CHENNAI: The Madras High Court has stayed National Tax Tribunals Act 2005, that provides for formation of National Tax Tribunals (NTTs) to hear appeals against orders of Income Tax Appellate Tribunals.The First Bench, comprising Chief Justice A.P. Shah and Justice Prabha Sridevan, granted the interim stay after admitting a writ petition filed by the Madras Bar Association represented by its president K.R. Tamizhmani on Friday.The Bench also ordered notices to the Union Ministries of Finance and Law, Justice and Company Affairs, and posted the matter to February 14 for further hearing.

Assailing the Centre’s move, Mr. Tamizhmani said Article 323B of the Constitution was violative of the basic structure of the Constitution as it “permits taking away the judicial functions from the High Courts and vesting them with Tribunals, which are not under the control of the Union Judiciary.”

Challenging the constitutional validity of the Act, he said it was beyond the legislative competence of Parliament. “The NTT is yet another attempt at tribunalisation of justice and seeks to decimate the jurisdiction of courts and enlarge the influence of the executive through quasi-judicial Tribunals.”

Claim refuted

The petitioner contested the Center’s contention that over 80,000 tax cases were pending in various High Courts. Terming it “completely false,” Mr. Tamizhmani said: “As of October 2003, the arrear was approximately 29,000 cases. Pendency is substantial only in Mumbai and Delhi. In the Madras High Court less than 2,000 cases are pending and there is similar or even lesser pendency in Karnataka and Kerala.”

He said the functioning of most of the Tribunals was unsatisfactory. The composition of the select committee was faulty. As it comprises a judge and two civil servants, “nothing prevents the civil servants from overruling the recommendations of the Chief Justice of India or his nominee.”

The provision for the Government to transfer the NTT Members and the tenure-based appointments would be destructive of the NTT’s independence.

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