Ruling in Madras Bar Association v Union of India and another, a constitutional bench of the Supreme Court recently held that key sections of the National Tax Tribunal Act, 2005, encroach on the exclusive domain of the superior courts and thus are “illegal and unconstitutional”. The court said this rendered the remaining provisions of the act, which provides for the establishment of a National Tax Tribunal (NTT), “otiose and worthless” and as a result the five-judge bench set aside the entire act.
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The NTT, a quasi-judicial appellate tribunal, was to hear matters that were within the appellate purview of the high courts. The Madras Bar Association argued that substituting the high court’s power of judicial review with an extra-judicial body undermined the process of independence and fairness. Allowing the petition, the Supreme Court held that only the high courts and the Supreme Court could decide substantial questions of law.
Holding that it was difficult “to appreciate the propriety of representation, on behalf of a party to an appeal, through either chartered accountants or company secretaries” as “determination at the hands of the NTT is shorn of factual disputes”, the court declined a request by company secretaries to represent parties before the NTT. It simultaneously held that section 13(1) of the act, insofar as it allowed chartered accountants to represent a party to an appeal before the NTT, was unconstitutional and unsustainable in law.
The ruling is a shot in the arm for lawyers across India who have urged the government to allow only advocates to appear before tax authorities at all levels. At present chartered accountants, company secretaries and management professionals appear before tax authorities, relying on section 33 of the Advocates Act, 1961, which allows professionals to appear before a forum under “any other law for the time being in force”.
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The dispute digest is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
