TIOL-DDT 1816 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font><font color="#663399" size="3">TIOL-DDT 1816 </font><br>
16.03.2012 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Former Members Cannot Practice Before CESTAT - Issue reaches finality with Supreme Court Judgement</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the year 2007, Section 129 of the Customs Act, 1962 was amended to insert a new sub-section (6) which stipulates that the President, Vice-President or other Member shall not be entitled to appear, act or plead before the Appellate Tribunal on ceasing to hold office. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some former Members did not like this amendment and had been fighting this out and yesterday, finally the Supreme Court upheld the amendment and ruled that the former Members cannot practice before the Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One of the appellants before the Supreme Court was PC Jain who joined the Indian Customs and Central Excise Service, Class I (later called Group ‘A'), in the year 1956, where he served for a number of years, in different capacities. On 1st November 1990, he was selected as a Member (Technical) in the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). The appellant demitted his office as Member (Technical) of CEGAT on 7th March 1993. As he was a law graduate, he was enrolled as an advocate with the Bar Council of India on 18th March 1993. The CEGAT was replaced by the Central Excise and Service Tax Appellate Tribunal. Vide Finance Act, 2007, Section 129(6) was introduced to the Customs Act, 1962 in terms of which, the members of the Tribunal were debarred from appearing, acting or pleading before it. Aggrieved by this amendment, the appellant along with other appellants in other appeals claimed to have met the Finance Minister and submitted a detailed representation bringing out the inequities and arbitrariness claimed to be resulting from the insertion of Section 129(6) of the Customs Act. The Tribunal, on 9th July 2007, passed an order holding that the appellant or the persons similarly situated were not entitled to appear before it in view of the bar contained in Section 129(6) of the Customs Act. In the meanwhile, the Ministry also responded negatively to the representations submitted by the appellants. Faced with these circumstances, the appellants filed a writ petition before the High Court of Delhi, which was heard by a Division Bench of the High Court and was dismissed vide judgment dated 13th April 2009 <em><strong>(<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2009/2009-TIOL-185-HC-DEL-CESTAT.htm" target="_blank">2009-TIOL-185-HC-DEL-CESTAT</a></font>)</strong></em>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Former Member is before the Supreme Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court was of the view that the predominant rationale for introduction of this provision was to strengthen the cause of administration of justice and to remove what the Legislature, in its wisdom, felt was a perceived class bias. It was further held that the restriction imposed could not be said to be unreasonable and was held to withstand the test of Article 19(6) of the Constitution. It also held that once the right to appear, act or plead is taken away in respect of the Tribunal, since the same forum hears and adjudicates upon the matters concerning three streams of law, the persons concerned are automatically debarred from acting, appearing or pleading before such forum, i.e., the Tribunal in respect of all matters. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the appeals before the Supreme Court, the questions raised were: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Whether Section 129(6) of the Customs Act, 1962, which stipulates that on demitting office as Member of the Customs Excise and Service Tax Appellate Tribunal (hereinafter referred to as the “CESTAT”) a person shall not be entitled to appear before the CESTAT, is ultra vires the Constitution of India? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Whether the said provision applies to the petitioner, as it was introduced after the petitioner had not only joined as Member of the CESTAT but also demitted office as such Member? </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“The right to practice, which is not only a statutory right under the provisions of the Advocates Act but would also be a fundamental right under Article 19(1) (g) of the Constitution, is subject to reasonable restrictions. An argument could be raised that a person who has obtained a degree of law is entitled to practice anywhere in India, his right, as enshrined in the Constitution and under the Advocates Act cannot be restricted or regulated and also that it is not necessary for him to enroll himself on any of the State rolls. This argument would be fallacious in face of the provisions of the Advocates Act as well as the restrictions contemplated in Article 19(6) of the Constitution. The Legislature is entitled to make a law relating to the professional or technical qualifications necessary for carrying on that profession. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As already noticed, the right to practice law is a statutory right. The statutory right itself is restricted one. It is controlled by the provisions of the Advocates Act, 1961 as well as the rules framed by the Bar Council in that Act. A statutory right cannot be placed at a higher pedestal to a fundamental right. Even a fundamental right is subject to restriction and control. It is not possible to imagine a right without restriction and controls in the present society. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the appellants were enrolled as advocates as well as when they started practicing as advocates, their right was subject to the limitations under any applicable Act or under the constitutional limitations, as the case may be. One must clearly understand a distinction between a law being enforced retrospectively and a law that operates retroactively. The restriction in the present case is a clear example where the right to practice before a limited forum is being taken away in presenti while leaving all other forums open for practice by the appellants. It is not for the Court to interfere with the implementation of a restriction, which is otherwise valid in law, only on the ground that it has the effect of restricting the rights of the people who attain that status prior to the introduction of the restriction. It is certainly not a case of settled or vested rights, which are incapable of being interfered with. It is a settled canon of law that the rights are subject to restrictions and the restrictions, if reasonable, are subject to judicial review of a very limited scope”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court did not find any reason to accept the submission that enforcement of the restriction retroactively would be impermissible, particularly in the facts and circumstances of the present case. