National Tax Tribunal Ordinance, 2003 upheld as constitutional. President's satisfaction not justiciable without supporting material.

The court held that the National Tax Tribunal Ordinance, 2003, is prima facie constitutionally valid. It determined that the President's satisfaction under Article 123 is not justiciable unless lacking supporting material. The court found no evidence of judiciary independence compromise or constitutional violation. The interim order was vacated, and the case is set for further proceedings on affidavits, with actions subject to the writ petition outcome.

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Issues Involved:

1. Constitutionality of the National Tax Tribunal Ordinance, 2003.
2. Judicial review of the President's satisfaction under Article 123.
3. Legislative competence and independence of the judiciary.
4. Immediate necessity for promulgating the Ordinance.

Detailed Analysis:

1. Constitutionality of the National Tax Tribunal Ordinance, 2003:

The primary issue is whether the National Tax Tribunal Ordinance, 2003, is constitutionally valid. The purpose of the Ordinance is to establish a Tax Tribunal under Article 323B of the Constitution to adjudicate disputes relating to direct and indirect taxes, replacing the High Court's jurisdiction in these matters. The Ordinance aims to alleviate the burden on High Courts and expedite the resolution of tax-related cases.

2. Judicial Review of the President's Satisfaction under Article 123:

The petitioners argue that the President's power under Article 123 to promulgate ordinances is conditioned upon objective satisfaction of the necessity for immediate action. They contend that the President's satisfaction is justiciable and subject to judicial review. The petitioners assert that there were no emergent circumstances justifying the immediate promulgation of the Ordinance, and the government could have waited for the winter session of Parliament.

The court acknowledges that the President's action under Article 123 is susceptible to judicial review. However, it emphasizes that the satisfaction of the President is not justiciable unless there is no material at all to support the satisfaction. The court refers to precedents, including S.K.G. Sugar P. Ltd. v. State of Bihar, where the Supreme Court held that the necessity for immediate action is a matter for the subjective satisfaction of the President and not justiciable.

3. Legislative Competence and Independence of the Judiciary:

The petitioners argue that the establishment of the Tax Tribunal under the Ordinance undermines the independence of the judiciary. They contend that the High Courts have been effectively handling tax disputes for decades, and the new Tribunal's establishment raises concerns about the independence and impartiality of the judiciary.

The court examines the provisions of Article 323B, which empowers the appropriate Legislature to establish Tribunals for adjudicating tax disputes. The court notes that similar Tribunals have been upheld by the Supreme Court in previous cases, such as L. Chandra Kumar v. Union of India. The court finds no prima facie evidence that the Ordinance undermines the independence of the judiciary or the basic structure of the Constitution.

4. Immediate Necessity for Promulgating the Ordinance:

The petitioners argue that there was no immediate necessity for promulgating the Ordinance, as the government could have waited for the winter session of Parliament. They assert that the executive's purported satisfaction of emergent circumstances is mala fide and lacks a reasonable basis.

The court examines whether the President's satisfaction of the necessity for immediate action was recorded. It finds that the preamble of the Ordinance states that Parliament was not in session and the President was satisfied that circumstances required immediate action. The court holds that this statement is sufficient to establish prima facie validity of the President's satisfaction unless it is shown that there was no material to support it.

Conclusion:

The court concludes that the National Tax Tribunal Ordinance, 2003, is prima facie constitutionally valid. It holds that the President's satisfaction under Article 123 is not justiciable unless there is no material to support it. The court finds no evidence that the Ordinance undermines the independence of the judiciary or violates the basic structure of the Constitution. The interim order is vacated, and the matter is to be heard on affidavits. The court emphasizes that any action taken, except placing the Ordinance before Parliament, will abide by the result of the writ petition.

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