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Jagdish Singh Khehar, J.

The Controversy:

1. All the above cases are being disposed of by this common judgment.

The issue which arises for consideration before us, in the present bunch of cases, pertains to the constitutional validity of the National Tax Tribunal Act, 2005 (hereinafter referred to as, the NTT Act). Simultaneously, the constitutional validity of the Constitution (Forty-second Amendment) Act, 1976 has been assailed, by asserting, that the same violates the basic structure of the Constitution of India (hereinafter referred to as, the Constitution), by impinging on the power of “judicial review” vested in the High Court. In the event of this Court not acceding to the aforementioned prayers, a challenge in the alternative, has been raised to various provisions of the NTT Act, which has led to the constitution of the National Tax Tribunal (hereinafter referred to as, the NTT). The NTT, according to the learned counsel for the petitioners, is styled as a quasi- judicial appellate tribunal. It has been vested with the power of adjudicating appeals arising from orders passed by Appellate Tribunals (constituted under the Income Tax Act, the Customs Act, 1962, and the Central Excise Act, 1944). Hitherto before, the instant jurisdiction was vested with High Courts. The pointed issue canvassed in this behalf is, that High Courts which discharge judicial functions, cannot be substituted by an extra-judicial body. Additionally, it is maintained that the NTT in the manner of its constitution undermines a process of independence and fairness, which are sine qua non of an adjudicatory authority.

The first contention: That the reasons for setting up the NTT, were fallacious and non-existent. Since the foundational basis is untrue, the structure erected thereupon, cannot be accepted as valid and justified. And therefore, the same is liable to be struck down.
The second contention: It is impermissible for the legislature to abrogate/divest the core judicial appellate functions, specially the functions traditionally vested with the High Court. Furthermore, the transfer of such functions to a quasi-judicial authority, devoid of essential ingredients of the superior court, sought to be replaced was constitutionally impermissible, and was liable to be set aside. Besides the appellate jurisdiction, the power of judicial review vested in High Courts under Articles 226 and 227 of the Constitution, has also been negated by the NTT Act. And therefore, the same be set aside. The third contention: Separation of powers, the rule of law, and judicial review, constitute amongst others, the basic structure of the Constitution. Article 323B inserted by the Constitution (Forty-second Amendment) Act, 1976, to the extent it is violative of the above mentioned components of the basic structure of the Constitution, is liable to be declared ultra vires the Constitution.

The third contention:

27. In the course of the submissions advanced by the learned counsel for the petitioners on the third contention, wherein it was sought to be submitted, that “separation of powers”, the “rule of law” and “judicial review” constitute amongst others, the “basic structure” of the Constitution, it was submitted, that Article 323B inserted by the Constitution (Forty-second Amendment) Act, 1976 was violative of the above mentioned components of the basic structure of the Constitution. Article 323B is being extracted hereunder:-

28. While canvassing the aforesaid contention learned counsel for the petitioners pointed out, that the above mentioned Article 323B was introduced by the Constitution (Forty-second Amendment) Act, 1976, which was part of an overall scheme, to drastically curtail the power of “judicial review” vested with the higher judiciary. It was pointed out, that all other objectionable provisions were deleted, and powers earlier vested in superior courts were restored. However, Part XIV A of the Constitution, inserting Articles 323A and 323B was allowed to remain. It was submitted that Articles 323A and 323B, enabled the creation of parallel judiciary under executive control. In order to support his aforestated contention, learned counsel invited the Court’s attention to the expressions “adjudication or trial”, “disputes, complaints or offences”, “transfer of suits or proceedings”, etc. which could be fashioned in a manner different from that which presently prevailed. It was pointed out, that the aforestated mandate contained in Article 323B of the Constitution, was incompatible with the “basic structure” of the Constitution, which mandates “separation of powers”.