Government on Thursday paved the way for setting up a National Tax Tribunal with 25 benches by approving a legislation for this purpose.

Announcing the Union Cabinet decision, Finance Minister P Chidambaram said the tribunal was being set up for speedy disposal of tax cases running into thousands in the high courts.

A fresh Bill would be introduced in Parliament to set up NTT, which would replace jurisdiction of high courts in tax matters and have a chairman and two judicial members each in the 25 benches, equivalent to the number of high courts in the country.

The National Democratic Alliance government had brought in a Bill, which lapsed with the dissolution of the previous Lok Sabha.

Chidambaram also announced that the Cabinet has approved yet another Delegated Legislation Provisions (Amendment) Bill.

Sources said the chairperson would be a retired judge of the Supreme Court or a retired Chief Justice of high court and will hold office for five years or till 68 years, while the retirement age for other members would be 65 years.

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

The whole exercise of setting up a NTT and 25 benches is expected to cost about Rs 8 crore (Rs 80 million).

An appeal issued 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.

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