What Is the Finance Act, 2017 About?
Finance Act, 2017 is a parliamentary law in the process of the Union Budget. Although the Finance Acts mainly concern taxation issues, they more often than not modify other legislations to introduce policy and structural changes.
The Finance Act, 2017 is especially significant to the tribunal practice due to the amendments which it made to the organization, jurisdiction, and operations of different tribunals, including the changes which are applicable to the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). It also made some changes to the various statutory provisions to shed light on the appellate forums and permitted tribunal governance to be altered.
Reason behind the introduction of the Finance Act, 2017?
Finance Act is presented annually to enforce the financial and economic policy of the Government with the help of tax and other related legal modifications.
The non-tax measures of the Finance Act, 2017 were proposed to:
● Optimize and liberalize the tribunal system.
● Lessen tribunal proliferation.
● Explain jurisdiction of appeal.
● Establish consistency in appointments and terms of service of members of the tribunal.
● Enhance efficiency in the resolution of disputes.
These reforms were being done to modernise the tribunal structure to match the Indian changing regulatory and commercial landscape.
Who Does the Finance Act, 2017 Apply To?
The applicable section(s) of the Finance Act, 2017 are applicable to:
● Appellate institutions like NCLT and NCLAT.
● Tribunal officers and members.
● Enterprises and companies that engage in regulatory litigation or appellate litigation.
● Parties whose cases are heard in courts.
● Lawyers before NCLT, NCLAT and others.
These amendments may have implications on any party subject to the jurisdiction of tribunal or appellate schemes.
What Are the Key Provisions?
1. NCLAT Appellate Jurisdiction.
● Some amendments made it clear that NCLAT has the appellate jurisdiction of the decisions governed by given acts like the Competition Act, 2002.
● NCLAT is to hear appeals against the orders of Competition Commission of India.
2. Tribunal Rationalisation
● A number of tribunals that were in place were merged or reorganized.
● The roles of certain tribunals were devolved to other entities.
3. Tribunal Administration Rule-Making Authority.
● The Central Government had the authority to establish guidelines on:
○ Members of a tribunal are entitled to qualifications.
○ Appointment procedures
○ Term of office
○ Salaries and allowances
○ Removal and resignation
4. Procedural Uniformity
● Rather than individual offers in both parent Acts, a unified framework was suggested in the management of tribunals.
How Does It Work in Practice?
Practically, the Finance Act, 2017 has had the following impact on the work of the tribunal:
● In competition law cases, the appeals are filed at NCLAT and thus it is the main appellate Court.
● The amendments make the appellate structure that litigants and practitioners should follow.
● The rules that govern tribunal administration and composition are put within the context of the Act.
● Some of the provisions have been judicial scrutinized and this has impacted on their application.
Such reforms affect the process and place of dispute litigation instead of the changing rights content.
What Does this Impact on Companies or Individuals?
The Act has concrete implications on the businesses and litigants:
● The firms should know where to appeal in cases of dispute over regulations.
● NCLAT will have a broader jurisdiction which has to be considered in litigation strategy.
● Administrative rules can modify tribunal proceedings and composition.
● There were areas that saw legal certainty, and others that were experiencing transitional issues.
All in all, the Act is instrumental in designing dispute resolution by the tribunals.
Example
The Competition Commission of India fines a company in case of anti-competitive behaviour by the company. In line with the amendments placed in the Finance Act, 2017, the company submits an appeal to the NCLAT, which is mandated to listen and make decisions on the competition law appeals.
This guarantees an effective appeal pathway and prevents confusion as to the right forum.
The importance of this Act / Rule to NCLT / NCLAT cases.
The Finance Act, 2017 has significance to the practice of the NCLT and NCLAT in the sense that:
● It expands and clarifies the area of authority that NCLAT has over regulation issues.
● It influences the organization and management of tribunals.
● A lot of procedural and jurisdictional challenges before tribunals are as a result of these amendments.
● This Act contributes to tribunal reforms that can affect the timelines of litigation and the strategy of appeal.
These are important provisions to be understood in order to practice tribunals.
Frequently Asked Questions (FAQ)
Q1. Is it all about taxation in the Finance Act, 2017?
No. Although it is mainly concerned with taxation, it also brought in some dramatic changes that concerned the tribunals and appellate bodies other than taxation.
Q2. Does the Act impact on NCLT?
It largely influences the system of appeal and the management of courts instead of day-to-day operations of NCLT.
Q3. In this Act what forum appeals in competition?
The NCLAT hears appeals by Competition Commission orders.
Are the rules of the appointment of tribes under the Act fixed?
The Act allows the government to frame rules, which is applied to in a judicial interpretation and subsequent rule-making.
Q4. So, what is the relevance of this Act to legal practitioners?
Since it defines the appellate jurisdiction, tribunal arrangement, and frame that tribunal litigation ought to follow.
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