The Hindu Business Line : 'Tax Tribunal Bill still has some flaws'

THE National Tax Tribunal Bill, 2005, (enacted by Parliament recently) brought in after major hiccups earlier, to adjudicate on appeals with regard to levy, assessment, collection and enforcement of direct taxes, still carries some flaws, as pointed out by members of the Bar Council and senior tax practitioners.

Experts fear that if these concerns are not addressed upfront by the Government before Presidential assent and notification, a series of litigations in different High Courts may well happen.

Some top tax lawyers ask why have one more tax tribunal instead of arming the High Courts suitably with specialised Tax Benches?

While tax lawyers question the provision to allow non-lawyers to appear before the Tribunal, as it militated against the basic tenets of the Advocates Act (Sections 29, 30 and 33), senior tax practitioners are opposed to the requirement of 25 per cent (of the tax or duty payable) payment of fee upfront before an appeal can be admitted.

On the provision that a party to an appeal other than Government may either appear in person or authorise one or more chartered accountants or legal practitioners or any person duly authorised, Mr Saradendu Biswas, former chairman of Bar Council of West Bengal and President of the All Bengal Tax Bar, told Business Line that in no tribunal in the country (SAT, CAT, West Bengal Taxation Tribunal etc) can a non-advocate appear to present a case, and "the move to allow CAs to appear before the NTT is not acceptable to us, as we question their competence in dealing with matters of pure law."

According to Mr Narayan P. Jain, tax advocate, charging of such a steep fee may give rise to corruption and affect the quality of justice delivered. An assessee, who would normally prefer an appeal before a national tribunal, may be tempted to settle the matter at the ITAT level itself at a much lesser fee, especially if his case involved payment of heavy taxes or duties.

He said the taxes already paid by an asessee should be adjusted against payment of appeal fee of 25 per cent. He felt the provision (Section 15 (4)) of payment of such large fees would be a major impediment to dispensation of justice.

Mr Jain also flayed the given time-frame for filing of appeals, citing that there was no such outer time-limit for Supreme Court Appeals.

Mr K. Shivaram, President, All-India Federation of Tax Practitioners, said a mere 5-year term for a Member of the NTT was not a good idea, as it is not so easy to find competent persons to join such tribunals.

He, however, welcomed the revised norm in the Bill, under which, the chairperson of the NTT shall be someone who has been a judge of the Supreme Court or the Chief Justice of a High Court in India.

He, however, felt that a Chairperson and other Members of the NTT should be appointed by a Collegium, as in the case of appointment of High Court judges, and not by the Central Government on the recommendations of a selection committee, one of whose members would be a Secretary in the Ministry of Finance.