Appellate Authority u/s 45 AA: Part IV: A comparison with IT Act and EPF Act!

When the authorities want to add a provision for Appellate Authorities in a statute, they would ensure the following:
The Principal Act would specify the
Constitution of the Appellate Authority and Powers of the Appellate Authority very clearly. It would, generally, leave the Procedure to be codified through subordinate legislation.

  1. The provisions pertaining to the E.I. Court fulfill this requirement.
  2. The Income Tax Act and the EPF Act also fulfill this requirement.
  3. But, the hastily prepared, loosely worded Sec. 45 AA pertaining to the creation of the Appellate Authority under the ESI Act does not fulfil this requirement.

This Section is totally flawed and there was no one to care for even when the matter had been taken to their knowledge even during the pre-amendment period. The role of the bureaucrats of the Ministry of Law was shocking. The manner in which the Parliamentary Committee and the Members of Parliament approached the issue makes one wonder whether law-making process in the nation had become so ineffective and inefficient in the nation.


The ESI Act, Sec. 45 AA has left all the three aspects of law-making, the Constitution of the Authority, its Powers and the Procedure to be followed by it, to be done by subordinate legislation. But, even without any such legislation in the form of notified Rules by the Central Government or notified Regulations by the Corporation, the Hqrs. Office had issued administrative instructions on 04.11.2010 pertaining to all the aforesaid three aspects.


Was this action proper?


This, when the Sub-Committee of ESI Corporation to examine the need for amendments recommended appointment of Appellate Authority said, “
Similar provisions exist in case of Income Tax and EPF Act”. One wonders whether the Sub-Committee had really seen those Acts.

Excerpts from Item No. 11 of the Report of the Sub-Committee of ESI  Corporation on Amendments to the ESI Act, 1948

Excerpts from Item No. 11 of the Report of the Sub-Committee of ESI Corporation on Amendments to the ESI Act, 1948


It is a pity that the Parliament has been used for vesting arbitrary and unlimited powers to the authorities to appoint and regulate the Appointing Authorities under Sec. 45 AA.


Such vestiture is patently unlawful and the amendment itself was ultra vires of the Parliament.


Readers may compare Sec. 45 AA of the ESI Act with Sec. 7D to 7Q (especially 7D and 7E) of the EPF & MP Act. These two sections are reproduced here for the convenience of the readers:


EPF & MP Act:
7D. Employees’ Provident Funds Appellate Tribunal. – (1) The Central Government may, by notification in the Official Gazette, constitute one or more Appellate Tribunals to be known as the Employees‟ Provident Funds Appellate Tribunal to exercise the powers and discharge the functions conferred on such Tribunal by this Act and every such Tribunal shall have jurisdiction in respect of establishments situated in such area as may be specified in the notification constituting the Tribunal.
(2) A Tribunal shall consist of one person only to be appointed by the Central Government.
(3) A person shall not be qualified for appointment as a Presiding Officer of a Tribunal hereinafter referred to as the Presiding Officer, unless he is, or has been, or is qualified to be, –
(i) a Judge of a High Court; or (ii) a District Judge.
7E. Term of office. – The Presiding Officer of a Tribunal shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of sixty-two years, whichever is earlier.
The readers may compare Sec. 252 , Sec. 253 and from Sec. 254 to Sec. 260 of the Income Tax Act with Sec. 45 AA of the ESI Act.

Income Tax Act:

252. (1) The Central Government shall constitute an Appellate Tribunal consisting of as many judicial and accountant members as it thinks fit to exercise the powers and discharge the functions conferred on the Appellate Tribunal by this Act.

 95[(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 96[Indian] Legal Service and has held a post in Grade 97[II] 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.

Explanation.—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 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.

(2A) An accountant member shall be a person who has for at least ten years been in the practice of accountancy as a chartered accountant under the Chartered Accountants Act, 1949 (38 of 1949), or as a registered accountant under any law formerly in force or partly as a registered accountant and partly as a chartered accountant, or who has been a member of the Indian Income-tax Service, Group A and has held the post of [Additional] Commissioner of Income-tax or any equivalent or higher post for at least three years.]

 [(3) The Central Government shall appoint the Senior Vice-President or one of the Vice-Presidents 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.]

 [(4A) The Central Government may appoint one of the Vice-Presidents of the Appellate Tribunal to be the Senior Vice-President thereof.]

 (5) [The Senior Vice-President or 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.
So much for the lawmaking process, when it came to Sec. 45 AA!

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1 Comment

Filed under Amendments 2010

One response to “Appellate Authority u/s 45 AA: Part IV: A comparison with IT Act and EPF Act!

  1. VAANDU

    In our country, procedures not followed/devised, ‘power’ dominates CONSTITUTION !!!!!!!!! –

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