherto have the benefit of by the Tribunals in service matter and distinguish the High Courts was put at stop partially by the Supreme Court of India in its landmark judgment in ‘L.Chandra Kumar Vs.Union of India and others. The Supreme Court diversified and re-distributed the jurisdiction of service matters etc in between these Tribunals for which purpose they have been established and High Courts as per the spirit of the Constitutional mandate enunciated by the framers of the Constitution, keeping in

view the ‘Basic Structure Theory’ and the provisions contained under Article 226,227, 32 and Articles 323 A and 323 B of the Constitution of India.

The salient feature of our Constitutional system that whenever new legislations or enactments are passed, either by Parliament or Legislative Assemblies, it is generally found that, they, being tested in courts of law, either on their validity as a whole or certain provisions of such acts if they are offending any provisions of Constitution, any public policy or established legal principles. Therefore, no exception was shown to the ‘Administrative Tribunals Act, 1985, enacted in terms of Article 323 –A of the Constitution of India. Consequent upon the establishment of service Tribunals in the country ‘under the Administrative Tribunals Act, 1985, a string of litigation had erupted before the High Courts of several States and also in Supreme Court, questioning the validity of certain provisions of the Act and also ultra vires of Articles 323-A and 323-B. Firstly, the ‘Apex Court’ by a Five Judge Constitution Bench, headed by the then Hon’ble Chief Justice, Justice P.N. Bhagwati, examined the constitutional validity of Article 323-A and its provisions in S.P. Sampath Kumar Vs. Union of India and others3 said Bench while upholding the validity of Article 323-A, held that the Service Tribunals created under Article 323-A are substitutes to the High Courts and the exclusion of the jurisdiction of High Courts is legal. Thereafter, a seven Judge Constitution Bench of the Supreme Court in ‘L. Chandra Kumar case’ while dealing with power of judicial review vested in High Courts and Supreme Court under Articles 226,227 and 32 respectively vis-a-vis Articles 323-A and 323-B not only deviated from the earlier discussion of the Supreme Court in ‘S.P. Sampath Kumar’s case’, but also held that, the Tribunals are supplementary in their role and the power of ‘Judicial Review’ vested in High Courts and Supreme Court under Articles 226, 227 and 32 is an inviolable basic structure of the Constitution and struck down clause 2(d) of Article 323-A and clause 3(d) of Article 323-B of the Constitution of India to the extent they exclude the jurisdiction of High Courts and Supreme Court under Articles 226/227 and 32 as unconstitutional and also Section 28 of the

‘Administrative Tribunals Act, 1985′ which excludes the jurisdiction of High Courts. The Supreme Court in the above case further held that: “The Tribunals created under Article 323-A and 323-B of the Constitution are possessed of the competence to test the constitutional validity of statutory provisions and rules. All decisions of these Tribunals will, however, be subject to scrutiny before a ‘Division Bench’ of the High Court within whose jurisdiction the concerned Tribunal falls. The Tribunal will, nevertheless, continue to act like Courts of ‘first instance’ in respect of the areas of law for which they have been constituted. It will not, therefore, be open or litigants to directly approach the High Courts even in cases where they question the vires of statutory legislations (except where the legislation which creates the particular Tribunal is challenged) by overlooking the jurisdiction of the concerned Tribunal.” In the same case, when an argument was advanced for the superintendence over the Tribunals by the concerned High Courts, the Supreme Court categorically held as follows: “To this end, it is suggested that the Tribunals be made subject to the supervisory jurisdiction of the High Court within whose territorial jurisdiction they fall. We are, however, of the view that this may not be the best way of solving the problem. We do not think that our Constitutional scheme requires that all adjudicating bodies which fall within the territorial jurisdiction of the High Courts should be subject to their supervisory jurisdiction. If the idea is to divest the High Courts of their onerous burdens, then adding to their supervisory functions cannot in any manner, be of assistance to them”. Therefore, in view of the law laid down by the Supreme Court in ‘Chandra Kumar’s case’(emphasis furnished supra) this Tribunal is now functioning as a ‘Court of first instance’ like any other Tribunal in the country established under Article 323-A of the Constitution of India. It is also to be noted that the ‘Judicial Review’ propounded by the Supreme court in ‘Chandra Kumar’s case cannot be treated/equated with an ‘Appeal’ in as much as the constitutional exercise by way of ‘Judicial Review’ displayed by the High Courts originated from the ‘Basic Structure Theory’ read with Articles 226 and 227 of the Constitution of India.

