Madras Bar Association v. Union of India and another
Background
The National Tax Tribunal Act proposed replacing High Courts in appeals involving substantial questions of income-tax, customs and excise law. The Bar Association challenged its constitutional validity, particularly executive control, appointments, qualifications and tenure. Company secretaries separately sought permission to represent parties before the tribunal.
Decision Breakdown
All five judges held the National Tax Tribunal Act unconstitutional. The principal opinion accepted that Parliament could transfer adjudicatory functions, provided the replacement preserved the essential standards and independence of the court replaced. Executive control over benches and postings, unsuitable membership qualifications, government participation in selection and renewable tenure failed that requirement. It also rejected company secretaries' representation claim and invalidated permission for chartered accountants to argue these substantial legal questions; the defective provisions were fundamental, so the whole Act fell. Justice Nariman concurred on the broader ground that transferring this substantial-question-of-law jurisdiction from superior courts to the proposed tribunal itself impermissibly encroached on their constitutional domain.
Lesson Learnt
A taxpayer's dispute with the Government must be decided by an institution with genuine judicial independence and appropriate legal expertise. This proposed tribunal could not replace the High Courts under the invalidated Act; the principal opinion did not prohibit every transfer of judicial work to tribunals.