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Supreme Court Strikes Down Rules Framed Under Section 184 Of Finance Act

By Lawstreet News Network      Nov 14, 2019      0 Comments

A Constitution Bench of the Supreme Court today (November 13, 2019) has struck down the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017,framed by the Central Government by virtue of Section 184 of the Finance Act, 2017.

While upholding thesection which entitles the Central government to frame rules to determine appointment, service conditions, removal and other aspects of tribunals, the Bench of Chief Justice of IndiaRanjan Gogoi and JusticesN.V. Ramana, D.Y. Chandrachud, Deepak Gupta and Sanjiv Khanna has struck down the rules formulated under it and ordered the government to reframe the rules. 

The Bench said the appointments to tribunals shall be on the basis of existing statutes and not the rules framed under the Finance Act of 2017.

Wrapping the hearing, the Court ordered that validity of passage of Finance Act 2017 as Money Bill should be decided by a larger Bench.

The judgment was rendered in a batch of petitions challenging the Finance Act, 2017 particularly Part XIV on various grounds. Part XIV of the Finance Act repealed substantive provisions relating to the administration of 26 Tribunals established and codified under 26 diverse Central Laws. As a substitute, by virtue of Section 184, the Central Government was given the powers to frame rules in this regard.

The challenge to the Finance Act, 2017, was on the grounds that it was passed as a Money Bill.

Money Bills are those which exclusively contain provisions for imposition of taxes and appropriation of money out of the Consolidated Fund of India. The petitioners had argued that the passage of the Finance Act in the form of a Money Bill amounted to a fraud on the Constitution since they can only be introduced in the Lok Sabha. The Rajya Sabha can only recommend amendments.

In the present case, all the suggestions made by the Rajya Sabha regarding the Bill passed in the Lok Sabha were junked, and the Act came into force on April 1, 2017.

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