Setback for reform as Calcutta HC stays Tax Tribunal

Justice Kalyan Jyoti Sengupta of the Calcutta High Court passed the stay order on a petition alleging that there was 8216;8216;no emergent circumstance8217;8217; necessitating the promulgation of the National Tax Tribunal ordinance on October 16.

The Calcutta High Court8217;s intervention is, however, contrary to a slew of Supreme Court judgments categorically ruling that the 8216;8216;propriety, expediency and necessity8217;8217; of an ordinance cannot be questioned under any circumstances.

The law on the promulgation of an ordinance is clearly loaded in favour of the executive: it can never be asked to justify its decision to invoke this emergency power.

So, if Justice Sengupta does not make amends by November 11, the next date of the case, there is a good chance of the Supreme Court vacating his stay order in line with its own verdicts.

8226; In K Nagaraj vs State of Andhra Pradesh, the Supreme Court held in 1985 that the executive8217;s power to promulgate ordinances is 8216;8216;plenary within its field in the same manner as the power of the legislature to legislate.8217;8217; Though the petitioner can challenge the constitutionality of the provisions of the ordinance, he can never question its promulgation whether on the ground of 8216;8216;non application of mind8217;8217; or on the ground of 8216;8216;mala fides.8217;8217;

8226; In the same year, the apex court went further in T Venkat Reddy vs State of Andhra Pradesh where it said: 8216;8216;Whenever the law is made by a competent legislature it has to be assumed that the legislative discretion was validly exercised. Therefore, the existence of necessity of promulgating an ordinance is non-justiciable. It is legislative action and cannot be tested by the courts as executive or administrative action.8217;8217;

8226; More recently, in 2001, the Supreme Court reiterated the essence of the two 1985 judgments in another case, Gurudevdatta Maryadit vs State of Maharashtra.

Since the Centre cited these rulings, the Delhi high court and the Madras high court refrained from passing any stay order on similar petitions challenging the National Tax Tribunal ordinance.

For the last two days, a bench headed by the Delhi high court Chief Justice, B C Patel, has been hearing a petition filed by another lawyer, H C Bhatia, against the ordinance. Justice Patel adjourned the hearings today without issuing any notice after the high court bar association said that it too wished to file a petition challenging the ordinance.

The Madras high court, on its part, did issue a notice to the Centre on October 30 while declining to stay the implementation of the ordinance. Given the multiplicity of proceedings, the Centre may seek to transfer all the petitions to one high court or the apex court itself.