Tribunalisation of justice - CESTAT - Kal Aaaj Aur Kal!

By Vijay K Kumar, Editor-in-Chief, TIOL

WE expect the Tribunal to provide speedy justice to assessees without harassment while keeping in view the importance of Government revenue. Mrs. Indira Gandhi, Prime Minister of India

I am sure the Tribunal will acquire high reputation in the matter of its decision and that the litigants will look upon it as an independent forum to which they can turn in trust and confidence - Justice YV Chandrachud, Chief Justice of India.

Justice is commonly associated with delay and strangely even setting up of institutions of justice gets delayed. The CEGAT was created by the Finance Act of 1980 but it could start functioning only from October, 1982 more than two and half-years after the conception. Though the Tribunal was inaugurated on 11 th October, 1982, the notification constituting the Tribunal with effect from 11 th October, 1982, was issued on 12 th October, 1982 (Government still maintains the same speed in issuing notifications). The Tribunal came into existence on 11 th October, 1982 albeit without a President. The President was appointed only in late December, 1982 and Tribunal started hearing cases only from mid December, 1982.

The website of the Finance Ministry informs the world that CESTAT is a sub-ordinate/attached office of the Revenue Department. Strange that you establish a high-powered Tribunal with a High Court judge at its head and make it a subordinate office of the Revenue Department which is one of the litigants in every case before the Tribunal. There were strong protests and demands to attach the Tribunal to the Law Ministry and in initial days it was told that after the Revenue Department completes the formalities of initial setting up, the Tribunal would be transferred to the Law Ministry. We have waited for 25 years and so far nothing has happened. The Law Ministry in the beginning seems to have had some major role in the initial days of the Tribunal. At least four of the first Members (Judicial) of the Tribunal were officers of the Law Ministry. Interestingly the Annual Confidential Reports of the Members written by the President are reviewed by the Revenue Secretary! Of course these ACRs have also landed in litigation with members having to approach the CAT and High Court against certain adverse remarks.

Within four years of setting up of the CEGAT, the Government toyed with the idea of establishing another Tribunal called the Customs and Excise Revenues Appellate Tribunal (CERAT). The Customs and Excise Revenues Appellate Tribunal Act, 1986 was duly passed by Parliament. But the Government could not really implement it and finally after remaining in the statute books idly for more than a decade, the Act was repealed. This Tribunal was exclusively to hear classification and valuation matters. Though the Tribunal did not come into existence, the CERAT Act had some unique features. First of all it was an act of Parliament to create the Tribunal - Nobody could say, as they do now, that the Tribunal is the creation of the Customs Act and so cannot go beyond. The CERAT Act excluded the jurisdiction of high courts in matters relating to appeals before the Tribunal. It was because of this provision that the Tribunal got stuck as is happening with the National Tax Tribunal today. The exclusion of High Court jurisdiction was challenged in several High Courts. The CERAT Act had another interesting provision - power to punish for contempt. The Tribunal was vested with the same powers, authority and jurisdiction as a high court in matters relating to contempt.

Though working as an attached office of the Revenue Department, though not having contempt powers, though created under the Customs Act, the Tribunal has established itself as a powerful, independent and highly technical and scholastic judicial forum, thanks to the eminent honourable Members of the Bench and learned members of the bar. All counsels and commissioners are 'learned', if you go by the orders of the Tribunal. Why is it that even when a Commissioner passes an order in total ignorance of the law, he is referred to as the 'learned Commissioner'? Even though the Tribunal is a reasonably fast and economic forum for the litigants, over the years we have accumulated arrears and now the pendency position is alarming if not totally out of control. The Tribunal with its transparent working style has earned the confidence of the tax payers.

Though following the orders of the Tribunal is not a favourite pastime of the Revenue and though it does not have contempt powers, the Tribunal with its wise judges has been able to enforce judicial discipline to a large extent, most often by mild rebuke and sometimes through harsh words of anguish, but never through retributive penal actions.

Just imagine what would have happened if there was no Tribunal? Thousands of cases would be pending with the revisionary authorities of the Revenue Department and then the High Court would have been clogged with writ petitions. There would be no precedential case law and the Revision authorities would be passing contradictory orders on the same issue with impunity. There would have been utter chaos.

The future:

The status of the Tribunal as an appendage of the Revenue Department should be immediately rectified, perhaps by an Act of parliament on the lines of the repealed CERAT Act of 1986. The Tribunal should have power to punish for contempt - that would make its orders more implementable. The department should take the Tribunal more seriously and refrain from filing frivolous appeals and further appeals from Tribunal's orders. The Tribunal, especially the members, should have more facilities like vehicles, secretarial assistance at home, etc,. The Tribunal should make better use of the modern electronic facilities like online filing of applications, notices by e mail and use of computers including laptops by both the bench and the bar, especially in tracking case law. The Revenue department should strengthen the institution of 'Departmental representatives' and provide them more facilities ... and well, the wish list will go on, but this is greetings time.

The Tribunal has grown into a great institution commanding respect and authority, by sheer quality and because of its analytical judgements, has made the work easier for the High Courts and Supreme Court. The expertise and highly specialised knowledge on complex laws that the members have acquired through their years of experience in the Tribunal should not go waste. This enormous repository of knowledge has to be used in the High Courts and Supreme Court. Members of the Tribunal should be elevated to the High Court and from there to the Supreme Court and this should apply for both judicial and technical members. This would provide to the High Courts, the much required expert judges in tax matters. This is not without precedent - a Law Secretary who had never argued a case in a court had been appointed as a High Court judge.

The hopes and expectations expressed by the Prime Minister and Chief justice twenty five years ago had been fully realised.

Twenty five years ago, Justice Chandrachud said, I am sure the Tribunal will acquire high reputation in the matter of its decision and that the litigants will look upon it as an independent forum to which they can turn in trust and confidence

Now, twenty five years later, we can say with pride, the Tribunal has fully lived up to your expectations.