|COURT:||Bombay High Court|
|CORAM:||A. S. Oka J, Riyaz I. Chagla J|
|CATCH WORDS:||sales-tax tribunal, VAT Tribunal|
|COUNSEL:||Nikita Badeka, R. V. Desai|
|DATE:||September 29, 2017 (Date of pronouncement)|
|DATE:||December 30, 2017 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|Sales-tax/VAT Tribunal: (i) Only legally qualified, judicially trained and experienced persons can be appointed Members. A Chartered Accountant or Commissioner cannot be appointed unless they have expertise in the subject. (ii) The Selection Committee should be headed by either a sitting Judge or a retired Judge of the High Court. (iii) It is the constitutional obligation of the State to provide proper infrastructure to the Courts, Tribunals and Judicial Officers. Financial constraint on the part of the Government is no ground to deny the adequate infrastructure to the Courts and Tribunal. (iv) For complete transparency, the Tribunal will have to ensure that its records are digitized and all orders, short or long, are uploaded on a dedicated website|
(i) The Apex Court observed that the participation by persons from other specified fields would be a positive consideration for achievement of the object of the said Act of 2005. However, the Apex Court observed that the requirement of a judicial mind for manning the judicial Tribunal is a well accepted discipline with all major international jurisdictions which hardly has any exception. The Apex Court ultimately held the provisions of subsection 5 of Section 12 and subsection 5 of Section 15 to be constitutionally valid. By reading into these provisions, it was held that the requirement of appointing legally qualified, judicially trained and experienced persons would certainly manifest in effective serving of the ends of justice as well as better administration of justice.
(ii) Unless we adopt the similar approach, in the facts of the present case, the relevant provisions of the VAT Rules will attract the vice of unconstitutionality. Therefore, when appointment of Administrative Member is made of the officer not below the rank of Joint Commissioner of Sales Tax or the one which is covered by clauses (e) and (f) of subrule 1 of Rule 6, it will be necessary that the persons concerned are legally qualified and judicially trained. In case of the Joint Commissioners of Sales Tax, it is necessary that they have a judicially trained mind in the sense that they have a long experience of dealing with the quasi judicial proceedings involving the adjudication of disputes. The Tribunal has to deal with the legal issues and therefore, these requirements will have to be read into the Rules. Apart from the fact that if the said requirements are not read into the Rules, the Rules will expose itself to the vice of unconstitutionality, such requirements are necessary for the effective functioning of the Tribunal and for achieving the object for which the Tribunal has been created by the law.
(iii) We may also note here that the challenge by the Petitioners to the resolution dated 2 June 1973 will have to be upheld. Basically the Government Resolution deals with the appointment of the Deputy Commissioner of Sales Tax as the members of the Tribunal. Now in view of the Rule 6 of VAT Rules, there is no occasion to appoint the Deputy Commissioner of Sales Tax as a Member of the Tribunal.
(iv) As far as clause (c) of the said Government Resolution is concerned, it was criticized by the learned senior counsel appearing for the petitioners on the ground that the members of selection committee may not be equipped to ascertain whether the officers are legally qualified and they have a legal mind or whether they are judicially trained. A submission was sought to be made by the State that the Secretary of the Law and Judiciary Department is a part of the Committee who is under the direct superintendence of this Court being a Judicial Officer. The said submission is factually incorrect. Once a serving District Judge is appointed as the Secretary of the Law and Judiciary Department, the only control which the High Court can exercise over the said officer is of recalling his services to the judiciary. As we have read the aforesaid qualifications into the rules, it is necessary that the Selection Committee must be of such persons who will be able to judge whether the candidates covered by the clauses (d), (e) and (f) of subrule (1) of Rule 6 possess the necessary qualifications. As far as the Chartered Accountant or any other person covered by clause (e) is concerned, though he may be an expert, he may not have judicial experience. But the requirement of possessing the legal qualifications or legally trained mind cannot be dispensed with. For example, a Chartered Accountant or other expert who has wide experience of working as arbitrator can be chosen. It is for this purpose, it is necessary that there should be a proper constitution of the Selection Committee to select the administrative Members. Therefore, it is desirable that the Selection Committee is headed by either a sitting Judge or a retired Judge of this Court. As we are proceeding to quash the Government Resolution dated 2nd June 1973, the State Government will have to reconstitute the Committee for appointing the Members covered by clauses (d), (e) and (f).
