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Tribunals function as a parallel mechanism to the traditional court system. Tribunals were established for two main reasons - allowing for specialised subject knowledge in disputes on technical matters and reducing the burden on the court system. In India, some tribunals are at the level of subordinate courts with appeals lying with the High Court, while some others are at the level of High Courts with appeals lying with the Supreme Court. In 1986, the Supreme Court ruled that Parliament may create an alternative to High Courts provided that they have the same efficacy as the High Courts. For an overview of the tribunal system in India, see our note here.
In April 2021, the central government promulgated an Ordinance, which specified provisions related to the composition of the search-cum-selection committees for the selection of members of 15 Tribunals, and the term of office for members. Further, it empowered the central government to notify qualifications and other terms and conditions of service (such as salaries) for the Chairperson and members of these tribunals. In July 2021, the Supreme Court struck down certain provisions of the Ordinance (such as the provision specifying a four-year term for members) stating that these impinged on the independence of the judiciary from the government. In several earlier judgements, the Supreme Court has laid out guidelines for the composition of Tribunals and service conditions to ensure that these Tribunals have the same level of independence from the Executive as the High Courts they replace.
However, Parliament passed the Tribunals Reforms Bill, 2021 in August 2021, which is almost identical to the April Ordinance and includes the provisions which had been struck down. This Act has been challenged in the Supreme Court. For a PRS analysis of the Bill, please see here.
On 16th September 2021, the central government notified The Tribunal (Conditions of Service) Rules, 2021 under the Tribunals Reforms Act, 2021. A couple of the provisions under these Rules may contravene principles laid out by the Supreme Court:
Appointment of the Administrative Member of the Central Administrative Tribunal as the Chairman
In case of the Central Administrative Tribunal (CAT), the Rules specify that a person with at least three years of experience as the Judicial Member or Administrative Member may be appointed as the Chairman. This may violate the principles laid down by the past Supreme Court judgements.
The CAT supplants High Courts. In 1986, the Supreme Court stated that if an administrative tribunal supplants the High Courts, the office of the Chairman of the tribunal should be equated with that of the Chief Justice of the High Court. Therefore, the Chairman of the tribunal must be a current or former High Court Judge. Further, in 2019, the Supreme Court stated – “the knowledge, training, and experience of members or presiding officers of a tribunal must mirror, as far as possible, that of the Court it seeks to substitute”.
The Administrative Member of the CAT may be a person who has been an Additional Secretary to the central government or a central government officer with pay at least that of the Additional Secretary. Hence, the Administrative Member may not have the required judicial experience for appointment as the Chairman of CAT.
Leave Sanctioning Authority
The Rules specify that the central government will be the leave sanctioning authority for the Chairperson of tribunals, and Members (in case of absence of the Chairperson). In 2014, the Supreme Court specified that the central government (Executive) should not have any administrative involvement with the members of the tribunal as it may influence the independence and fairness of the tribunal members. In addition, it had observed that the Executive may be a litigant party and its involvement in administrative matters of tribunals may influence the fairness of the adjudication process. In judgements in 1997 and 2014, the Supreme Court recommended that the administration of all Tribunals should be under a nodal ministry such as the Law Ministry, and not the respective administrative ministry. In 2020, it recommended setting up of a National Tribunals Commission to supervise appointments and administration of Tribunals. The Rules are not in consonance with these recommendations.
Yesterday, the government circulated certain official amendments to the Constitution (122nd Amendment) Bill, 2014 on GST. The Bill is currently pending in Rajya Sabha. The Bill was introduced and passed in Lok Sabha in May 2015. It was then referred to a Select Committee of Rajya Sabha which submitted its report in July 2015. With the Bill listed for passage this week, we explain key provisions in the Bill, and the amendments proposed. What is the GST? Currently, indirect taxes are imposed on goods and services. These include excise duty, sales tax, service tax, octroi, customs duty etc. Some of these taxes are levied by the centre and some by the states. For taxes imposed by states, the tax rates may vary across different states. Also, goods and services are taxed differently. The Goods and Services Tax (GST) is a value added tax levied across goods and services at the point of consumption. The idea of a GST regime is to subsume most indirect taxes under a single taxation regime. This is expected to help broaden the tax base, increase tax compliance, and reduce economic distortions caused by inter-state variations in taxes. What does the 2014 Bill on GST do? The 2014 Bill amends the Constitution to give concurrent powers to Parliament and state legislatures to levy a Goods and Services tax (GST). This implies that the centre will levy a central GST (CGST), while states will be permitted to levy a state GST (SGST). For goods and services that pass through several states, or imports, the centre will levy another tax, the Integrated GST (IGST). Alcohol for human consumption has been kept out of the purview of GST. Further, GST will be levied on 5 types of petroleum products at a later date, to be decided by the GST Council. The Council is a body comprising of Finance Ministers of the centre and all states (including Delhi and Puducherry). This body will make recommendations in relation to the implementation of GST, including the rates, principles of levy, etc. The Council is also to decide the modalities for resolution of disputes that arise out of its recommendations. States may be given compensation for any revenue losses they may face from the introduction of the GST regime. Such compensation may be provided for a period of up to five years. Further, the centre may levy an additional tax, up to 1%, in the course of interstate trade. The revenues from the levy of this tax will be given to the state from where the good originates. Expert bodies like the Select Committee and the Arvind Subramanian Committee have observed that this provision could lead to cascading of taxes (as tax on tax will be levied).[i] It also distorts the creation of a national market, as a product made in one state and sold in another would be more expensive than one made and sold within the same state. What are the key changes proposed by the 2016 amendments? The amendments propose three key changes to the 2014 Bill. They relate to (i) additional tax up to 1%; (ii) compensation to states; and (iii) dispute resolution by the GST Council.
These amendments will be taken up for discussion with the Bill in Rajya Sabha this week. The Bill requires a special majority for its passage as it is a Constitution Amendment Bill (that is at least 50% majority of the total membership in the House, and 2/3rds majority of all members present and voting). If the Bill is passed with amendments, it will have to be sent back to Lok Sabha for consideration and passage. After its passage in Parliament, at least 50% state legislatures will have to pass resolutions to ratify the Bill. Once the constitutional framework is in place, the centre will have to pass simple laws to levy CGST and IGST. Similarly, all states will have to pass a simple law on SGST. These laws will specify the rates of the GST to be levied, the goods and services that will be included, the threshold of the turnover of businesses to be included, etc. Note that the Arvind Subramanian Committee, set up by the Finance Ministry, recommended the rates of GST that may be levied. The table below details the bands of rates proposed.
| Table 1: Rates of GST recommended by Expert Committee headed by Arvind Subramanian | ||
| Type of rate | Rate | Details |
| Revenue Neutral Rate | 15% | Single rate which maintains revenue at current levels. |
| Standard Rate | 17-18% | Too be applied to most goods and services |
| Lower rates | 12% | To be applied to certain goods consumed by the poor |
| Demerit rate | 40% | To be applied on luxury cars, aerated beverages, paan masala, and tobacco |
| Source: Arvind Subramanian Committee Report (2015) | ||
Several other measures related to the back end infrastructure for registration and reporting of GST, administrative officials related to GST, etc. will also have to be put in place, before GST can be rolled out. [For further details on the full list of amendments, please see here. For other details on the GST Bill, please see here.]
