In Madras Bar Association v. Union of India, the Supreme Court examined the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2020 governing 19 tribunals, and issued detailed directions to secure their independence from the executive. Though the rules examined did not cover the GST Appellate Tribunal, the principles shape how tax tribunals are expected to be constituted and run.
Case at a glance
| Case | Madras Bar Association v. Union of India & Anr. (with connected matters) |
| Forum | Supreme Court of India (Justice L. Nageswara Rao, Justice Hemant Gupta and Justice S. Ravindra Bhat) |
| Case No. | Writ Petition (C) No. 804 of 2020 |
| Rules examined | Tribunal Rules, 2020, in force from 12.02.2020 |
| Background | Sequel to Rojer Mathew v. South Indian Bank Ltd. |
| Result | Rules read down and modified through directions |
Facts of the case
After the Constitution Bench in Rojer Mathew struck down the 2017 Rules framed under the Finance Act, 2017, the Union notified fresh Rules in 2020 on selection, tenure and service conditions of members of 19 tribunals.
The Madras Bar Association challenged the 2020 Rules, contending that they again failed to secure independence from the executive.
Issue before the Supreme Court
Do the Tribunal Rules, 2020 comply with the constitutional requirement of independence of tribunals that exercise judicial functions?
What the Supreme Court held
- The Union must set up a National Tribunals Commission to supervise appointments, functioning, discipline and administrative needs of tribunals; until then, a separate wing in the Ministry of Finance must serve tribunals.
- Search-cum-Selection Committees must be led by the Chief Justice of India or nominee with a casting vote, with the tribunal head (or a retired judge), the Law Secretary and a Secretary from another department; the sponsoring department's Secretary is a non-voting Member-Secretary. One name is to be recommended per post, with one on a waiting list.
- Members get a five-year term with eligibility for reappointment, and members other than the chair serve until 67. House rent allowance of Rs 1,50,000 (chair and vice-chair) and Rs 1,25,000 (members) a month is payable from 01.01.2021 if housing is not provided.
- Advocates with at least 10 years' experience, and Indian Legal Service members meeting the same criteria, are eligible as judicial members. Selection committee recommendations on discipline are final, and appointments must be made within three months of recommendation.
- The 2020 Rules operate prospectively from 12.02.2020. The Court criticised the Government's repeated failure to implement earlier directions.
Practical takeaways for taxpayers
- Independence of tribunals rests on judicial dominance in selection, secure tenure and freedom from control of the litigating department.
- These principles were developed for tribunals under the Finance Act, 2017, and can be relevant when the structure of tax tribunals, including GSTAT, is discussed.
- Practitioners appearing before GSTAT should be aware of this line of cases when issues of tribunal constitution arise.
Frequently asked questions
Did this judgment directly deal with GSTAT?
No. It dealt with the 2020 Rules for 19 tribunals, but its principles on independence are relevant to all tribunals.
Can advocates become judicial members of tribunals?
Yes. The Court directed that advocates with at least 10 years' experience be made eligible.
Facing a similar GST dispute?
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This summary is based on the order of the Supreme Court of India in Writ Petition (C) No. 804 of 2020 (Madras Bar Association v. Union of India). It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.