(v) As far as the infrastructure to be provided to the Courts and Tribunals in the State is concerned, the same will be governed by the judgment and order dated 5th May 2017 of this Court in Public Interest Litigation No. 156 of 2011 (Mumbai Grahak Panchayat and another v. State of Maharashtra and others) and other connected matters. In paragraph58 of the said decision this Court has made a reference to the judgment and order dated 2nd January 2017 passed by the Apex Court in the case of Imtiyaz Ahmad Vs. State of Uttar Pradesh and others13. In the said order, based on interim recommendations of the National Court Management System Committee (NCMSC), the Apex Court directed that the appointment of adequate numbers of the Judges required in the Courts should be made by creating additional posts and accordingly necessary infrastructure be provided.
(vi) The State Government will have to undertake the scientific study of number of members required for the said Tribunal. While doing so, the State Government will be naturally guided by the law laid down in the case of Imtiyaz Ahmad Vs. State of Uttar Pradesh & Ors. (supra). By appointing a Committee, preferably headed by a retired Judge of this Court, the State Government will have to undertake the said exercise and after considering the recommendations of the Committee, the State Government will have to appoint such number of the additional members who are required to take care of pendency at present and the pendency in the future. Needless to add that the necessary infrastructure will have to be created to enable the additional members to function.
(via) In the said decision of Mumbai Grahak Panchayat (supra), this Court has laid down that it is the constitutional obligation of the State to provide proper infrastructure to the Courts, Tribunals and Judicial Officers. This Court has categorically held that the financial constraints on the part of the Government is no ground to deny the adequate infrastructure to the Courts and Tribunal.
(vii) Therefore, whenever the President of the Tribunal submits requisitions/proposals to the State Government for providing infrastructure such as additional space, additional staff, furniture, computers, printers, servers, etc., the said proposals will have to be decided by the State Government in the light of the law laid down by this Court.
(viii) As directed in the said decision in the case of Mumbai Grahak Panchayat (supra), for bringing about a complete transparency, the Tribunal will have to ensure that its record is digitized and all orders, short or long, are uploaded on a dedicated website. It will be ideal if the President of Tribunal looks into the eCourt Project Phase I and II initiated by the eCommittee of the Apex Court which is being implemented in all civil and criminal Courts in the State. Needless to add that the State Government will provide necessary infrastructure to ensure that the record of the Tribunal is digitized and the aforesaid projects are implemented in substance. We make it clear that it will be open for the learned President of the Tribunal to seek assistance of the High Court team headed by the Central Project Coordinator for implementation of the project of digitization. Till the larger project is implemented, the President will have to ensure that all orders passed by the Tribunal, small or big, are uploaded on the website.
