WP(C) 6710/2007 Page 1 of 35 * THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on : 13.04.2009 WP(C) No. 6710/2007 P.C. JAIN ..... Petitioner versus UOI & Anr. ..... Respondent WP(C) No. 6711/2007 V.K. AGGARWAL ..... Petitioner versus UOI & Anr. ..... Respondent WP(C) No. 6712/2007 N.K. BAJPAI ..... Petitioner versus UOI & Anr. ..... Respondent WP(C) No. 6792/2007 K.L. REKHI ..... Petitioner versus UOI & Anr. ..... Respondent Advocates who appeared in this case: For the Petitioner : Mr C. Hari Shankar, Mr S. Sunil & Mr Manish Pushkarna, Advocates For the Respondent : Mr P.P. Malhotra, Additional Solicitor General with Ms Monika Garg, Advocate CORAM :- HON'BLE MR JUSTICE VIKRAMAJIT SEN HON'BLE MR JUSTICE RAJIV SHAKDHER WP(C) 6710/2007 Page 2 of 35 1. Whether the Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to Reporters or not ? Yes 3. Whether the judgment should be reported Yes in the Digest ? RAJIV SHAKDHER, J It is often said that the law acts ex-post facto. In the instant case, the legislature has acted in pursuance of what is perceived as undesirable - which is the right of a member/president/ vice-president of the Customs Excise Service Tax Appellate Tribunal (hereinafter referred to as the „CESTAT‟) to appear, act and/or plead on their demitting office before the very same Tribunal. The legislature has sought to debar all such like persons, by insertion of sub-section (6) to Section 129 of the Customs Act, 1962 (hereinafter referred to as the „Custom Act‟). The said provision was introduced by Section 110 of the Finance Act, 2007 w.e.f. 11.05.2007. 1.1 The petitioners being aggrieved, have laid a challenge to the said provision, broadly on two grounds. The first being, that Section 129(6) of the Customs Act is ultravires Articles 14, 19(1)(g) and 21 of the Constitution of India. The second, that, in any event, Section 129(6) of the Act has no applicability to the petitioners in view of the fact that at the time when they were appointed to CESTAT and also at a point in time when they demitted the office, the said provision was not on the statute book. In sum and substance, the petitioners contend WP(C) 6710/2007 Page 3 of 35 that both on a plain reading of the provision, as also otherwise, it cannot apply to the petitioners as they cannot be bound by a conditionality of which they had no notice. 1.2 The petitioners have towards this end made the following prayers which are common to each of the captioned writ petitions: “(i) To strike down Section 129(6) of the Customs Act, 1962, as being arbitrary, illegal and unconstitutional. (ii) Consequently, to issue a writ of mandamus, or other writ, order or direction in the nature of mandamus, directing the Tribunal to permit the petition to appear and plead before it.” 1.3 In addition, in writ petition 6712/2007 entitled N.K. Bajpai vs UOI & Ors. the following prayer has been made: “(i) To issue a writ of certiorari, or other order or direction in the nature of certiorari, quashing and setting aside the impugned Misc Order dated 09.07.2007 passed in Service Tax Appeal No. 260 of 2007, whereby the Tribunal has held that the petitioner is not eligible to appear and plead for the appellant in the said appeals.” 1.4 Similarly, in writ petition 6710/2007, entitled P.C. Jain vs UOI & Ors., an additional prayer has been made: WP(C) 6710/2007 Page 4 of 35 “(i) To issue a writ of certiorari, or other order or direction in the nature of certiorari, quashing and setting aside the impugned Misc order dated 16.07.2007 and 26.07.2007 passed by the Hon‟ble CESTAT in (Excise Appeal No. E/1722-23/07-Ex) & (E/2844, 2469, 3034 of 2000 and E/251,252 of 2001) respectively, whereby the Tribunal has held that the petitioner is not eligible to appear and plead for the appellant in the said appeals.” 2. The challenge to the miscellaneous order dated 09.07.2007 in writ petition no. 6712/2007 arises on account of the fact that the CESTAT had relieved the petitioner from appearing in the appeal filed by his client before CESTAT in view of the provisions of Section 129(6) of the Customs Act. Similarly, in writ petition No. 6710/2007, the petitioner has challenged the order dated 16.7.2007 and 26.07.2007 passed by two different benches of the CESTAT, whereby the petitioner was prevented from appearing for his client before CESTAT, again, on account of the bar incorporated in Section 129(6) of the Customs Act. In passing the order dated 26.07.2007, the CESTAT relied upon the order dated 09.07.2007 referred to hereinabove passed in the case of Madhya Pradesh Consultancy Organisation Ltd vs CCE, Bhopal being Service Tax Appeal No. 260 of 2007. WP(C) 6710/2007 Page 5 of 35 2.1 In view of commonality of cause and almost similar facts obtaining in the case of each of the petitioner(s) except for a minor difference, in respect of, facts pertaining to the petitioner in writ petition 6792/2007 to which we will advert as we go along with the narration of facts, we have decided to pen a common judgment in respect of the captioned writ petitions. With this, the facts relevant to each of the petitioners are noted hereinafter. 