SC Stays Retirement of 4 Retiring CESTAT Members, Calls Superannuation “Fully Unjust”

The Supreme Court on Thursday ordered the four judicial members of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), who were due to retire this year, will remain in service till it decides pleas challenging provisions of the Tribunals Reforms Act, 2021, terming their superannuation “fully unjust”.

Four judicial members of CESTAT- P Dinesha, Ajay Sharma, Rachna Gupta and Suvendu Kumar Pati, who originally hailed from district judiciary, had joined the tribunal under the old law, and as per the term of appointment, they were to retire at the age of 62 years.

However, under the Tribunals Reforms Act, 2021, the tenure of a judicial member has been fixed at four years and this has led to a situation where the services of the four judicial members will lapse on April 18, May 1, 3 and 9 respectively.

“In view of the …circumstances, we are of the considered view that it will be fully unjust to allow the tenure of the four judicial officers to lapse between April 18 to May 9, 2023. Though, some of them may have applied for selection in pursuance of the limited vacancy circular, this cannot deprive them of the right that they are entitled to continue until the age of 62 years particularly in view of the order of this court dated 21 August, 2018,” the bench ordered.

“We accordingly direct the four judicial officers… shall remain in service pending the final disposal of the writ petition (of Madras Bar Association),” the bench said, adding these judicial members cannot be “left in lurch”.

The apex court also listed the plea of the Madras Bar Association challenging several provisions of the Tribunals Reforms Act, 2021 for July 11, 2023 and asked the counsel concerned to file their written submissions for final disposal on the next date of hearing.

At the outset of the hearing, senior advocate Mukul Rohatgi, appearing for the judicial members, said two of these officers were district judges and had left their job to join the CESTAT.

“When they were appointed in 2018, their tenure was to be 5 years or retirement at the age of 62 years whichever is earlier,” he said, adding now their premature retirement will be “completely illegal and violative of earlier judgments”.

Another senior advocate Arvind Datar, who has been appearing in the case, said what was happening was “unfortunate” as the government brought back the same provisions in the new law which were earlier set aside by the top court.

The bench found force in the submissions and said the selection of the four CESTAT members was governed by the 2016 rules under the parent statute and hence they will be allowed to continue in service till the main case is decided.

The main petition challenged the Tribunals Reforms Act, 2021 to the extent it amends Sections 184 and 186 of the Finance Act, 2017.

Sections 184 and 186 of the Finance Act 2017 give the central government rule-making power in relation to the mode of appointment, terms of service and allowances of the members of various tribunals.

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