The government on Friday cleared the long-awaited proposal to set up a National Tax Tribunal to reduce the burden of pending cases in high courts and to ensure uniformity in administration of tax laws.

The decision was taken at the Cabinet meeting chaired by Prime Minister Atal Bihari Vajpayee.

Twenty-five benches are proposed to be set up under the National Tax Tribunal at a cost of Rs 7.88 crore (Rs 78.8 million), Parliamentary Affairs Minister Sushma Swaraj said.

She said the tribunal would consist of a chairperson and a number of judicial and technical members. The chairperson would be a retired judge of the Supreme Court or a retired chief justice of high court.

The chairperson will hold office for five years or till he/she attains the age of 68 years, while the retiring age for other member would be 65 years.

The chairperson and members would be selected by a selection committee consisting of Chief Justice of India or his nominee, law secretary and revenue secretary.

An appeal issuing from an order passed by Income Tax Appellate Tribunal and Central Excise and Sales Tax Appellate Tribunal would come to the National Tax Tribunal only on substantial question of law.

The proposed law seeks constitution of special bench consisting of five members to resolve conflicting decision of question of law between different benches of the tribunal which will have the powers of contempt.

The rate of disposal of pending cases before high courts was slow enough to be equivalent to five years workload, making the setting up of the tribunal necessary, Swaraj said.

Many a times the decisions of a high court vary from the others', creating uncertainty, delays and problems in the administration of tax laws.

At present, about 28,000 cases are pending in various high courts which have a disposal rate of 6,000 cases per year.

The Chowksi Committee had also recommended the setting up of a central tax court with all-India jurisdiction to appeal with litigation to the exclusion of the high courts.

The Law Commission of India had in its 115th report on 'Tax courts' had also recommended setting up of the Central Tax Court having all India jurisdiction.