Judicial Members Of Tax Tribunals Can’t Be Appointed Without Consultation With HC, Administrative Members Should Be Judicially Trained: Bombay HC [Read Judgment]

In a significant judgment, the Bombay High Court has held that judicial members of tax tribunals cannot be appointed without effective consultation with the high court and administrative members must be judicially trained.

The bench of Justice AS Oka and Justice Riyaz Chagla also held that 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 is available, the matters where an urgent ad­interim or interim relief is sought can be placed before the administrative member sitting singly, the court said.

Case background

The above directions were passed in a writ petition filed by the Sales Tax Tribunal Bar Association wherein certain statutory provisions under the Maharashtra VAT Rules and VAT Act regarding appointment of members to the said tribunal were challenged. Issues relating to infrastructure were also raised in the petition, but directions on the same were passed in an earlier judgment.

Government Resolution dated June 2, 1973, was also challenged in the said petition.

The said GR issued by the state finance department deals with appointment of Deputy Commissioner of Sales Tax as members of the tribunal. It provides that retired Deputy Commissioner of Sales Tax should not be considered for appointment on the tribunal.  It provides that the selection of the members of the tribunal should be entrusted to a high-power selection board with the Chief Secretary as chairman; and the Secretary of Law and Judiciary Department, and the Secretary of Finance Department as its members.

Submissions and Final Judgment

Senior Advocate RV Desai appeared for the petitioners in the matter and AGP VA Sonpal appeared for the respondent State and its other departments.

Counsel for the petitioners argued that under Section 11 of the VAT Act, the powers of appointing members of the tribunal and the president of the tribunal have been conferred on the government, and neither the VAT Act nor the rules framed thereunder provide for consultation of the high court.

He also submitted that neither the Act or the rules say that a bench constituted at the tribunal should be headed by a judicial member, thus in absence of any such provision, even a person who is holding the office of a Joint Commissioner of Sales Tax can be allowed to head the bench though the other member may be a former judge of the high court or a former district judge.

AGP Sonpal submitted that a non-judicial member may be appointed but the practice has been that they never sit singly and assist the judicial members when sitting in a bench.

The court then referred to an affidavit filed in the matter by Deputy Secretary of State Finance Department, which said:

1)     So far as judicial members are concerned, they are appointed only with the consultation of the high court. The state government, apart from playing the role of issuing the notification for appointment of the judicial officer, does not in any manner make any operational participation in the appointment of judicial members.

2)      In case of administrative members, a high-powered committee consisting of (a) Chief Secretary, (b) Secretary (Law & Judiciary) and (c) Secretary, Finance must be formed.

3)      The appointment of administrative members is made by the said high-powered committee, from amongst those persons who have served as a Joint Commissioner of Sales Tax or above and have more than 20 years’ experience. As noted above, the administrative members cannot and do not sit singly.

Thus, after examining all the provisions, submissions and earlier decisions of the Supreme Court, the bench passed the following directions:

• No judicial member of the tribunal will be appointed without effective consultation with the high court. The effective consultation will be in terms of law laid down by the Supreme Court in State of Gujarat v. Gujarat Revenue Tribunal Bar Association.


• 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;


• In case of an emergency, when none of the judicial members are available, matters where an urgent ad-interim relief or interim relief is sought, can be placed before an administrative member sitting singly;


• The appointment of non-judicial members will be done by a high-powered committee preferably headed by a retired HC judge;


• Government Resolution dated June 2, 1973, has been quashed and set aside; and


• In case of administrative or non-judicial members, state shall ensure that members are judicially trained in the sense that they have a long experience of dealing with quasi-judicial proceedings.

Please refer to the judgment for other directions.