TIOL-DDT 258 · the untouched capture
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<p><font color="#993399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#6633CC">TIOL-DDT
258</font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<strong>09 12 2005<br>
Friday</strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<font color="#006600"><strong>NATIONAL TAX TRIBUNAL BILL, 2005 – IRS left
out</strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
The NTT Bill is through Parliament and will perhaps soon be a reality. While
weighty comments are being made by scholarly analysts, DDT would like to bring
to you the views of our Honourable members of Parliament on the subject. Incidentally
the IRS officers, whose chance of joining the NTT is very bleak, found favour
with some MPs. In the live telecasts we often see the disturbances in Parliament
but from the discussion that we bring you here, it can be seen that our Parliamentarians
are a well-informed lot. They have covered every aspect that a seminar with
tax experts would have covered and with more precision. Most of these members
are in the standing Committee on Finance before which august body <b>TIOL had
the singular honour of appearing to make submissions on our tax laws. </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
The Honourable members showed concern that the Tribunal does not have enough
place for tax experts, that the recommendations of the standing committee were
not accepted. As the bill had its origin in the NDA regime and was taken forward
by the present government, there was general acceptance with even the Law Minister
stating that the NDA government wisely brought in this bill. When decibels are
down our parliament is a citadel of intellectual excellence we can be really
proud of. See what our leaders have to say about NTT.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI BACHI SINGH RAWAT : </strong>This Bill was introduced in November
2004 and again referred to the Standing Committee. <strong>The Committee has
given a number of important suggestions and recommendations, but amendments
done are only ‘2005’ in place of ‘2004’ and ‘56th’
in place of ‘55th’. </strong>Only these amendments have been circulated
and no other amendment has come from the Government side. It has been said therein
that the order of the tribunal will be final. So, there is a need to consider
this point even more seriously.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
When a Bench shall have only two Members there will be problem in case there
is difference of opinion. In Clause-18 there is a provision that in case of
difference of opinion the matter will be referred to the Chairperson. This situation
will create a higher Bench. Therefore, it would be better to remove the anomalies
in the very beginning and I would suggest that the Bench should comprise of
three or five members. In such a situation Clause-18 will not be required.<br>
<br>
The Standing Committee and myself had given a suggestion that in case judges
are not available or there is shortage of judges, there should be a safeguard
for such situations. In this Bill, there is a mandatory provision that the Chairperson
of the tribunal will only be a Chief Justice of a High Court or a judge of the
Supreme Court. In this regard, the Standing Committee had given a suggestion
that Income Tax Chief Commissioner, who belongs to Indian Revenue Service should
be appointed in the Tribunal keeping in view his experience in this field. A
person who has worked as member in Income Tax Appellate Tribunal or Service
Tax Appellate Tribunal for seven years can also be appointed as Chairperson
of this Tribunal. If we do so, we shall not have any shortage of judges. In
Clause-10 it has been said that judges will be appointed as Chairperson. He
will be provided all facilities but no vacations. I would request that they
should be allowed to go on vacations. There is a provision that the senior member
of the tribunal will take over as acting Chairperson. Therefore, it would be
in their interest and I hope hon. Minister will pay attention to it.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
In this Bill, it has been state forwardly said that the order of a tribunal
shall be final and cannot be challenged in any civil court. In this context
Supreme Court has said that their powers should not be curtailed by constituting
such a tribunal. Therefore, it requires to be clarified. Standing Committee
also wanted this to be clarified. <strong>I would urge that some of the recommendations
of the Standing Committee should be accepted otherwise this Committee will become
meaningless.</strong><br>
<br>
<strong>SHRI VIJAYENDRA PAL SINGH:</strong> I am told that most of the judges
on this National Tribunal will be from the High Court and the Supreme Court.
So, why is it that only the judiciary is going to be sitting on this Tribunal?
Why not the experts, the people who understand the tax laws. <strong>I feel
that good IRS officers should also be taken.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI K.S. RAO:</strong> The Bill states that only sitting and retired
judges are eligible. It is not necessary that for everything we need to consider
only the judiciary. There are eminent people who are very knowledgeable. Today
we require more persons who are knowledgeable in a particular subject, not merely
in law. I fully support that the <strong>Government must consider in terms of
thinking of competent youngsters also</strong>. From the records or from the
information that is available, one can say around 34,030 cases are pending.
Today’s statistics reveal that they could dispose of only 6,000 cases
per year. Obviously, to dispose of these cases today pending in the High Court,
it takes many more years.<strong> </strong>The Bill will do very good help to
the nation instead of causing delay for years and years to settle these matters.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
We are making excellent Acts after careful consideration but then how is it
being implemented is also to be monitored. <br>
<br>
The moment this Act comes into force, all the cases that are now lying in the
High Court will be transferred to this Tribunal. If those cases were to be transferred
to this Tribunal, then, once again, they will have to start from the beginning
and it will take a long time. I just wish that some way should be found out
to see that those cases which are the in the final stage of hearing and where
judgment is awaited can be dealt with by them without delaying them once again.