(ix) Considering the aforesaid discussion, we pass the following order:
O R D E R
(i) We accept the statements, made by Shri. Rajendra D. Bhagat, working as the Deputy Secretary (Finance Department) of the Government of Maharashtra, in his affidavit dated 21st August 2017 as the statements and undertakings on behalf of the State Government. In view of the statements made in clause (e) of paragraph 11 of the affidavit, we make it clear that no Member covered by clauses (a), (b) or (c) of subrule (1) of Rule 6 of the VAT Rules shall be appointed without making effective consultation with the High Court of Judicature at Bombay. Needless to add that the effective consultation shall be as per the law laid down in the case of State of Gujarat Vs. Gujarat Revenue Tribunal Bar Association (supra);
(ii) In view of the statements made in the aforesaid affidavit, we clarify that a Bench of two or more Members shall always be headed by a Judicial Member appointed under clauses (a), (b) or (c) of subrule 1 of Rule 6 of the VAT Rules;
(iii) The matters which are required to be decided by the Members sitting singly shall always be placed before a Judicial Member only. In case of emergency, when none of the Judicial Members are available, the matters where an urgent adinterim or interim relief is sought can be placed before the Administrative Member sitting singly;
(iv) As far as selection of the Members covered by clauses (d), (e) and (f) of subrule (1) of Rule 1 of Rule 6 is concerned, the State Government shall constitute a proper Selection Committee preferably headed by a retired Judge of this Court, in the light of observations made in this judgment and order;
(v) The Government Resolution dated 2nd June 1973 is hereby quashed and set aside;
(vi) As far as Members appointed under clauses (d), (e) and (f) of subrule (1) of Rule 6 are concerned, the said Members shall be legally qualified. In the case of Members covered by clause (d) of subrule (1) of Rule 6, in addition to the aforesaid requirement, the State shall also ensure that the Members shall be judicially trained in the sense that they have long experience of dealing with quasijudicial proceedings and/or adjudication proceedings;
(vii) We recommended to the State Government to carry out suitable amendment to the Rules incorporating therein the provisions relating to the maximum tenure of the Members and/or age of retirement/superannuation within a period of six months from today;
(viii) At least six months before the date on which vacancy of President or Member is likely to occur, the State Government shall initiate steps for filing in the vacancy so that the posts do not remain vacant. In case of vacancy arising due to any other reason, the State Government shall ensure that the vacancy is filled in as expeditiously as possible and in any event, within a period of four months from the date on which the vacancy occurs;
(ix) The State Government shall constitute a Committee of Experts to look into the question as to how many Members are required for the Tribunal at present and in future. As stated earlier, the Committee will take into consideration the law laid down by the Apex Court in the case of Imtiyaz Ahmad Vs. State of Uttar Pradesh & Ors. (supra). Such Committee shall be appointed within a period of three months from the date on which this judgment is uploaded. The Committee shall submit a report within a period of six months from the date of its constitution;
(x) Within a period of six months from the date on which the report is submitted, the State Government shall take steps for appointing such additional members as may be recommended by the Committee. Needless to add that the necessary infrastructure will be provided to the additional members appointed accordingly;
(xi) As far as issue of infrastructure to be provided to the Tribunal is concerned, all adinterim and interim directions issued earlier shall continue to bind the respondents. Whenever any requisition is submitted by the President/Members of the Tribunal as regards the infrastructure to be provided to them and to the Tribunal, the State Government will be bound by the law laid down by this Court in the case of Mumbai Grahak Panchayat & Anr. (supra);
(xii) The Tribunal shall take immediate steps to ensure that all the orders passed by the Tribunal are immediately uploaded on the dedicated website;
(xiii) The Tribunal shall consider of adopting project of computerisation and digitization on the lines of ECourt Phase I and ECourt Phase II deviced by eCommittee of the Hon’ble Supreme Court of India. Needless to add that on requisition made by the President of the Tribunal, necessary assistance will be rendered by the team of the High Court of Judicature at Bombay, Central Project Coordinator. If a requisition is made by the President of Tribunal for creating posts of technical staff, the State Government shall take immediate steps for creating necessary technical posts.
(xiv) We must clarify here that what is held by this Court and what is directed by this Court will not affect the validity of appointment of the Members who are already appointed and who are functioning today;
(xv) Rule is partly made absolute in the above terms; (xvi) The Writ Petition is disposed of in the above terms.
(xvii) However, the compliance with the directions issued by this Court will have to be monitored by this Court. We therefore, direct that notwithstanding the disposal of this petition, the petition shall be listed under the caption of “Directions” on 18th January 2018. The State Government shall file an affidavit of compliance on 15th January 2018;
(xviii) It will be appropriate if this petition is placed before the same Division Bench or before the Division Bench to which one of us is a party. We, therefore, direct the Prothonotary and Senior Master to seek appropriate directions from the Hon’ble the Chief Justice in this behalf.