2012 (3) TMI 200 - SC - Customs

Supreme Court Upholds Customs Act Section; Former CESTAT Members Restricted from Appearing

The Supreme Court upheld the constitutionality of Section 129(6) of the Customs Act, 1962, which restricts former members of the Customs, Excise, and ... Restriction on right to practice before tribunal - Reasonable restriction under Article 19(6) - Equality and classification under Article 14 - Retroactive operation of statute - Legislative competence - Harmonious construction of statutesRestriction on right to practice before tribunal - Reasonable restriction under Article 19(6) - Equality and classification under Article 14 - Validity of Section 129(6) of the Customs Act as a restriction on the right to practise and its compatibility with Articles 14 and 19(1)(g) read with Article 19(6). - HELD THAT: - The Court held that Section 129(6) is not an absolute prohibition but a limited restriction disqualifying former President, Vice-President or Members from appearing, acting or pleading before the Appellate Tribunal. The restriction was held to be a permissible regulation of the statutory/fundamental right to practise law, satisfing the tests of being imposed by law, being reasonable and having a rational nexus to the object sought (preserving institutional integrity, avoiding likelihood of bias, and enhancing public confidence). The Court relied on established principles that reasonable classification is permissible under Article 14 and that professional practice rights are subject to reasonable statutory regulation; it observed that the restriction leaves open ample alternative forums for practice and serves a legitimate public interest in administration of justice. Accordingly, the provision is not ultra vires Articles 14 or 19(1)(g). [Paras 20]Section 129(6) is constitutionally valid and does not amount to an unreasonable or arbitrary restriction on the right to practise.Retroactive operation of statute - Whether Section 129(6) may be applied to persons who had joined and demitted office before the amendment was enacted. - HELD THAT: - The Court distinguished retrospectivity and retroactivity, noting the right to practise is a statutory right subject to subsequent regulation. It held that the provision operates retroactively in the sense that its operation in presenti may relate to antecedent facts (previous service), but the law is not impermissibly retrospective in a manner that infringes vested rights. Applying principles of statutory interpretation and fairness, and relying on precedents recognizing that new eligibility criteria or procedural rules can apply to existing situations where no settled vested right prevents it, the Court found no bar to applying Section 129(6) to former members who had already demitted office. [Paras 43, 44]Section 129(6) applies to persons who had demitted office prior to its enactment; its application is not impermissibly retrospective.Harmonious construction of statutes - Whether Section 146A of the Customs Act permits former members disqualified under Section 129(6) to appear before the Tribunal despite the bar. - HELD THAT: - The Court held that Section 146A must be read harmoniously with Section 129(6). Given the specific disqualification in Section 129(6), a person disqualified thereunder cannot derive benefit from Section 146A to appear before the Tribunal. The two provisions are compatible and must be construed together so that the restriction in Section 129(6) is given effect. [Paras 52]No inconsistency exists; Section 146A does not override or circumvent the disqualification under Section 129(6).Final Conclusion: All appeals dismissed; Section 129(6) of the Customs Act is constitutionally valid, applies to persons who demitted office before its enactment, and must be harmoniously read with Section 146A, with no order as to costs. Issues Involved:1. Constitutionality of Section 129(6) of the Customs Act, 1962.2. Applicability of Section 129(6) to the petitioner, considering its introduction post the petitioner's tenure as a CESTAT member.Detailed Analysis:Issue 1: Constitutionality of Section 129(6) of the Customs Act, 1962Background and Arguments:The appellants challenged Section 129(6) of the Customs Act, 1962, which bars former members of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) from appearing before the Tribunal. They argued that this provision is ultra vires Articles 14, 19(1)(g), and 21 of the Constitution of India. The High Court had previously rejected these contentions, emphasizing that the restriction was aimed at enhancing the administration of justice and removing perceived biases.Judgment:The Supreme Court upheld the constitutionality of Section 129(6), stating that:- The restriction is not absolute but partial, allowing former members to practice in other courts and tribunals.- The restriction serves a larger public interest by maintaining professional standards and public confidence in the Tribunal's administration of justice.- The restriction is reasonable and falls within the scope of Article 19(6) of the Constitution.Legal Principles:- Fundamental rights under Part III of the Constitution are subject to reasonable restrictions.- The right to practice law is a statutory right under the Advocates Act, 1961, and is subject to reasonable restrictions.- The restriction imposed by Section 129(6) is intended to prevent any conflict of interest and maintain the integrity of the Tribunal.Case References:- Sukumar Mukherjee v. State of West Bengal: Upheld restrictions on private practice by medical practitioners who were also teaching.- Municipal Corporation of Ahmedabad v. Jan Mohammed Usmanbhai: Validated closure of butcher houses on certain days as a reasonable restriction.- Devata Prasad Singh Chaudhuri v. Patna High Court: Upheld restrictions on Mukhtiars' right to practice.- Paradip Port Trust v. Their Workmen: Validated restrictions on legal practitioners appearing before Industrial Tribunals.- Lingappa Pochamma Appelwar v. State of Maharashtra: Rejected the contention that advocates have an absolute right to appear before any court or tribunal.Issue 2: Applicability of Section 129(6) to the PetitionerBackground and Arguments:The appellants argued that Section 129(6) should not apply to them as it was introduced after they had already served as members of the Tribunal and had started practicing as advocates. They contended that applying this provision retrospectively would be unfair and unconstitutional.Judgment:The Supreme Court rejected this contention, stating:- The right to practice law is subject to statutory and constitutional limitations.- The restriction imposed by Section 129(6) is not retrospective but retroactive, affecting the right to practice before the Tribunal in the present and future.- The restriction is not punitive but a criterion for eligibility to practice before the Tribunal.Legal Principles:- The distinction between retrospective and retroactive laws: A law is retroactive if it affects rights in the present based on past events but is not necessarily retrospective.- The right to practice law is not absolute and can be regulated by reasonable restrictions.- The restriction imposed by Section 129(6) is reasonable and serves a legitimate public interest.Case References:- R. v. Inhabitants of St. Mary, Whitechapel: Discussed the application of laws that draw requisites from past events.- Vijay v. State of Maharashtra: Applied the rule of fairness in interpreting statutory restrictions.- Dilip v. Mohd. Azizul Haq: Held that statutes providing new remedies or manners for enforcement apply to both future and past causes of action.Conclusion:The Supreme Court dismissed all the appeals, upholding the constitutionality and applicability of Section 129(6) of the Customs Act, 1962. The Court found the restriction to be reasonable, serving a larger public interest, and not violating the fundamental rights of the appellants. The judgment emphasized the importance of maintaining professional standards and public confidence in the administration of justice by the Tribunal.