We must take care that the provisions of this Act would not be misused by the
officers concerned. That also has to be monitored regularly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI VARKALA RADHAKRISHNAN :</strong> The purpose of the Bill is to
provide some assignment to top bureaucrats who are on the verge of retirement.
At present twenty-one High Courts are dealing with the tax cases. The pending
cases in 21 High Courts will be taken to one Tribunal resulting in accumulation
of appeals. There is no need for the continuance of this Bill since tax cases
can be dealt with by giving additional Benches in every High court. This way,
no additional expenditure is required. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
Therefore, we are definitely of the opinion that there is no need for this Bill.
It is very unfortunate that the Government has decided to proceed with the Bill
to safeguard the interest of the top bureaucrats. By this Bill the pendency
would not be reduced and the revenue would not be increased. I expect the Hon.
Law Minister, who is a very efficient and learned man, will rise to the occasion
and see that the public money is not wasted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI SHAILENDRA KUMAR :</strong> The services of officers of Indian
Revenue Services can also be utilized for the purpose. The proposed National
Tax Tribunal should also be given full autonomy and it should function in a
fair manner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI SURESH PRABHAKAR PRABHU:</strong> All the location to set up the
Tribunal has to be selected on the basis wherein it will obviate the difficulties
of various types of tax payers. It will be more appropriate to locate it in
Mumbai than in New Delhi. The same system which is applicable to the appointment
of High Court Judges should be applicable here also. Transfers of High Court
Judges are also governed by a system which is prevalent in the country. The
same system should be applicable because now, we are actually creating a system
parallel to the High Courts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
National Tax Tribunal should not be hearing only the matters which have been
disposed of by the Appellate Tribunal but should also be hearing matters in
the original jurisdiction, as has happened in the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI B. MAHTAB: </strong>As has been suggested, by creating the National
Tax Tribunal, the Government is going to expedite the cases. In the case of
tax dispute, the National Tax Tribunal will actually add another layer of judicial
intervention and this is one of the major faults with the National Tax Tribunal.
Under the current law, indirect tax disputes are heard by the Customs Excise
and Service Tax Appellate Tribunal and then by the Supreme Court, in the case
of an appeal. I would also like to know from the Government as to what will
happen once the National Tax Tribunal comes into force? My basic question to
the Government is whether is it not a fact that majority of the cases in the
CESTAT are decided against the Government? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI C.K. CHANDRAPPAN:</strong> If the Standing Committee has recommended
that there are other ways by which the Government could administer the tax regime
much better, then why has the Government not accepted it? One of the fears again
expressed by the Standing Committee was that by constituting this new tribunal,
more retired judges and more bureaucrats who are at the fag end of their service
would be provided with kursi and comfortable jobs at the end of their days.
I would like to know why such a measure should be taken when other methods are
there. While the legislative intention is laudable, I would like to know whether
this legislation is the only way by which that intention could be achieved.
Why did the Government not agree with the recommendations of the Standing Committee?
I would like to know what explanation the Government will give on this matter.
We support the legislative intention. But is the new system of Tribunal necessary?
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>PROF. M. RAMADASS:</strong>. This Bill says that members should either
be judge or should be a member of Income Tax Appellate Tribunal for at least
seven years. Why are the technical persons not included in this provision? I
feel that the persons retired from Indian Economic Service may also be considered
along with judicial officers and persons from Income Tax Appellate Tribunal
etc. The Bill does not mention anything about the number of benches. It should
be specifically mentioned. With regard to section 13, I would say that it should
include a party to an appeal other than Government may either appear in person
or authorize one or more company secretaries, cost and works accountants, chartered
accountants or advocates.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI P. S. GADHAVI:</strong> It is also seen in places like Delhi that
retired persons would like to be appointed in such Tribunals for the sake of
retention of their official accommodation or on the grounds of their children
studying in such places. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI KHARABELA SWAIN:</strong>. I would like to know if the Government
had made any study with regard to this. The Government has many other specialized
tribunals set up on the same lines. Have cases been disposed of in a quicker
way in the case of those tribunals? Regarding the point of eligibility, Clause
6 says, ‘A person shall not be qualified for appointment as a member unless
he is eligible to be a judge of a High Court’. Also, does the Minister
not think that a situation may emerge in which all the members of this tribunal
will be only people from the judiciary in India without holding any specialization
in taxation law? As a Member of the Standing Committee on Finance, I have just
found that it is not in the High Court, it is actually in the other Tribunals
of Customs and Income-tax where there are a very large number of cases which
are pending. I do not agree with the suggestion made here that there could be
additional Benches in every High Court, which could try everything. I do not
agree with that because most of the High Court Judges lack specialization in
such topics involving income-tax law or customs law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<strong>SHRI P. C. THOMAS:</strong> I would urge upon the Minister to take into
consideration the recommendation and suggestions which have been forwarded by
the Standing Committee. The other aspect of the Bill is that normally in all
these cases, the delay is occurred with respect to the constitution of the Tribunals
and implementation thereof. I would like to say that the implementation should
not be delayed in this regard. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE
MINISTER OF LAW & JUSTICE, SHRI H. R. BHARDWAJ</strong> in his reply stated:-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• This National Tax Tribunal has primarily to deal with the appeals
that arise out of the two Tribunals already set up – one under the jurisdiction
of the Finance Ministry, that is, on the Customs and Excise and Service Tax
and the other is under the jurisdiction of my Ministry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• A very senior Member of this House – raised a very valid point.