2.2 In so far as the petitioner, Sh. K.L. Rekhi in writ petition 6792/2007 is concerned, he joined Indian Customs and Central Excise Service, Class – I (later called Group „A‟) (in short the „service‟) on 10.01.1957. On 29.09.1982 he assumed the charge as Member (Technical) Customs Excise and Gold (Control) Appellate Tribunal (in short „CEGAT) (as it was then known). On 01.02.1989, he was promoted in his parent cadre as Chairman, Central Board of Excise and Customs (in short „CBEC‟), which is when, he relinquished charge as Member, CEGAT. On 31.01.1991 Sh. K.L. Rekhi superannuated as the Chairman of CBEC. 2.2 Sh. P.C. Jain, petitioner in writ petition 6710/2007, joined service in July, 1963. On 01.05.1986 he assumed charge as Member (Technical) in CEGAT. On 28.09.1999, when the petitioner demitted office, he was the vice-chairman of CEGAT. In the interregnum, the WP(C) 6710/2007 Page 6 of 35 petitioner had also obtained a bachelors degree in law, in 1991, from University of Delhi. 2.3 Similarly, Shri. V.K. Aggarwal, the petitioner in writ petition no. 6711/2007, joined service on 13.11.1967. Shri. Aggarwal assumed charge as Member (Technical) CEGAT on 02.03.1998. On 13.05.2005 Shri. Aggarwal demitted office as a member CESTAT. Unlike others, Shri. Aggarwal had won a bachelors degree in law even before he entered service, having passed out, from Lucknow University in 1965. 2.4 As in the case of other petitioners, Sh N K Bajpai, the petitioner in writ petition 6712/2007 entered service on 24.05.1960 with a bachelors degree in law having passed out from Allahabad university in 1956. He assumed charge as Member (Technical) CEGAT on 01.11.1990, and on 07.03.1993, he demitted office as Member CEGAT. 3. A perusal of the facts, adverted to above, would show that except for Sh. K.L. Rekhi, the other three petitioners, that is, P.C. Jain. V.K. Aggarwal, and N.K. Bajpai are law graduates. On demitting office, it is stated that Sh. Rekhi had been appearing for litigants before the CEGAT and thereafter, the CESTAT, as it is presently known, as an authorised representative of his clients, in accordance with, the provisions of the relevant Act and the Rules enacted WP(C) 6710/2007 Page 7 of 35 thereunder. We shall advert to the relevant provisions in the course of our judgment. 4. Since reliefs claimed by the petitioners are pivoted on the challenge laid to the provisions of Section 129(6) of the Customs Act and/or its applicability, for the sake of convenience, it would be relevant to extract the said section in its entirety. 129 Appellate Tribunal – (i) The Central Government shall constitute an Appellate Tribunal to be called the Customs, Excise and Service Tax Appellate Tribunal consisting of as many judicial and technical members as it thinks fit to exercise the powers and discharge the functions conferred on the Appellate Tribunal by this Act. (2) A judicial member shall be a person who has for at least ten years held a judicial office in the territory of India or who has been a member of the Indian Legal Service and has held a post in Grade I of that service or any equivalent or higher post for at least three years, or who has been an advocate for at least ten years. Explanations: For the purposes of this sub-section, - (i) In computing the period during which a person has held judicial office in the territory of India, there shall be included any period, after he has held any judicial office, during which the person has been an advocate or has held the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law; (ii) In computing the period during which a person has been an advocate, there shall be included any period during which the person has held a judicial office, or the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law after he became an advocate. WP(C) 6710/2007 Page 8 of 35 (2A) A technical member shall be a person who has been a member of the Indian Customs and Central Excise Service, Group A, and has held the post of Commissioner of Customs or Central Excise or any equivalent or higher post for at least three years. (3) The Central Government shall appoint – (a) a person who is or has been a judge of a