Writ Petition Summary (Revenue Bar Association)

Tribunals and the Finance Act

Background and Issue

The Petitioner challenged the passing of Finance Bill, 2017 (now the Finance Act, 2017) as a ‘Money Bill’ under Article 110 of the Constitution of India. They argue that the sweeping provisions in Part XIV of the Bill are beyond that which is allowable in a Money Bill. And alongside the “Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017” passed by the Department of Revenue, present a situation of “constitutional impropriety”. The Bill provided for a ‘convergence of tribunals’ through which 26 tribunals were abolished and the provisions relating to the service conditions of the members of those tribunals were also repealed in favour of the Tribunal Rules.


What does the petitioner seek?

The petitioner has prayed for –

  1. Declaration of the Finance Act, 2017 as null and void for being violative of Articles 107,110 and 117 of the Constitution.

  2. Declaration of Part XIV of the Finance Act as ultra vires of the Articles 142150 and 323B of the Constitution and violative of the basic structure of the Constitution.

  3. Declaration of “Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017” as ultra vires of Articles 14, 21 and 50 of the Constitution of India.



Procedural Illegality

The petitioner argues that the Finance Act, 2017 does not fulfil the requirements for a Money Bill  under Article 110 as the Bill deals with ‘administration of justice’. The Bill dealt with structure, organisation and service conditions of tribunals which is outside the scope of Article 110. Further, Clause (1) of Article 110 presents an exhaustive list of narrowly defined fiscal subjects that are necessary and exclusive for a bill to be considered a Money Bill – the Finance Act, 2017 does not fit into this definition.


There is a lack of clarity on whether the provisions in question have any financial implications at all. The only fiscal implication is the appropriation out of the Consolidated Fund of India regarding service conditions and salaries of tribunal members. Article 323B requires any law framed in respect of creation of tribunals to provide necessary measures for efficient disposal and enforcement of order and therefore, the petitioner submits, cannot be construed as a fiscal subject to satisfy Article 110.


Article 107 requires the approval of both houses of Parliament for the passing of legislation, except that the speaker of the house ruled that the Finance Act was a Money Bill which severely restricts the role of the Rajya Sabha rendering their views “irrelevant and nugatory”.


Independence of Tribunals and Judicial Primacy

The petitioner referred to Devi Das Gopal Krishnan v. State of Punjab to argue against the amount of discretionary power given to the Centre. The Bill allows the Central Government to lay down service conditions without providing a framework of any sort. They further referred to S.P. Sampath Kumar v. Union of India which declared that Tribunals must be treated as real substitutes for the High Courts. They need to be insulated from interference from coordinate branches of Government to ensure their independence.


The rules regarding eligibility are also contrary to the Supreme Court’s precedents. Persons lacking judicial experience are eligible for appointment as Chairperson and as Judicial Members of a Tribunal. The Supreme Court had previously ruled that these members must have relevant experience in the subject matter.


Service Conditions

There is a lack of uniformity amongst the scheduled tribunals. There are differences in retirement ages, selection processes, eligibility criteria and other service conditions. These differences are allegedly in violation of the equal protection clause from Article 14. According to the petitioner there is no reasonable basis for having different procedures for tribunals performing similar functions.


Separation of Powers

The Finance Bill, 2017 might create a ‘master-servant’ relationship between the Central Government and tribunal members. As the Central Government possesses the power to remove members simply based on an inquiry conducted by the relevant ministry. Consultation or concurrence with the Chief Justice.  Further, the ministry-in-charge is the leave sanctioning authority for the tribunal members. Collectively this would have an “…enduring and debilitating effect on the independent and impartial adjudication by the tribunal”.