Calcutta HC Stays Tax Tribunal Notification

Kolkata, Nov 6: | Updated: Nov 7 2003, 05:30am hrs
The Union Governments move to set up a National Tax Tribunal (NTT) was stayed by a Calcutta high court judge on Thursday. Justice Kalyan Jyoti Sengupta granted an interim injunction restraining the government from issuing any notification relating to the National Tax Tribunal Ordinance 2003 till November 11, when the matter will be heard again.

The stay was granted on an application moved by an advocate.

The Cabinet had cleared the NTT on August 23, and the Ordinance was issued on October 16. The NTT is to hear all appeals against orders of income-tax appellate tribunals lying before the various high courts.

Appearing for the petitioner, Mr Debi Prosad Pal, a senior advocate and former Union minister of state, contended that there was no need to create a tax tribunal that will take away the power and jurisdiction of the high courts in all revenue matters income tax, gift tax, customs, central excise and service tax.

Mr Pal, who is also a former high court judge, argued that the creation of a NTT will erode the independence of the judiciary.

The notification was to be issued under Section 3 of the Ordinance for appointing its chairperson and members, and also specifying its powers and jurisdiction.

According to Mr Narayan Jain, a tax expert here, the Ordinance contained many new provisions with far-reaching effect on the delivery of justice.

The NTT will take up only those appeals in which substantial question of law is involved, as the high court also does. The bench of the NTT will consist of a judicial member and a technical member.

The technical member may be a chartered accountant or any person who has served for one year as chairman or member of the Central Board of Direct Taxes or Central Board of Excise & Customs, Mr Jain told FE. Mr Jain pointed out that chartered accountants also get the right to represent cases before the NTT, although the Advocates Act of 1961 reserves this right for advocates.

In fact, the Bar Council of West Bengal has called an emergency meeting on November 12 to discuss the issue. The NTT also differs from the high court procedure in that the petitioner has to pay upfront at least 25 per cent of the tax and duties payable before moving the tribunal.

This does not happen in cases before the high court.

However, the governments argument for creating the NTT is that it will reduce the burden on the high courts. According to it, there are 3.15 lakh such appeals pending before the various high courts, involving a total revenue of Rs 42,860 crore.