High Court; or (b) one of the members of the Appellate Tribunal, to be the President thereof, (4) The Central Government may appoint one or more members of the Appellate Tribunal to be the Vice-President, or, as the case may be, Vice-Presidents, thereof. (5) A Vice-President shall exercise such of the powers and perform such of the functions of the President as may be delegated to him by the President by a general or special order in writing. (6) On ceasing to hold office, the President, Vice- President or other Member shall not be entitled to appear, act or plead before the Appellate Tribunal. SUBMISSIONS ON BEHALF OF THE PETITIONERS 5. In the context of the aforesaid provision, that is, sub-section (6) of Section 129 of the Customs Act, (in short the „impugned provision‟), it is contended on behalf of the petitioners that the sub- section can have no applicability to the petitioners who were appointed as member, vice-president and president before the insertion of the said provision in the Act and, therefore, they had not subjected themselves to the bar or the limitation contained therein, at a point in time when they entered service. As a matter of fact, the petitioners contend that the provision was not on the statute book even when they WP(C) 6710/2007 Page 9 of 35 demitted office as a member/vice-president of CESTAT. Reliance in this regard is placed on the judgment of the Supreme Court in Sukumar Mukherjee vs State of West Bengal & Anr. (1993) 3 SCC 723. The petitioners also contend that a bare perusal of the language of sub-section (6) of section 129 of the Customs Act would show that it is applicable prospectively. To drive home this point, the petitioners have referred to the language in Article 124(7) and Article 220 of the Constitution of India, wherein the expression found is “has held office” as against “ceasing to hold the office” as found in Section 129(6) of the Customs Act. 6 The petitioners on the aspect of the Constitutional invalidity of the provision have laid challenge by invoking provisions of Article 14, Article 19(1)(g) and Article 21 of the Constitution of India. The challenge on the basis of the violation of Article 14 of the Constitution of India is rested on the submission that there is no discernable reason for enacting such a provision as there is no „Statement Of Object And Reasons‟ accompanying the enactment nor do the „Notes to clauses‟ or the counter affidavit filed by the respondent delve on the evil or mischief which was sought to be remedied by the impugned provision. It was contended at the bar that members of other Tribunals, such as, the Income Tax Appellate Tribunal and Appellate Tribunal for Foreign Exchange are not disabled from appearance or from acting or pleading for their clients before their respective Tribunals, even though the WP(C) 6710/2007 Page 10 of 35 provisions relating to their recruitment, method of appointment, selection procedure are almost similar. The petitioners contend that this is discriminatory and hence violative of Article 14. 7 The violation of Article 19(1) of the Constitution is alleged on the ground that even though 3 out of 4 petitioners are enrolled with the Bar Council Of Delhi, they are prevented from practising their profession by virtue of the impugned provision, which is directly in conflict with their rights to practice as an advocate; before any court including the Supreme Court or any Tribunal or any person legally authorised to take evidence - as encapsulated in Section 30 of the Advocates Act, 1961 and Section 14 of the Indian Bar Councils Act, 1926. Here it is relevant to point out that the petitioners have submitted that even if it is conceded that Section 30 of the Advocates Act has not been brought into force and is thus not available to the petitioners, the provisions of Section 14 of the Indian Bar Councils Act, 1926, which is pari materia with Section 30 of the Advocates Act, 1961, provides a sufficient plank on which their challenge to the impugned provisions can be sustained. Reliance in this regard is placed on a Full Bench Judgment of the Punjab & Haryana High Court in the case of Smt. Jaswant Kaur & Anr. Vs State of Haryana AIR 1977 P&H 221. It is thus contended that the restriction contained in the impugned provision is not reasonable within the meaning of Article 19(6) of the Constitution. WP(C) 6710/2007 Page 11 of 35 8 In the same vein, it was also submitted that the impugned provision violates the Article 21 of the Constitution, in as much as, it deprives a person of his right to livelihood. 