Appellate provisions under the direct and indirect tax enactments

Aforementioned to National Tax Tribunal, under the direct and indirect tax enactments, appeals on substantial questions of law from the decisions of tribunals such as the Income Tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal lies to the High Court.

The Income Tax Appellate Tribunal Under Section 252 of the Income Tax Act, 1961 an appellate tribunal known as Income Tax Appellate Tribunal has been set up which consists of both judicial members as well as Accountant members. This tribunal hears appeals against orders passed by the Deputy Commissioner of Appeals or the Commissioner of Appeals, as specified in Section 253 of the Act on questions of law as well as questions of fact. Under the direct tax regime, Income Tax Appellate Tribunal is the final authority as regards determination of questions of fact. Under Section 260 A of the same Act, an appeal lies to the High Court, from every order passed by the Income Tax Appellate Tribunal if the High court is satisfied that the case involves a substantial question of law. However, there is also a provision for filing further appeals to the Supreme Court from any judgment of the High Court as specified under Section 261, only if the High Court certifies that the case is fit for appeal to the Supreme Court. In cases where High Court refuses to give such certificate, the aggrieved party has an option to invoke extraordinary jurisdiction of Supreme Court through special leave petition under Article 136 of the Constitution of India. Income Tax Appellate Tribunal, High Courts and the Supreme Court have been given similar powers of hearing appeals in respect of disputes concerning wealth tax under the Wealth Tax Act, 1957. The Customs, Excise and Service Tax Appellate Tribunal Under Section 129 of the Customs Act, 1962 the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has been constituted which consists of Judicial as well as Technical Members. The Tribunal hears appeals against orders passed by the authorities mentioned in Section 129 A of the Customs Act. It also hears appeals against orders passed by the excise authorities as specified in Section 35 B of the Central Excise Act, 1944. Earlier, instead of appeal a reference used to lie regarding questions of law. An appeal lies to the High Court on a substantial question of law against an order passed by the Customs, Excise and Service Tax Appellate Tribunal, under Section 130 of the Customs Act, as substituted by the Finance Bill, 2003. Similar provision has been incorporated in respect of appeals to High Courts under the Central Excise Act, 1944. The tribunal also has appellate jurisdiction in anti-dumping matters and the Special Bench headed by the President of the tribunal hears appeals against orders passed by the designated authority in the Ministry of Commerce. The appeals under the Service Tax are also heard by the tribunal. This tribunal is the appellate authority on matters relating to classification and valuation, with the appeals lying to the Supreme Court in these matters.

The Need for Establishment of National Tax Tribunal in India:

The necessity for uniformity and certainty in the administration of tax laws (both direct and indirect tax laws), appeals or references from the orders of the Income Tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal lie with the High Courts, these Courts get flooded with such cases which need considerable time to dispose them. Due to the heavy workload of the High Courts, there is a huge backlog of tax related cases as a result of which huge revenue is blocked in such litigations. This is adversely affecting the national economy. Hence, urgent measures are required to be taken to speed up taxation matters pending

before the High Courts. It may also be noted that there are at present 21 High Courts. Many a time, decisions of the High Courts vary from each other which create uncertainty, delays and problems in the administration of tax matters. Conflict of decisions amongst various High Courts

on the same point of law have the effect of distorting uniformity and give rise to unnecessary appeals to the Supreme Court which results in further delay.

National Tax Tribunal will help in clearing the backlog and mitigating the burden that lie at the doors of High Courts. The constitution of the National Tax Tribunal would relieve the taxpayers from the burden of pursuing the tax disputes for a long period and substantially reduce the workload of different High Courts which could not concentrate and devote as much focus which the complex tax laws presently demand.

