By TIOL News Service

NEW DELHI, SEPT 25, 2014: IN a major setback to the NDA Government, the Supreme Court of India has declared the National Tax Tribunal Act as uncontitutional.

In response to the petition by the Madras Bar Association which alleged that the NTT Act piloted by the NDA-1 and passed by the UPA Govt impinged on the power of 'Judicial Review' vested in the High Court.

Similar petitions were filed by many others and the Apex Court finally ordered for transfer of all cases.

After marathon hearing, the Constitution Bench has held that,

++ The Parliament has the power to enact legislation, and to vest adjudicatory functions, earlier vested in the High Court, with an alternative court/tribunal. Exercise of such power by the Parliament would not per se violate the 'basic structure' of the Constitution.

++ Recognized constitutional conventions pertaining to the Westminster model, do not debar the legislating authority from enacting legislation to vest adjudicatory functions, earlier vested in a superior court, with an alternative court/tribunal. Exercise of such power by the Parliament would per se not violate any constitutional convention.

++ The 'basic structure' of the Constitution will stand violated, if while enacting legislation pertaining to transfer of judicial power, Parliament does not ensure, that the newly created court/tribunal, conforms with the salient characteristics and standards, of the court sought to be substituted.

++ Constitutional conventions, pertaining to constitutions styled on the Westminster model, will also stand breached, if while enacting legislation, pertaining to transfer of judicial power, conventions and salient characteristics of the court sought to be replaced, are not incorporated in the court/tribunal sought to be created.

++ The prayer made in Writ Petition (C) No.621 of 2007 is declined. Company Secretaries are held ineligible, for representing a party to an appeal before the NTT.

++ Examined on the touchstone of conclusions (iii) and (iv) above, Sections 5, 6, 7, 8 and 13 of the NTT Act (to the extent indicated hereinabove), are held to be unconstitutional.

++ Since the aforesaid provisions, constitute the edifice of the NTT Act, and without these provisions the remaining provisions are rendered ineffective and inconsequential, the entire enactment is declared unconstitutional.