In the year 2017 Prime Minister of India announced the news of new tax laws, Goods and Service Tax (GST). The idea was more criticised. The research paper main focus is National Tax Tribunal under National Tax Tribunal Act, 2005. The act is being repealed and struck down by Supreme Court in Madras Bar Association v Union of India and Anr. The research question in this paper is whether india needs a separate forum like NTT to resolve Tax matters or not. And the step taken by Supreme Court to repeal and Struck down the Act itself was a valid move or not. Whether any other solution was there instead of striking out.

Introduction:
In the year 2017 Prime Minister of India announced the news of new tax laws, Goods and Service Tax (GST). The whole nation was in shock. Few praising the new move taken by government whereas few still criticising it. In order to avoid the multiple taxes, the government brought this new system. It is levied on the supply of goods and services, and it is a single domestic indirect tax law for the entire country.[1] The tax system is administered by the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC), which are part of the Ministry of Finance.[2]

The tax system adopted by India is reprimanded a lot. The reason behind this is its nature. People find it more multifaceted, uncertainty, and system changes very often. The government did take measures to overcome the disadvantages. However, these efforts have been criticized for not addressing the root causes of the problem, such as the lack of pre-filing support for taxpayers and the over-reliance on litigation as a means of dispute resolution.[3]

The National Tax Tribunal (NTT) was established under the National Tax Act, 2005 (NTA) with the aim of providing a specialized forum for adjudicating tax disputes in India[4]. The NTT was envisioned to streamline the process of resolving tax-related issues by replacing the existing system of appeals to the High Courts and the Supreme Court with a dedicated tribunal focused on tax matters.[5] The NTT was designed to hear appeals against orders of the Income Tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal, with appeals from the NTT to be filed before the Supreme Court.[6] It intended to reduce the burden on the High Court from taxation cases. The tax cases required the speed resolution as well.

The NTT was granted the power to regulate its own procedures and was authorized to hear appeals against orders of the Income Tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal.[7] However, the National Tax Tribunal Act, 2005, was declared unconstitutional by the Supreme Court of India in 2014, primarily due to concerns related to the separation of powers, judicial review, and the qualifications of tribunal members to handle complex legal matters.[8] The National Tax Tribunal (NTT) had jurisdiction over adjudicating disputes related to the levy, assessment, collection, and enforcement of taxes in India.[9] It was replaced by Finance Act 2017.[10]

Sr. No.	Name of the Literature	Nature of Literature	Review	Research Gap	Intended Research
	The National Tax Tribunal Act, 2005	Statue	The ideology behind that act was good but the powers and composition were a bit more authoritative.	Before making the statue the law makers should have known the consequences of taking away the power to review from High Court.	Instead of giving powers it could have been set up as a normal forum which will be entertaining only tax matters. And the members appointed will be those who are professional in this field.
	Supreme Court Correctly Holds National Tax Tribunal Unconstitutional but Should Ordinary Law Be Tested against Basic Structure and Constitutional Convention	Blog	It was a great blog. It provided all the reasons and information needed.	N/A	N/A
	The need for a National Tax Tribunal: Reviewing the National Tax Tribunal Act, 2005	Article	The language used was a bit tricky otherwise a great article to clear basics.	The article as such did not have any gap in research but could have used more illustration and example to explain the concept.	N/A
	Madras Bar Association v. Union of India and Anr.	Case	Instead of Striking and repealing the Act Supreme Court could have amended the sections.	N/A	N/A
	Case Analysis of Madras Bar Association v. Union of India and Anr. By Disha Gupta Writ Petition No. 1072 of 2013	Research Paper	It has explained the case very nicely and in detail.	No research Gap	N/A

Research Methodology:
Research Methodology used in this research paper is combination of Doctrinal Analysis and Case Analysis. This Doctrine permits to not only allows to know the efficiency and effectiveness of the Act but also the functioning of tribunals. The paper mentions the composition, qualification of members and powers of NTT given under the NTTA. The Case Analysis method was chosen because the case justifies the reasoning given behind repealing of the act. And after analysis personal opinion is also being given in the form of conlusion.

About National Tax Tribunal Act 2005:
As the heading itself says that the act came in 2005. The purpose for making this law was to provide a more suitable and effective forum to resolve complicated tax disputes. Apart from these, the already burdened High Court can take a relief from attending the tax matters. This not only helped to resolve the disputes more quickly but also ensured that High Court can focus on more critical and crucial disputes.

