Supreme Court Strikes Down Amended Rules In Finance Act 2017 On Tribunal Appointments

A Constitutional Bench of Supreme Court on Wednesday struck down the rules in the amended Finance Act 2017 on tribunals under Section 184 and directed the government to reformulate fresh norms with respect to the appointment of tribunal members.

The top court directed that appointment in tribunals should be in accordance with respective statutes. (Image: AFP)

New Delhi: A Constitutional Bench of Supreme Court on Wednesday struck down the rules in the amended Finance Act 2017 on tribunals under Section 184 and directed the government to reformulate fresh norms with respect to the appointment of tribunal members. According to Bar and Bench website, the apex court also referred the matter of whether the act could be passed as a Money Bill to a larger bench. The decision came following a batch of petitions which raised concerns over the functioning of tribunals including a challenge to the Finance Act 2017 which had revamped the schemes that governs the functioning of tribunals. A bench headed by Chief Justice Ranjan Gogoi directed the Ministry of law to conduct an impact study and submit report to the apex court. The top court directed that appointment in tribunals should be in accordance with respective statutes. The report, however, added that the top court upheld Section 184 of the Finance Act which had entitled the Central government to frame rules to determine appointment, service conditions, removal and other aspects of tribunals. The five-judge Constitution Bench, also comprising CJI Gogoi and Justices NV Ramana, DY Chandrachud, Deepak Gupta and Sanjiv Khanna, ordered that validity of passage of Finance Act 2017 as Money Bill should be decided by a larger bench. Money Bills exclusively contain provisions for imposition of taxes and appropriation of moneys out of the Consolidated Fund of India. The judgment was rendered in a batch of petitions challenging the Constitutional validity of Finance Act, 2017 and the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 (Rules), Bar and Bench informed. In April this year, the court had reserved its verdict on over petitions challenging the Constitutional validity of the Finance Act 2017 on the ground that it was passed by Parliament as a Money Bill. A five-judge Constitution bench reserved its order on pleas that also included one challenging the Finance Act 2017 alleging that the government was taking over the powers to decide the terms and conditions of tribunal members, including their tenure, news agency IANS had reported. Earlier the Centre had justified the Finance Act 2017 as a Money Bill contending it had provisions that dealt with salaries and allowance to be paid to members of tribunals from the consolidated funds of India. Appearing for a petitioner, senior counsel Arvind Datar pointed to a Finance Act 2017 provision dealing with tribunals that gave the government powers to frame rules overriding the statutory provision relating to the terms and conditions of the members of the tribunals.