One Commission, Two Tribunal Systems: The Tribunals Reforms Act, 2026

For a taxpayer or a company in dispute, the tribunal is usually the last forum that examines the facts. Who sits on it, for how long, and on whose recommendation, therefore shapes outcomes as much as any substantive provision. The 2026 Act finally answers a fifteen-year line of Supreme Court rulings for sixteen tribunals. It does not answer it for the two forums where most new tax and corporate disputes are now heading.

01Fifteen years of the same argument

The Tribunals Reforms Act, 2026 received assent on 13 August 2026 and came into force on 25 August 2026.¹ It is Parliament’s latest attempt, after the Finance Act, 2017, the 2021 Ordinance and the 2021 Act, to settle how tribunal members are chosen and how long they serve. It arrives nine months after the Supreme Court, in the latest decision of the Madras Bar Association line, struck down the core of the Tribunals Reforms Act, 2021 as a re-enactment of provisions the Court had already invalidated.² The Chief Justice described the 2021 law as re-enacting those provisions “in another avatar”; the concurring opinion called it “old wine in a new bottle”.

The principles have been stable since 2010. When Parliament moves adjudication from the High Courts to tribunals, the tribunals must carry the independence of the courts they replace.³ The Court has since applied that idea to the composition of the NCLT, to the National Tax Tribunal and to selection committees dominated by the executive.⁴ In Rojer Mathew, a Constitution Bench struck down the 2017 Rules made under the Finance Act, 2017.⁵ In 2020 it laid down specific terms: a five-year tenure, retirement at 70 and 67, one name per vacancy with a waitlisted alternate, appointment within three months, eligibility for advocates of ten years’ standing, and a National Tribunals Commission.⁶ When an ordinance in 2021 reintroduced a minimum age of fifty, the Court set it aside as an attempt to get around those directions.⁷ In November 2025 it gave the Union four months to constitute the Commission.⁸

Against that history, the question for a litigant is not whether the 2026 Act is a reform. It is. The question is how much of the Court’s design it actually adopts, and where it leaves the old problems in place.

02What the Act changes

A Commission that runs selections

The centrepiece is the National Tribunals Commission. It has a Chairperson, who must be a former Supreme Court Judge or a former Chief Justice of a High Court, two Judicial Members drawn from the High Court bench and two Technical Members with at least twenty-five years of relevant experience.⁹ The Chairperson and Judicial Members are appointed by the Central Government after consulting the Chief Justice of India. The Commission conducts selections through Search-cum-Selection Committees, reviews the performance of tribunals, oversees inquiries into complaints against members and maintains a National Tribunals Data Grid.

One name, a waitlist and a deadline

Each committee recommends one person for each vacancy and one additional name for a waiting list. The Secretariat must forward the recommendation within three days, and the Central Government must act on it within three months.¹⁰ This replaces the two-name panel of the 2021 Act, which left the final choice with the Government. It does not, however, say what follows if the Government simply does not act within the three months.

Tenure and removal

A chairperson holds office for five years or until 70, and a member for five years or until 67, whichever is earlier, with eligibility for reappointment on the basis of past performance.¹¹ There is no minimum age. Removal is possible on familiar grounds such as insolvency, conviction for an offence involving moral turpitude and incapacity, and, for chairpersons and members of tribunals (though not for members of the Commission itself), on two further grounds: being found “incompetent or inefficient” and taking up a paid assignment during the term. Complaints on the discretionary grounds go through a preliminary inquiry by the parent ministry, then an inquiry by the Commission, before the Government decides.¹²

Transition

The 2021 Act is repealed. Chairpersons and members appointed under the parent statutes on or before 1 October 2021 keep the pay and service conditions of those statutes. Those appointed under the 2021 Act from 4 April 2021 until commencement serve five years from appointment or until the applicable age, whichever is earlier, and their terms cannot be altered to their disadvantage. Selection committees already constituted under the 2021 Act may complete their work, and appointments made on their recommendations are deemed to be made under the new law.¹³ The Data Grid, a single repository of case information for all covered tribunals, is perhaps the least discussed and most practically useful change.¹⁴

03The rules of 30 September 2026

The Act leaves qualifications, pay and most service conditions to rules. These were notified on 30 September 2026.¹⁵ For tax practitioners, three features stand out. First, an advocate with ten years of substantial litigation experience in indirect tax before CESTAT, a High Court or the Supreme Court is eligible for appointment as a Judicial Member of CESTAT, and a chartered accountant with ten years of practice is eligible as an Accountant Member of ITAT. Second, selection is meant to test the work itself: committees are to use at least two methods, which may include an evaluation of judgments or orders, a review of submissions in litigated matters, a personal interaction and an order-writing exercise. Third, the Secretariat must begin filling a vacancy at least six months before it arises.

