Over recent times, a Constitution Bench of the Supreme Court of India (SC) has overturned rules put in place by the government under the Finance Act of 2017. These changes were intended to modify appointments to 19 key judicial tribunals. The SC deemed these modifications in violation of the parent enactment and principles of the Constitution. Moreover, debates have been ignited over whether the Finance 2017 Act should have, in fact, been passed as a money bill.
Finance Act 2017: A Matter of Importance
The Finance Act is traditionally enacted at the beginning of every accounting year, reflecting the government’s fiscal policies. However, the Finance Act, 2017 not only set the fiscal agenda but also brought about changes impacting the powers and composition of various tribunals. Tribunals such as the National Green Tribunal and Income Tax Appellate Tribunal were significantly affected.
The Finance Act, 2017 bestowed upon the Union government the power to govern appointments and alter service terms and conditions for members of the tribunals. While this action does require parliamentary approval, changing appointments through rules effectively reduces the level of parliamentary scrutiny required. These changes raised issues due to the potential involvement of the executive in the appointment and reappointment of members.
Understanding Tribunals
A tribunal is a specialized court that deals with specific matters or problems of a particular type. They are established by an act of Parliament, whereas courts are constitutional bodies that handle all types of cases. Concerns around the alterations brought about by the Finance Act, 2017 arose due to the potential impact on the independence of these tribunals.
| Tribunal | Type of Cases |
|---|---|
| National Green Tribunal | Environmental Issues |
| Income Tax Appellate Tribunal | Income Tax Cases |
Finance Act as a Money Bill?
The prevailing question that arises is whether the Finance Act, 2017 could have been passed as a money bill. A money bill contains provisions relating to taxation, government borrowing, expenditure from or receipt to the Consolidated Fund of India.
If considered a money bill, it can only be introduced in the Lok Sabha on the President’s recommendation and can be passed by a simple majority. The Rajya Sabha may provide recommendations, which the Lok Sabha may reject if it chooses. If no recommendations are given within 14 days, it is assumed to be passed by Parliament.
Implications of the Judgment
Further to the modifications of tribunals, the SC has ordered the government to conduct a ‘Judicial Impact Assessment’ for all 24 tribunals to understand the repercussions of the merger.
This decision underscores the current unsatisfactory state of tribunals in India and calls for the formation of a statutory organization dubbed the National Tribunal Commission, designed to monitor the workings of these tribunals.