9 To buttress their submissions, the petitioners have also referred to the provisions of Section 146A(2)(c) of the Customs Act and identical provision, that is, contained in Section 35Q(2)(c) of Central Excise Act, 1944 (in short the „Excise Act‟) as also in Section 83 of the Finance Act, 1994, which by incorporation, refers to, amongst others, to section 35Q of the Excise Act. The said provisions entitles a legal practitioner to appear as an authorized representative before an officer of the customs/excise/service tax or the Appellate Tribunal (i.e., the CESTAT) in any proceeding under the concerned Act, that is, the Customs Act, the Excise Act or even the Finance Act, 1994. 10 In so far as the fourth petitioner, Shri Rekhi, is concerned, it is contended that he was entitled to appear, act or plead before CESTAT in his capacity as an authorised representative, by virtue of the provisions of Section 146A(2)(d) read with Rule 9(e) of the Customs (Appeals) Rules, 1982; Section 35Q(2)(d) read with Rule 12(e) of the Central Excise (Appeals) Rules, 1982 and the Rule 2(C)(i) & (ii) of Customs Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982. It is contended that the right to practice before CESTAT stood vested in the petitioners which could not have been taken away WP(C) 6710/2007 Page 12 of 35 without the affected persons having knowledge of such a prohibition as contained in the impugned provision at the time when they accepted appointment to the CESTAT. 11 The petitioners attempted to demonstrate the anomaly in the amendment brought about by the Finance Act, 2007 by submitting that the provisions of sub-Section (1) to sub-section (5) of Section 129 deal essentially with the manner in which the Central Government would go about constituting the CESTAT, and the qualifications which would be required for being appointed as the judicial/ technical members, vice-president and the president of the CESTAT. Therefore, the impugned provision, that is, sub-section (6) to Section 129, which was, brought on to the statute book by virtue of the Finance Act, 2007 w.e.f. 11.05.2007 could not by incorporation or otherwise transpose the bar of the impugned provision into the definition of „Appellate Tribunal‟ as set out in Section 2(aa) of the Excise Act and Section 65(5) of the Finance Act, 1994 which were inserted in the respective statute much prior in point of time. In other words, the arguments made is as follows: (i) The definition of Appellate Tribunal which is contained in section 2(aa) of the Excise Act was inserted in the Excise Act by Act 44 of 1980 Section 50 and Schedule V w.e.f 11.10.1982. The said definition was amended to attain its present form by substitution of the WP(C) 6710/2007 Page 13 of 35 expression “service tax” in place of “Gold(Control)” by Act 32 of 2003 by Section 135 w.e.f. 14.05.2003. Similarly, the definition of Appellate Tribunal as contained in Section 65(5) was part of the parent statute, which was brought into force w.e.f. 01.07.1994. Given this position, the insertion of sub-section (6) in Section 129 of the Customs Act in May 2007 could not have telescoped, in manner of speaking, into the definition of Appellate Tribunal contained in Section 2(aa) of the Excise Act and Section 65(5) of the Finance Act, 1994, which have been on the statute book since 1982 and 1994 respectively. (ii) The petitioner thus contended that, in substance, the incongruity stands out, in as much as, the assuming without admitting that the provision is valid the petitioner will be barred for appearing before the CESTAT with respect to the matters arising out of the Customs Act only, and not in respect of those matters which pertain to the Excise Act and the Finance Act, 1994. They submitted that the said situation is not cured even if the regard is had to section 12 and Section 35D of the Excise Act. (iii) The learned counsel for the petitioners also sought to place reliance on the parliamentary debates with respect to the amendment brought about in Article 220 of the Constitution by the 7th Amendment Act of 1956, whereby the said Article was amended to restrict the bar on a permanent judge of a High Court to plead or act in any court or WP(C) 6710/2007 Page 14 of 35 before any authority in India, except the Supreme Court, to the court of which he was a permanent judge and the authorities over which that High Court exercised supervisory jurisdiction. (iv) The learned counsel for the petitioners submitted that the onus was on the respondents, that is, the State, to demonstrate the reasonableness of the restriction. It was also submitted that the respondents had failed to discharge this onus. In this regard, reliance was placed on judgment of the Supreme Court in