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another half-hearted attempt was made to raise a contention that the appellants can continue to appear before the Tribunal as they are permitted to do so in terms of Section 146A of the Customs Act, despite the provisions of Section 129(6) of the Customs Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court did not find any merit in this contention as well. The provisions of Section 129(6) of the Customs Act are specific and both these provisions have to be construed harmoniously. Supreme Court found nothing contradictory in these provisions. Section 146(2)(c) of the Customs Act refers to the appearance by a legal practitioner who is entitled to practice as such in accordance with law. Section 129(6) places a restriction, which is reasonable and valid restriction, as held by the Court. Thus, the provisions of Section 146A of the Act would have to be read in conjunction with and harmoniously to Section 129(6) of the Customs Act and the person who earns a disqualification under this provision cannot derive any extra benefit contrary to Section 129(6) of the Customs Act from the reading of Section 146A of the Customs Act. The Supreme Court had no hesitation in rejecting this contention as well. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Held:</strong> the provisions of Section 129(6) of the Customs Act and its operation cannot be faulted with. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Retired Supreme Court Judges do not practice in the Supreme Court and do we need the Supreme Court to tell the former Members that it is not proper for them to appear before the Tribunal? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This judgement will have its effect on<strong> ITAT</strong> too.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tail spark : We are told that even after the Supreme Court delivered its judgement yesterday, a former Member of the CESTAT argued a couple of cases before the CESTAT – maybe his last appearance before the Tribunal.</font></p>
<p align="justify"><em><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see </font></strong></em></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1) TIOL story on April 17, 2009:</strong> <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8901" target="_blank"><strong>Former Members cannot practise in CESTAT - No unregulated right of practice - There was a time when a son would appear in court presided over by his father and no questions were asked - Former members' writ petition dismissed: Delhi High Court</strong></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2)</strong> <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9209" target="_blank">‘No Practice for Retired ITAT Members'</a></strong> - <strong>TIOL-DDT 1137 22.06.2009</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>3)</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9412" target="_blank">Can retired ITAT Members practise in the ITAT – Special Bench to hear</a></strong> - <strong>TIOL-DDT 1159 22.07.2009</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>4)</strong> <strong>TIOL story on September 17, 2009:</strong> <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9678" target="_blank">ITAT Members who retired prior to 3.6.2009 and Members who resigned before being confirmed can practice in Tribunal - ITAT envious of CESTAT: ITAT Special Bench</a></strong><br />
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<strong>5)</strong> <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9704" target="_blank">Ex-CESTAT Member practicing in CESTAT – Does it not lower the Stature of the ex-Member & the CESTAT?</a></strong> – <strong>DDT 1202 – 23 09 2009 </strong><br />
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<strong>6)</strong> <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9680" target="_blank">Former ITAT Members – Practice Before ITAT?</a></strong> - <strong>DDT 1199 17.09.2009</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>7)</strong> <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12703" target="_blank">Are Retired Members of ITAT Eligible to Practice before ITAT? Matter once again before ITAT Special Bench</a></strong> - <strong>DDT 1640 - 29.06.2011</strong><br />
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>8)</strong> <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9678" target="_blank">ITAT – Practice by Former Members – Retired Members can practice before Benches where they have not worked – Till next hearing</a></strong> - <strong>DDT 1783 - 27.01.2012</strong></font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">We bring you this landmark judgement today </font></strong></font></p>
<p><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Please see </em></font></strong></font><em><strong><font size="1" face="Verdana, Arial, Helvetica, sans-serif"> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2012/2012-TIOL-28-SC-CESTAT.htm">2012-TIOL-28-SC-CESTAT </a></font></strong></em> </p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value Increased for Brass Scrap </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has increased the tariff values of Brass Scrap (all grades) from USD 4143 to USD 4214 and changed the tariff value of poppy seeds from USD 2439 to 2439. (<font color="#FF6633"><strong>Actually there is no change but the Government Notification says it is amended from 2439 to 2439!</strong></font>)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tariff Value of Gold and silver and other items remain unchanged. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_019.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 19/2012-CUS (N.T.), Dated : March 15, 2012</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Union Budget Today </font></strong></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MR SPEAKER</strong>, Sir, I have set forth a framework of policies with a view to encouraging higher savings, investment and production in the economy. Plan outlays are being stepped up substantially. Adequate provision has been made for national security. Despite these commitments, the budgetary deficit has been contained within reasonable limits. To achieve this, a measure of resource mobilisation was inescapable. I have, however, taken care to see that resources are raised without building new inflationary pressures. In particular, I have tried to avoid placing burdens on the low and middle-income groups. The Budget constitutes a challenge to all those who are associated with the implementation of our development plan. It is an<strong> invitation</strong> to farmers, industry and labour for higher productivity; to the trading community for ensuring healthy marketing and distribution; and, indeed, to all our people, soldiers and civilians, to march forward shoulder to shoulder in the twin tasks of national development and defence . </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does it sound familiar? It is not from today's Budget Speech, but from the speech of the then Finance Minister while presenting the 1982 Budget! And you know who was that Finance Minister? Our Own Pranab Da with his maiden Budget. Exactly thirty years later, he is back. Nothing has changed – including the FM! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And then he was collecting about Rs. 15,000 Crores as Tax Revenue! His Revenue has increased 60 times in these thirty years and the invitation remains. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the next few days, we will bring to you all the facets of the Budget.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p>
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