Facts

A letter was sent by the Law Secretary, Ministry of Law and Justice to the President of the Tribunal stating that he was in receipt of  a  written complaint that in a particular case two conflicting orders were passed by the same Bench.      It was stated therein that the Judicial Member passed the ‘first draft order’     in favour of the assessee and signed the same. Subsequently, the Accountant Member passed an order in favour of the  Revenue, which was  signed by  both the members. The President was asked to send a  report on  the same within  ten days. The President asked the two members to give their comments on the same. The members clarified that the first draft of the order was only signed by    the Judicial Member and was not an order of the Tribunal for the purposes of     the Act. It was clarified that pursuant to passing of the draft order, the members discussed the case among themselves and decided that the view taken therein was incorrect. Accordingly, the order deciding the issue in favour of the Department was passed by the Accountant Member and signed by both members. Before these comments could be communicated to the Law Secretary, he wrote another letter    to the President stating therein that if no justification was given to him, adverse inferences will be drawn against the President as well. The Tribunal viewed these letters as interference with its judicial functioning and filed an application before the Supreme Court requesting it to issue a show cause notice of contempt against the Law Secretary.

Issue

What is the domain of Law Secretary’s power over the functioning of the Tribunal?

Views

The Law Secretary argued that since his responsibilities extended to supervision over the functioning of the Tribunal, he was within his rights to ask for a  report from the President. The Tribunal, on the other hand, argued that the Law Secretary’s supervision over the Tribunal is limited to matters of administrative nature and he cannot be permitted to influence the judicial decisions of the members.

Held

The first draft prepared by the Judicial Member was not an ‘order’ since it was     not signed by both the members. There was nothing wrong in the members discussing the matter and finally passing an order contrary to the first draft prepared by the Judicial Member. The supervision and control of the Law Secretary over the Tribunal is merely administrative in nature. The letters written by the Law Secretary in the present case sought to interfere with the judicial power of the members of the Tribunal, which is not permitted in law. The conduct of the Law Secretary in the present case, interfering with the judicial functioning of the Tribunal amounted to a gross contempt of Court. His apology before the Court was not accepted and a fine of Rs. 2000 was imposed for this contempt. (Contempt Petition No. 287 of 1998, Transfer Case No. 6 of 1997 dt. 17-11-1998)

Editorial: The judgment is relevant, not just because it protects the judicial independence of the Tribunal from the Government, but also for the reason that the Supreme Court recognised that the Tribunal is a  Court and held the  Law Secretary to be in contempt. In a subsequent judgment in the case of Ajay Gandhi v. B. Singh (2004) 265 ITR 451 (SC), the Court again recognised that the Tribunal has the trappings of a Court.

“Gentleness, self-sacrifice and generosity are the exclusive possession of no one race or religion.”

– Mahatma Gandhi