Judicial Sovereignty and the National Tax Tribunal

In the Landmark Judgments of the Court in L Chandra Kumar and Sampath Kumar that even if the Tribunals have to play a supplemental role, given the powers that they enjoy, including the power to strike down legislation as ultra vires the constitution, the NTT will have to enjoy Judicial Sovereignty as understood in the Indian constitutional context. Judicial Sovereignty in India always has been a very controversial subject. The judicial pronouncements and the scholastic opinion in this regard, point out different stages at which the independence of the judiciary will have to be assessed. Judicial Sovereignty will include the collective independence of the judiciary from the other branches of the State and also the independence of the individual judges. The first aspect relates to appointment, removal etc whereas, the second aspect relates to matters concerned with security of tenure, salaries and allowance etc. Let us take up these issues in relation to the National Tax Tribunal. The Members and the Chairperson of the National Tax Tribunal are appointed by the Central Government in accordance with the recommendation of a selection committee consisting of the Chief Justice of India or his nominee. Though the other two members in the committee are not from the judiciary, it is submitted that this is sufficient safeguard against executive fiat. In terms of the qualification also sufficient safeguards seem to have been provided. The legislation provides that all members including the Chairperson have sufficient legal qualifications and adequate experience to handle complex matters relating to tax as also maters relating to the vires or otherwise of legislations and administrative actions. More importantly, the method of removal of the member and the Chairperson also has been made sufficiently elaborate to minimize executive interference. Section 11 provides that removal and suspension can take place only in consultation with the Chief Justice and on completion of a formal enquiry. The Chairperson also has been given enough discretion to constitute the benches of the National Tax Tribunal. In terms of salaries and other benefits, the members and the Chairperson have been accorded the same status as that of High Court judges. Also of significance is the fact that these Tribunals have been vested with contempt powers under section 12 of the NTTA, 2005 in addition to certain powers of the Civil Court granted to it in section 16. The legislation also protects actions taken in good faith in the course of discharge of duties by any member, Chairperson or other employee, which also helps in maintaining judicial independence. In all it is submitted that the provisions of the enactment do indeed secure judicial sovereignty.

The Differentiation of National Tax Tribunal and High Courts in India

There is a provision in the Act that may cause adversity to tax-payers. The Act stipulates that an appeal before the NTT can be preferred only if the appellant deposits at least 25 per cent of the tax or duty payable on the basis of the order appealed against. The NTT is also given the discretion to condone this requirement. There is no such stipulation in cases that go before the

high court. Yet another distinction is that no interim order can be passed by the NTT without hearing the other party. No Tribunal constituted under 323A or 323B of the Constitution can ever

oust the jurisdiction of the high court under Articles 226/227 of the Constitution. The writ jurisdiction of the high court will continue, despite the provision that appeals from the NTT will go to the Supreme Court. The NTT will, therefore, be one more forum working along with the

High court.

The Government makes it appear that there is huge pendency before the various high courts involving fiscal disputes. The truth seems to be that the overall pendency does not exceed 30,000 cases, the maximum being around 10,000 in Mumbai and an equal number in Delhi. Probably, constitution of permanent tax benches in these two High Courts will solve the problem for revenue. The NTT will not be governed by the Civil Procedure Code, though rules of natural justice will apply.

Conclusion

There cannot be fault with the intention of the Government, to reduce the backlog of cases, in proposing the National Tax Tribunal, but the way in which the NTT has been setup raises a lot of concern. Apart from creating multiple and simultaneous structure for the resolution of tax disputes, which will obviously lead to a lot of turmoil, the NTT also faces challenges in the form of allowing Chartered Accounts to appear before it. The enactment seems to fair well in terms of securing the independence of the judiciary but fails the Constitution on account of abridging the writ jurisdiction of the High Courts in relation to the transfer of cases. This is a grave blemish that will have to be rectified. Efficiency arguments for and against the Tribunal can be analyzed or answered only if a systematic and scientific study happens in that regard. The Law Commission must come out with official statistics in this regard. More importantly, we will have to decide whether Tribunals are the best way to deliver justice in relation to tax matters or whether mere creation of exclusive tax benches in the High courts would solve the problem. Vacancies in the High Courts are not filled regularly nor is there a concerted effort at the national level to streamline procedures relating to dispose off pending disputes. The Government has not been able to come up with any realistic presentation statistics of existing tribunals nor has it explained tribunalize the tax administration for the justice further. At least in future, efforts like this, to create an alternative forum and working substitute for the Court must be backed with methodical study, more debates and comprehensive planning, in order to guarantee that they do not end up as unproductive outlay at the hands of the exchequer.

Bibliography:

1) Durga Das Basu- Shorter Constitution of India- Thirteenth Edition 2001 Wadhwa Nagpur.

2) H.M.Seervai-Constitutional Law of India: A Critical Commentary- Universal Law Publishers

3) Walter W. Brudno- Taxation in India-Harvard Law School International Program in Taxation.

4) The National Tax Tribunal Act, 2005- Bharatgazette Government of India.

5) The National Tax Tribunal (Amendment) Act, 2007- Manupatra Bare Act.

By: Harsh