Municipal Corporation of the City of Ahemdabad & Ors vs Jan Mohammed Usmanbhai & Anr. (1986) 3 SCC 20, Saghir Ahmed & Anr. Vs State of U.P. & Ors. AIR (1954) SC 728 and M/s Laxmi Khandsari & Ors. vs State of U.P. & Ors (1981) 2 SCC 600. SUBMISSIONS ON BEHALF OF THE RESPONDENTS 12 The learned Additional Solicitor General, Sh. P.P. Malhotra who appeared on behalf of the respondents took us through the brief history which led to the insertion of the impugned provision in the Customs Act. It was pointed out that in 1986 the Parliament enacted the Customs and Excise Revenue Appellate Tribunal Act of 1986 (in short the „CERAT Act‟) for the purposes of setting up a Tribunal in consonance with the power contained in Article 323B of the Constitution of India. The CERAT Act not only contained a provision whereby jurisdiction of all courts (including the High Court) save and WP(C) 6710/2007 Page 15 of 35 except the Supreme Court was excluded, but also Section 11(c) which barred the president or a member from appearing, acting or pleading before the Appellate Tribunal or the CEGAT. The Supreme Court in the case of L. Chandrakumar vs UOI: (1997) 3 SCC 261 declared as an unconstitutional Clause 2(d) of Article 323A and Clause 3(d) of Article 323B of the Constitution which, inter alia, vested power in the Central and the State Governments to constitute Tribunals over which the Supreme Court‟s jurisdiction under Article 32 and that of the High Court jurisdiction under Articles 226 and 227 of the Constitution stood excluded. This led to the recommendation for repeal of CERAT Act, which was eventually brought about in 2004. 13. The learned ASG took us through the file notings of the Government of India which established that the issue of appearance by president/vice-president/members of CESTAT on demitting before the CESTAT was discussed at highest level through out 2005 till the insertion of the impugned provision in May, 2007. Towards this end, the Government of India had also sought the input of the president of the CESTAT, Justice R.K. Abhichandani, who recommended that the provisions of Section 11(c) in the repealed CERAT Act should be brought into force immediately. Inputs were also sought from the Ministry of Law as well as the Department of Personnel and Training. WP(C) 6710/2007 Page 16 of 35 14. The learned ASG also brought to our notice an inter- departmental letter dated 20.09.2007 exchanged between the Ministry of Law and Justice, Department of Legal Affairs and the Department of Revenue‟ which suggested that the Government was in principle agreed that steps should be initiated to bring about a suitable amendment so that similar bar could be incorporated in the Income Tax Act, in respect of, members of the Income Tax Appellate Tribunal. 15. The submission of the learned ASG was, in a nut shell that, this was an aspect which was pending consideration since 1986 and for one reason or the other, it could not be brought on the statute book. His submission was that this was not as if it was a complete bolt from the blue as sought to be portrayed by the petitioners. As a matter of fact, the Government, according to him, was contemplating such like amendment in other pari materia statutes, in consonance with, the provisions of Section 129(6) of the Customs Act. He also drew our attention to the provisions of Section 11(f) of the Administrative Tribunal Act, 1985 and submitted that the terms and conditions of the Railway Tribunal contained similar provisions which barred members and the chairman of such tribunals from appearing, acting or pleading before the tribunal of which a person was a chairman or a member. WP(C) 6710/2007 Page 17 of 35 16. The learned ASG submitted that the right to practice a profession can be regulated and a regulation by itself unless completely unreasonable, would not be violative of any fundamental rights of the petitioner. In this regard, he placed reliance on the judgment of the Supreme Court in Devata Prasad Singh Chaudhuri & Ors vs Hon’ble the Chief Justice and the Judges of the Patna High Court AIR (1962) SC 201. 17. It was thus contended that the bar against the appeals before the CESTAT could not be held to be unreasonably restrictive in view of the fact that the petitioners on account of their expertise were free to appear before superior forums all over the country, that is, the High Court to which an appeal under the respective statutes‟ lies against the orders of the CESTAT, as also, the Supreme Court. 18 It was also submitted on behalf of the respondents that the contention of the petitioners‟ that the provision could not be made applicable to them in view