CONSTITUTIONAL LAW II

MADRAS BAR
ASSOCIATION V UNION
OF INDIA (AIR 2015 SC
1571)
SUBMITTED TO: PROF. SUBHAKARA REDDY

SUBMITTED BY: RAMYATA DASS

(17BLB1051).
SUBMITTED ON
/2019
FACTS

 The NATIONAL TAX TRIBUNAL was constituted as a quasi judicial appellate

tribunal and had been vested with the power of adjudicating appeals arising from the
orders of the appellate tribunals constituted under the income tax act, customs act,
1962, and the central excise act, 1944.
 Prior to the enactment of this legislation the appellate jurisdiction was conferred on
the high courts
 Madras bar association along with others filed a petition regarding the issue of NTT’s
power to decide “substantial question of law” before the supreme court.
 It was contended that the legislation violates the basic structure of constitution by
impuning on the power of judicial review vested in the high court
 The petitioners also contended that the NTT in the manner of its constitution
undermines the process of independence and fairness which are sine qua non of an
adjudicatory authority.
 In short, the principle point of argument on behalf of the petitioners was that the
power and functions of the high courts cannot be substituted by an extra judicial body,
such as NTT.

MAIN ISSUE

 WHETHER NATIONAL TAX TRIBUNAL VIOLATES THE BASIC STRUCTURE

OF THE CONSTITUTION

SUB ISSUES

 Legislative power to transfer judicial functions performed by courts to tribunals

 Constitutional validity of sections 5, 6, 7 & 8 of NTT act

OBSERVATION

 LEGISLATIVE POWER TO TRANSFER JUDICIAL FUNCTIONS

PERFORMED BY COURTS TO TRIBUNALS
  On this issue the court observed that, the constitution regulates the manner of
governance in substantially minute detail. And the court has repeatedly held
that an amendment to the provision of the constitution would not be
sustainable if it violated the “basic structure” of the const. and the same would
apply to all other legislations even though the legislation had been enacted by
following the prescribed procedure and was within the domain of enacting
legislature, any infringement to the basic structure would be unacceptable.

 The power of discharging judicial functions which was exercised by the

members of higher judiciary at the time when the constitution came into force
should ordinarily remain with the court, which exercised the said jurisdiction
at the time of promulgation of the new constitution.
 But the judicial power could be allowed to be exercised by an analogous
tribunal with a different name. however, by virtue of the constitutional
convention while constituting the analogous court it will have to be ensured
that the appointment and security of tenure of judges of that court would be
the same as of the court sought to be substituted.

CONSTITUTIONAL VALIDITY OF SECTION 5 OF NTT ACT

 On this issue the court observed that, even though we have expressed the
view, that it is open to parliament to substitute the appellate jurisdiction vested
in the jurisdictional high courts and constitute tribunals/courts to exercise the
said jurisdiction, we are of the view that while vesting jurisdiction in an
alternative court/ tribunal, it is imperative for the legislature to ensure that
redress should be available with the same convenience and expediency as it
was prior to the introduction of the newly created court/ tribunal

 Thus view, the mandate incorporated in section 5(2) of the NTT actto the
effect that the sitting of NTT would ordinarily be conducted in the national
capital territory of delhi, would render the remedy inefficacious and thus
unacceptable by law.

CONSTITUTIONAL VALIDITY OF SECTION 6 OF NTT ACT

  On this issue the court observed that this court has declared the position in this
behalf in L Chandra kumar case (1997) and in Union of India v Madras Bar
Association Case, that technical members could be appointed to the tribunals,
where technical expertise is essential for disposal of matters and not otherwise.
 It has also been held that where adjudicatory process transferred to a tribunal
does not involve any specialised skill, knowledge or expertise, a provision for
the appointment of non judicial member would constitute a clear case of
delusion and encroachment upon the “independence of judiciary” and the “rule
of law”.
 It is difficult to appreciate how accountant members and technical members
would handle complicated questions of law relating to tax matters and also
questions of law on a variety of subjects unconnected to tax in exercise of the
jurisdiction vested with NTT
HELD

 The basic structure of the constitution will stand violated if while enacting
legislation pertaining to tramsfer of judicial power, parliament doesnot ensure
that newly created court or tribunal conforms with the salient characteristics
and standards of the court sought to be substituted.
 Constitutional conventions pertaining to the constitutions styled on the
westminister model will alosi stand breached if while enacting legislation,
pertaining to transfer of judicial power, conventions and salient characteristics
of the court sought to be replaced are npt incorporated in the ribunals.
 Finally, the supreme court held that sections 5,6,7,8,13 of the NTT Act 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, therefroe the entire enactment is
declared unconstitutional.