Case Law Details
Vide Notification dated 3rd June 2009, Rule 13E was inserted in the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963 to provide that “The President, the Senior Vice-President, the Vice-President and the Members of the Tribunal shall not practice before the Tribunal after retirement from the service of the Tribunal”. The Special Bench had to consider whether the said Notification applied to Members who resigned / retired before the date of issue of the said Notification and allied issues. HELD:
(1) The argument of the Ministry of Law & Justice that the ITAT could not go into interpretation of Rule 13E is not acceptable because in accordance with the duty of the Tribunal to give a proper hearing to the parties, the Tribunal has inherent jurisdiction to consider whether the parties who are appearing before it are properly entitled under the law to make appearance;
(2) On the question whether Rule 13E can apply to Members who have “resigned” from service, Rule 13E is confined to “retirement”. There is a well known difference between “retirement” and “resignation”. While ‘resignation’ is a deliberate act of relinquishment of service, ‘retirement’ is an event that takes place on attaining superannuation;
(3) The Resigned Members were appointed on a “temporary” basis and were subject to a “probation” period. The said Members had resigned during the probation period, much before their confirmation. Such Members who had resigned and terminated their contract of employment with the Government before confirmation cannot be said to hold any post and there is no question of any conditions of services being applicable to them after resignation. They cannot be treated as having been “retired” from service for purposes of Rule 13E and were not disqualified from appearing before the ITAT;
(4) As regards Members who retired on superannuation, while in respect of CESTAT, a legislative amendment was made in the Customs Act, in relation to the ITAT, a “risky route” of amending the “conditions of service” was adopted. Though the object with which the Notification is issued i.e. to bring in reformatory steps to uphold the dignity of the Institution and to free it from charges of bias in discharge of its judicial function is laudable, it should be seen whether the means by which it is sought to be achieved stands the test of law. Rule 13E goes beyond the conditions of service. Earlier s. 288 (3) (omitted w.e.f 1.10.1984) had imposed a similar bar and its’ validity had been upheld by Court. The larger public interest which the legislature envisaged while dropping the provision that already existed cannot merit ignorance merely because the executive authority felt otherwise, perhaps wiser than the higher wisdom of the Parliament. Thereafter, the same object was sought to be enforced by an amendment to the pension rules which prohibited CG employees from appearing before the same income tax authorities to which they belonged while they were in service. This provision was struck down by the apex court in R. Kapoor A 1987 SC 415 as being unconstitutional and invalid. As a result of this legislative exercise, now it is difficult to say that identical provision under conditions of service can still pass the test of validity in the eyes of law. The interpretation of the Supreme Court in connection with the Pension Rules cannot merit ignorance or be slighted merely because the executive’s attempt in bringing Rule 13E is in the direction of bringing some reformative provisions to free the judiciary from the charges of bias in their judicial functions. The executive if permitted in this manner will only set naught the judicial interpretation rendered by the highest court of the land and also bypass the higher wisdom of Parliament. One must be conscious of the fact that limited ban of two years on retired income tax employees was not approved by the Supreme Court. It is difficult to imagine or accept that the present Notification which under the garb of conditions of service seeks to enforce a life ban of ex-members will receive judicial sanction in the background of R. Kapoor’s case; (Clarified that nothing was held about the legislative competence of the President to make the Rules in the manner it is done);
Please become a Premium member. If you are already a Premium member, login here to access the full content.