Structure established:
Composition of National Tax Tribunal: The National Tax Tribunal shall consist of a Chairperson and such number of Members as the Central Government deems fit, to be appointed by that Government, by notification in the Official Gazette.[11]

This section of the act states that the Chairperson and members of Central Government shall be appointed as members of tribunal after getting approved by Central Government. However, there is no mention of judicial members being there as a member. In other tribunals judicial member are the part of their requirement of that tribunal. So, the logical conclusion from this provision is that judges are not required on the bench in the NTT.[12]

Qualification Required:
Qualifications for appointment of Chairperson and other Members:

1. The Chairperson of the National Tax Tribunal shall be a person who has been a Judge of the Supreme Court or the Chief Justice of a High Court.
2. A person shall not be qualified for appointment as Member unless he:
   1. is, or has been, or is eligible to be, a Judge of a High Court; or
   2. is, or has been, a Member of the Income-tax Appellate Tribunal or of the Customs, Excise and Service Tax Appellate Tribunal for at least ¹[five years].[13]

The section simply states the basic obligation for a person to become the member of the tribunal. As per the section chairperson of NTT should be a Judge of Supreme Court or Chief Justice of High Court. He will qualify as member of Tribunal of he is, or was or is illegible to be a judge of High Court or he is or was a member of ITAT or CESTAT for minimum 5 years.

This brings in a problem as a Chartered Accountant who has practiced accountancy for a minimum of ten years or has been a registered accountant for a minimum of ten years meets the eligibility requirement to become an Accountant Member for the ITAT.[14] Similarly, a person who has been a member of the Indian Customs and Central Excise Service and has held the post of Collector of Customs or Central Excise or equivalent or a higher post for a minimum of three years meets the eligibility requirement to become a Technical Member for the CESTAT. [15]

Powers of National Tax Tribunal:

1. The National Tax Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice.
2. Subject to the other provisions of this Act, the National Tax Tribunal shall have powers to regulate its own procedure.
3. The National Tax Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:
   1. requiring the discovery and production of books of account and other documents;
   2. subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or a copy of such record or document, from any office;
   3. dismissing an appeal for default or deciding it, ex parte;
   4. setting aside any order of dismissal of any appeal for default or any order passed by it, ex parte;
   5. rectifying any mistake or error apparent on the face of record; and
   6. any other matter which may be prescribed.
4. All proceedings before the National Tax Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code (45 of 1860) and the National Tax Tribunal shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

Section 16 of the Act lays down the powers of NTT. It had the same powers as a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters:[16]

The above section states what all powers does NTT have. It adjudicates any matter regarding direct taxes imposition, collecting, enforcing and evaluating will be decided by NTT. It also has power to decide the duties and customs rate which will be applicable on goods. And those goods will be valued by NTT for customs and central excise duties.[18] The order decided or passed by this tribunal then that order will be final. The tribunal also has powers to decide a matter by setting a special bench. If there any cases for direct taxes, then they all can be transferred to the tribunal. It can also any interim orders as and when required. And if the parties are not satisfied by the order passed by the tribunal then they may file its appeal to Supreme Court.

Case Analysis:
The National Tax Act 2005 was being repealed in Madras Bar Association v Union of India and Anr.[19] This case is not like other cases. This case is combined one of other cases. The main issue in the case of Madras Bar Association vs Union of India revolved around the Constitutional validity of the National Tax Tribunal Act, 2005 and the Constitution (Forty-Second Amendment) Act, 1976.[20] Apart from independence of judiciary and requirement of judicial review of law being the grounds the Act was also criticized for allowing tribunals to decide questions of law, which hitherto were decided by the superior constitutional courts, and for taking away the power of judicial review of the High Court under Articles 226 and 227.[21]

The judgement of the case was given by a 5-judge bench. the court considered previous judgements also and upheld some of the issues while pointed put certain defects in provisions and ordered to correct the defects so that the same could be made effective.[22] The court held that, the judgement was given as follows:

• The apex court upheld the constitutional validity of the NCLT and the NCLAT and that the issue could not be reopened again. Although the national tax tribunal had been held unconstitutional in the interim, the Court Noted That The NTT had been held unconstitutional after distinguishing the 2010 judgment.[23]
   
• On the second issue, the court had held that only those holding the post of secretaries/ additional secretaries and having technical expertise could be appointed to the post. it had struck down the parts of the provision which were inconsistent with the law. this provision stated that joint secretaries with certain experience were eligible for appointment as technical members. section 409 (3) of the companies act, 2013 states that joint secretaries with certain experience are eligible for appointment as technical members. The Supreme Court reiterated that this was a complete dilution of the principles that the court had zealously tried to protect in 2010 itself and therefore, struck down section 409(3) (a) and (c).[24]
   
• On the third issue, section 412 of the companies act, 2013 states that the selection committee consists of 2 judicial members and 3 administrative members. The analogous provision in the 1956 act had been discussed in the 2010 judgment wherein the Supreme Court had held that it ought to be a four-member committee (with equal division between the judicial and administrative members) and that the chief justice should have the casting vote. The Supreme Court ruled that the 2010 judgment is binding precedent and should be followed. It therefore struck down section 412(2) and ordered that it be brought in accord with the relevant parts of the 2010 judgement.[25]

Conclusion:
The year 2017 was a roller-coaster for all tax payers. The Government introduced new taxation laws named Goods and Service Tax. It not only removed the previous multiple taxes system but made a one nation one tax. The idea was more criticised then being appreciated. This was because firstly, it was a new system for everyone. Secondly, changing from old regime to new regime was not an easy task for all generation. Thirdly, the working GST site was way more complicated. Filling that return was a night mare for people. On the contrary it did reduce the double taxation cases. And with developing and updating world the country somewhere did need an updated tax system.

