MARCH 12, 2014

By B N Gururaj, Advocate

FOR nearly over a decade and-a-half we are accustomed to seeing retired Chief Justices or retired puisne Judges of the High Court being appointed as the President of the Hon'ble CESTAT. Prior to about 1999, we have come across atleast a few instances where the President of the CESTAT was one of the judicial members, who was eventually elevated to that post after becoming Vice President or Senior Vice President of the CESTAT. After the practice of appointing Hon'ble Judges of the High Court, none of the members of the CESTAT have become its President. Before proceeding with the subject matter of this article, it would be relevant to notice the statutory provisions governing this matter.

The CESTAT, earlier known as "Customs, Excise and Gold Control Appellate Tribunal" was constituted as a Statutory Appellate Tribunal under Section 129(1) of the Customs Act, 1962. Sub section (2) and (2A) define the qualifications of Judicial Members and Technical members. Sub section (3) is interesting. It empowers the Central Government to appoint as President of the CESTAT, a person who is or has been a Judge of a High Court or one of the members of the Tribunal. Thus, as far as statute law is concerned there is no bar against a Judicial member or a Technical member becoming the President of the CESTAT. Prior to 14.5.2003, there was also a provision for appointing Senior Vice President of the CESTAT. But, after early 1990s, this post fell into disuse and none was appointed or promoted to this post. Eventually, with effect from 14.5.2003, this post was omitted. Thus, now the hierarchy of the CESTAT consists of the Members,either Judicial or Technical, the Vice President and the President.

The CESTAT itself has framed the "CESTAT Members (Recruitment and Conditions of Service) Rules, 1997. Interestingly, these rules have been framed under Article 309 of the Constitution of India. Rule 10 prescribes the qualifications of a person who would be appointed as President of the CESTAT. This rule is in conformity with Section 129(2). However, it is further added that a person appointed as President of the CESTAT be it from High Court judiciary or from amongst the members of the CESTAT, would hold the office for either three years or until attaining the age of 65 years whichever is earlier. Thus, from the foregoing statutory provisions, it is clear that there is no bar against appointing or promoting the Hon'ble Members of the CESTAT, as the President.

There is an interesting past as to why the appointment of President from amongst the members of the CESTAT stopped. This development has nothing to do with their ability and competence to hold the post. In R.K. Jain vs. UOI (2002-TIOL-405-SC-CB), the Supreme Court directed the Central Government "to make a sincere effort to appoint a Sitting Judge of the High Court as President of the CESTAT in consultation with the Chief Justice of India and if a Sitting Judge is not available, choice must fall on a Retired Judge as far as possible. This would be consistent with the assurance given by the Finance Department as reflected in the letter of Sri. Chandrachud, the extract is reproduced by our learned brother in his judgment". It can be seen from the extracted portion of the judgment delivered by A.M.Ahamadi, M.M. Punchhi, JJ., it is clear that even this judgment of the Hon'ble Supreme Court does not compel the Central Government to appoint President only from the higher judiciary. Very often, the CESTAT has been left without a Head of the Institution for several months at a stretch without exploring the option of appointing the President from amongst the Members of the CESTAT.

Purely from the view point of management practice, there are many advantages to be derived by appointing home grown persons to the highest post. There are two fold requirements. One, expert knowledge in the laws under which the CESTAT has to decide the appeals; two, ability to competently manage and lead the institution both on judicial and administrative side. The foremost advantage is that a Member who qualifies to become President would have put in atleast over a decade or more service as a Member of the CESTAT. Such a person would have decided literally thousands of appeals and applications. This sheer volume of work discharged would have imparted competence to them as far as knowledge of indirect tax laws and judicial practices are concerned. On account of hearing hundreds of matters every month they would have mastered the laws under which they have to decide and would be familiar with every nook and cranny of the Laws under which they have to decide the appeals and applications. This is single most important advantage when an experienced member of the CESTAT is appointed as President.

The second advantage would be that they would be completely conversant with the administrative aspects of managing and leading the CESTAT, having been responsible for administration of various Zonal Benches where they would have been the senior members, and hence, responsible for the administration also. Thus, they would be ready to function as President of the institution from the first day itself, without there being a learning curve.

There can be one plausible argument against appointment of the President from amongst the members. It is that new blood should be inducted, or people with fresh ideas should be inducted into the institution in order to re-vitalize it. By and large this objection,though might seem valid, would not count for much in leading and managing the judicial institution, which by the very nature of its constitution is governed by complex legal rules. Thus, the scope for innovation is very limited. In any case, if the institution has to undergo dramatic or radical change it can be done only by an amendment to law under which CESTAT has been constituted, and not by way of innovation by Head of the CESTAT. No doubt, there will be ample scope for delivering innovative judgments in the day-to-day judicial functioning of the CESTAT.

Appointment of the President from amongst the members does not mean that there will be no induction of fresh blood at all. On the other hand, whenever a new member is appointed either from the Bar or from the Services, he or she would certainly represent induction of new blood and fresh experience.

At present, no doubt the CESTAT is headed by the President and will remain so until the present incumbent's tenure is completed. Before that happens the Central Government would have to scout for the new candidates to hold this esteemed office. At that time it would be worthwhile to consider competent and qualified persons from amongst the Hon'ble Members of the CESTAT instead of leaving the institution headless for several months. As already discussed earlier, exercise of such option would not be contrary to the judgment of Hon'ble Supreme Court in R.K. Jain's case.

In the judgment delivered by K. Ramaswamy J., at paragraph 72, it has been categorically held that it is expedient to have a Sitting or Retired Senior judge or Retired Chief Justice of High Court to be the President. It is submitted that since majority of the Courts gives the "option to the Central Government to appoint from higher judiciary as far as possible", it is submitted that majority view would prevail and the Central Government still has the option to choose President of the CESTAT, the person of correct qualification from amongst the existing Members of the CESTAT. One hopes fondly that the decision makers who matter will bestow their attention to this matter.