The rules also fix pay at Rs 2.50 lakh a month for chairpersons and Rs 2.25 lakh for members, subject to stated exceptions, and impose two restrictions that will matter to the Bar. A member may not practise before the same tribunal after demitting office, and for two years may not take employment with a party to proceedings before that tribunal.

The test of the 2026 Act is not the Commission it creates.

04What remains open

Three structural questions survive the new Act. The first is the reliance on rules. Section 14 allows qualifications, appointment terms and service conditions to be prescribed notwithstanding the parent statute, and section 20 gives the Central Government the rule-making power.¹⁶ The Madras Bar Association rulings were triggered precisely by rules that diluted judicial character, and a future amendment of the 2026 Rules could reopen the same dispute without any change to the Act.

The second is the meaning of consultation. The Chairperson and Judicial Members of the Commission are appointed after “consulting” the Chief Justice of India.¹⁷ The Act does not say whether the Government can depart from the Chief Justice’s view, and the answer will likely emerge only in the first disagreement.

The third is control of the machinery. The Secretariat is headed by a Secretary-level officer of the Government, a Government Secretary sits on every selection committee, and the parent ministry, which is often the litigant before the tribunal, conducts the first inquiry into complaints against members.¹⁸ The vague grounds of incompetence and inefficiency make that screening role more significant. None of this makes the Act invalid. It does mean that independence will depend on how the Act is administered as much as on its text.

05The GST Appellate Tribunal sits outside

The First Schedule lists sixteen tribunals. It includes ITAT, CESTAT, NCLAT and SAT. It does not include the Goods and Services Tax Appellate Tribunal, and the Statement of Objects and Reasons offers no explanation.¹⁹ For GST practitioners this is the most consequential feature of the Act, because GSTAT is where the first wave of second appeals under GST is now being heard.

GSTAT therefore remains governed by section 110 of the CGST Act. That provision, substituted by the Finance Act, 2023 and amended in December 2023, retains three features the Supreme Court has rejected for other tribunals: a minimum age of fifty for the President and Members, a four-year term, and a panel of two names for each post, recommended notwithstanding any other law or court order.²⁰ The Revenue Secretary of the Ministry of Finance is the member-secretary of the selection committee for the Principal Bench and for most posts.²¹ In TLC’s assessment, these provisions are exposed to challenge on the reasoning of the Madras Bar Association decisions. That does not affect the validity of GSTAT orders today, and no court has so held. Challenges to sections 109 and 110 were filed in the Supreme Court in 2023, and we have not seen a final decision on them.²² But a GST appeal strategy that assumes the present composition and terms of GSTAT will remain unchanged over the life of a long dispute would be imprudent.

TLC summary from the Tribunals Reforms Act, 2026, the CGST Act, 2017 and the Companies Act, 2013. Rows marked “No” are outside the 2026 framework.

06NCLT: the appeal is in, the trial forum is out

The same pattern repeats in corporate law. NCLAT is covered through a substituted section 417A of the Companies Act, 2013, but the NCLT is not.²³ NCLT members continue under section 413, with a five-year term and retirement at 65 for members. The forum that hears insolvency petitions, schemes of arrangement and oppression and mismanagement cases at first instance thus remains outside the Commission’s selection process, its performance review and its Data Grid, while the appellate tier above it is inside. The 2021 Act made the same choice, and neither law explains it.

07What it means for litigants

Nothing in the Act unsettles decided cases or pending proceedings. Acts of the Commission and appointments are not invalid merely because of vacancies or defects in constitution, and section 6 of the General Clauses Act preserves what was done under the repealed law.²⁴ Arguments that a pending appeal is vitiated by the 2021 regime are unlikely to succeed.

The real effects are practical. If the Commission works as designed, selections will start six months ahead of vacancies and appointments will follow within three months of recommendation, which should reduce the bench shortages that have stalled hearings at ITAT, CESTAT and NCLAT. The Data Grid should make pendency and disposal patterns visible for the first time, which matters when advising a client on how long an appeal will take and whether interim relief from a High Court is worth seeking. For GST and NCLT matters, none of this applies yet.

08The next test

The 2026 Act is a serious response to the Supreme Court, and on tenure, age, the single-name recommendation and the existence of a Commission, it largely complies. Its success will turn on three things the text cannot guarantee: whether vacancies are actually filled within the timelines, whether future rules keep faith with the Act, and whether Parliament extends the same framework to GSTAT and the NCLT. Until it does, India will run two tribunal systems, and tax and corporate litigants will need to plan for both.

About the authorSumit KumarFounder, The Lord’s Consultancy · Corporate, Taxation & Regulatory Lawyer

Advises on direct tax, indirect tax and corporate law, and appears before Appellate Tribunals, the High Courts and the Supreme Court.