National Tax Tribunal under National Tax Tribunal Act, 2005 was not a bad strategy. The idea of having a separate body to resolve tax matters was a thoughtful and well planned step. Through this way not only a special forum would be created but the judges of that forum will have expertise in that particular arena. However, the execution of it was something that needed improvement. Along with these the laws in it which were undermining the basic principle of independent judiciary was also something that law makers should have kept in mind while making the law.

In my opinion, the NTTA being held unconstitutional was not a complete accurate step. Instead of striking out the complete act the court could have thought to amend its powers, composition and judicial methods. By changing or amending few section the act could have survived. It is being replaced by Finance Act 2017. And in High Court a Special bench is being made to entertain GST matters. By the decision of Madras Bar Association v Union of India and Anr. The independence survived but the burden on High Court did increase, leading to a long wait to get resolution for Tax matters.

References:

• Goods and Services Tax (GST) What Is GST in India? Indirect Tax Law Explained (cleartax) accessed 12 April 2024
• Direct Taxes Litigation Management and Alternate Dispute Resolution (National Institute of Public Finance and Policy 2023)
• The National Tax Tribunal Act, 2005 Section 3
• Khaitan, Sanghvi C-S and Shetty S, Supreme Court Strikes down "National Tax Tribunal" as Unconstitutional (Lexology, 1 October 2014) accessed 12 April 2024
• Procedure and Powers of National Tax Tribunal | National Tax Tribunal Act, 2005 | Bare Acts | Law Library | AdvocateKhoj accessed 12 April 2024
• Madras Bar Association v. Union of India & Another 2020 SC 804
• The National Tax Tribunal Act, 2005
• Supreme Court Correctly Holds National Tax Tribunal Unconstitutional but Should Ordinary Law Be Tested against Basic Structure and Constitutional Convention? – The myLaw.Net Blog (30 September 2014) accessed 13 April 2024
• The National Tax Tribunal Act, 2005 Section 4
• Mahaseth H, The Need For A National Tax Tribunal: Reviewing The National Tax Tribunal Act, 2005 [2017] SSRN
• The National Tax Tribunal Act, 2005 Section 6
• The National Tax Tribunal Act, 2005 Section 16
• 2020 SC 804
• Madras Bar Association v. Union of India, (2014) 10 SCC 1 - Legal Vidhiya (5 October 2023) accessed 13 April 2024
• Gupta D, Case Analysis Of Madras Bar Association V. Union Of India, Writ Petition No. 1072 OF 2013 probono
• Murthy LG, Madras Bar Association- NCLT Constitutionality (SpicyIP, 31 May 2015) accessed 13 April 2024

End-Notes:

1. Goods and Services Tax (GST) What Is GST in India? Indirect Tax Law Explained (cleartax) accessed 12 April 2024
2. About Us | Goods and Services Tax Council accessed 12 April 2024
3. Direct Taxes Litigation Management and Alternate Dispute Resolution (National Institute of Public Finance and Policy 2023)
4. The National Tax Tribunal Act, 2005 Section 3
5. Khaitan, Sanghvi C-S and Shetty S, Supreme Court Strikes down "National Tax Tribunal" as Unconstitutional (Lexology, 1 October 2014) accessed 12 April 2024
6. Supra note 5
7. Procedure and Powers of National Tax Tribunal | National Tax Tribunal Act, 2005 | Bare Acts | Law Library | AdvocateKhoj accessed 12 April 2024
8. Madras Bar Association v. Union of India & Another 2020 SC 804
9. The National Tax Tribunal Act, 2005
10. Supreme Court Correctly Holds National Tax Tribunal Unconstitutional but Should Ordinary Law Be Tested against Basic Structure and Constitutional Convention? – The myLaw.Net Blog (30 September 2014) accessed 13 April 2024
11. The National Tax Tribunal Act, 2005 Section 4
12. Mahaseth H, The Need For A National Tax Tribunal: Reviewing The National Tax Tribunal Act, 2005 [2017] SSRN
13. The National Tax Tribunal Act, 2005 Section 6
14. Supra note 12
15. Supra note 12
16. Supra note 7
17. The National Tax Tribunal Act, 2005 Section 16
18. Supra note 9
19. 2020 SC 804
20. Madras Bar Association v. Union of India, (2014) 10 SCC 1 - Legal Vidhiya (5 October 2023) accessed 13 April 2024
21. Supra note 7
22. Gupta D, CASE ANALYSIS OF MADRAS BAR ASSOCIATION V. UNION OF INDIA, WRIT PETITION NO. 1072 OF 2013 probono
23. Murthy LG, Madras Bar Association- NCLT Constitutionality (SpicyIP, 31 May 2015) accessed 13 April 2024
24. Supra note 22
25. Supra note 22

Written By: Mitali Patel