He said that the Standing Committee wanted that instead of having this Bill,
we should straightaway constitute Special Benches to hear tax matters. Having
worked as the Law Minster for more than three times in this country, I know
that there is dearth of tax specialists. My experience is that mostly the
lawyers practicing on civil side come to the Bench and they lack that expert
knowledge on tax matters.</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• The House will appreciate that except in one or two cases, I have
written letters after letters to High Courts asking them to constitute Special
Benches for tax matters. But they have said they do not have expert judges
and they can provide judges out of the judges available with them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• The NDA Government went into this issue and they wisely brought this
Bill by saying that in the matter of tax, they would like to have expert people
to deal with appeals also. We have carried forward this Bill. We are applying
our mind fully as this provision is necessary in the interest of the revenue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• We are giving more autonomy and independence to this Tribunal because
we are not associating the Government, that is, the Finance Ministry. The
Finance Ministry is interested in revenue. Their view is not independent and
they are an interested party. So, this Tribunal will be exclusively under
the domain of an independent Ministry, namely, the Law Ministry, and that
aspires more confidence of the litigants.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• There is always a pressure from the Finance Ministry to recover more
and more, but here, we do not have any interest. The Government revenues must
come and the clients must get independent justice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• The quality of justice cannot be diluted whatever consideration may
be. So, this will be a most independent Tribunal and a Division Bench is provided
here.</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• So far as selection is concerned, let me say that our selection process
is foolproof. We want that selection is made quick and good people are selected.
We have kept the component of judicial consultation at a very high level.
So, there should be no apprehension in anybody’s mind about the quality</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• The Standing Committee did recommend, <strong>to consider Chief Commissioners.
There is a consensus opinion that they are almost executive members of the
Finance Ministry. They are considered as Income Tax Commissioners. If they
are selected there, then we will elevate them in the highest tribunal which
is equivalent to almost the High Court.</strong> Therefore, if we have differed
with the Standing Committee’s recommendation, we have done so in the
interest of the institution. This is the recommendation we have not agreed
to.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• On the issue of age, I have submitted that we cannot really keep the
age less than 68 because Supreme Court judges would not come. He can be re-appointed
until the age of 68. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
• A question was asked about the total pendency in the High Courts.
There are about 41471 cases which are pending in different High Courts. They
will be transferred to these tribunals.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
There seems to be unanimous opinion that the IRS should have found a prominent
place in the NTT and every IRS officer that <strong>DDT</strong> spoke to agreed
with this view. “It is ridiculous that to decide tax matters you have
to be away from tax administration for at least seven years”, said a senior
officer. The hopes of Chief Commissioners and Board members to join the NTT
are nipped in the bud. But may be seeing the quality of orders passed by the
senior departmental officers, the Finance Minister and the Law minister have
taken a conscious decision that it is better to keep them out of the National
Tribunal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
for many long years there is no chance of a customs and Central Excise officer
ever making it to the NTT. As of now there is only one technical member in the
CESTAT with 7 years experience and none of the members have seven years before
they retire. So it is assured that for almost the next decade, no officer from
the department can reach the NTT.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<font color="#006600"><strong>Nokia SEZ notified</strong></font></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The Government
has notified the Nokia Telecom SEZ in Sriperumbudur in the State of Tamil Nadu.
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2005/cnt05_107.htm">NOTIFICATION
NO. 107/2005-CUSTOMS (N.T.) Dated 7th December, 2005</a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<font color="#006600"><strong>Emergency in Visakhapatnam? Press gag withdrawn</strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
Bureaucratic arrogance knows no bounds. The Vizag District Collector who is
embroiled in a land scam did what any autocrat would love to. He issued a diktat
that press reports against IAS and IPS officers should be published only after
clearance from a screening committee. The Collector believes he has the power
to control the press under Section 144 of the Cr.PC. Fortunately the Collector
who would have been a very successful officer had he been in the IAS in 1975,
did not get much support from his political boss the Chief Minister. Embarrassed
by the episode, Chief Minister Y. S. Rajasekhara Reddy intervened and sought
an explanation from District Collector Praveen Prakash. In a statement, Dr.
Reddy said such orders had no place in a democracy. The poor Collector had to
withdraw his orders. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <font color="#FF6666"><strong>Until
Monday with more DDT<br>
<br>
Have a nice Weekend. <br>
<br>
Mail your comments to</strong></font> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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