The Supreme Court today declared as unconstitutional the National Tax Tribunal Act under which a tribunal was set up to decide tax-related cases by taking away jurisdiction of high courts in such matters.

A five-judge constitution bench headed by Chief Justice R M Lodha said that the Act passed by Parliament in 2005 is "unconstitutional" as the National Tax Tribunal (NTT) encroaches upon the power of higher judiciary, which can only decide issues involving substantial laws and not a tribunal.

The apex court passed the order on a batch of petitions challenging the constitutional validity of NTT contending that there was a grave danger that judiciary will be substituted by a host of quasi-judicial tribunals which function as departments of various ministries.

The first petition on the issue was filed in 2006 when the Madras Bar Association had challenged the setting up of NTT and later many other lawyers bodies followed suit.

The NDA government had justified the creation of NTT, saying that the idea of creating tribunals was to unclog the backlog of cases in the high courts.