The National Tax Tribunal Act came into force on 21st December, 2005 by publication in the official gazette for the purpose of resolving disputes pertaining to direct taxes. The act empowered the National Tax Tribunal (herein after mentioned as NTT) to decide upon the matters relating to imposition, evaluation, collection and enforcement of taxes along with fixation of rates of duties on customs and central excise and also valuation of goods for calculating such duties in accordance with Article 323B of the Constitution of India.
The Chairperson of the NTT shall be a person who has been a judge of the Supreme Court or the Chief Justice of any High Court. The benches NTT shall sit at any place in the territory of National Capital city of Delhi. The Chairperson of NTT is entitled to hold office for tenure of five years and is subject to re-appointment.
The NTT may entertain appeal from orders passed by the Income Tax Appellate Tribunal and Custom, Excise and Service Tax Appellate Tribunals. An aggrieved party is entitled to appeal to the NTT within 120 days from the date of receipt of the order passed by the Income Tax Appellate Tribunal or Custom, Excise and Service Tax Appellate Tribunals along with the payment of prescribed fees. The NTT may entertain appeals within expiry of additional 60 days (after expiry of 120 days) if there is a sufficient cause to believe the con-donation of delay.
The NTT is vested with wide powers and is not bound to follow the procedure laid down in the Civil Procedure Code (CPC). The NTT can lay down its own procedure as it deems fit to adjudicate matters. The orders passed by the NTT are binding and final. The proceedings of NTT are considered as judicial proceedings and no civil court is entitled to interfere in the matters which are in the jurisdiction of NTT. The NTT enjoys an absolute jurisdiction for adjudication of matters. In case of difference of opinion by the members, the members shall refer the case to the chairperson and the same shall be decided by the majority. The chairperson may constitute a special bench of five members where a question of law requires reconsideration.
In case of contempt of court, the NTT is empowered to punish the contempt in the same manner as punished by the High Court. The matters and proceedings including appeals that involves disputes pertaining to direct and indirect taxes pending before the High Court shall stand transferred to the NTT immediately from the date specified by the Central Government. Any party, including any government body, who is aggrieved with the decision of the NTT may file an appeal before the Supreme Court of India. Such an appeal must be made within sixty days (60) of the communication of such order passed by the NTT.
The overall review of the NTT Act,2005 is to rectify and regulate issues on direct taxes, custom duties and central excise. The NTT is a quasi-judicial authority, and is envisaged to function same as National Green Tribunal in the taxation field.
Recently, the Madras Bar Association challenged the constitutionality of the NTT Act, 2005 and filed a petition before the Hon’ble Supreme Court of India to scrap the Act on the grounds of being unconstitutional. The Act has provided excessive executive control to the members of the Tribunal in respect of their appointment and also the proceedings. The Petitioners, Madras Bar Association challenged the extensive control in the hands of the quasi-judicial authority like NTT to decide upon the appeals involving substantial question of law.
In reply to the Petition, the apex court decided to scrap the entire act as the pith and substance of the Act itself was found to be unconstitutional. The Supreme Court in its order dated 25th September, 2014 directed to quash the said Act on the grounds that if such extensive judicial control is transferred to the tribunal, it would affect the provisions of the constitution and judicial independence. The Apex Court also observed that the executives in such tribunals, especially the retired judicial bureaucrats have uppermost powers than the judicial members. Such executive control will suppress the judiciary affecting the equality and law of justice.