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Cases against VAT: Interim relief on July 11
The Supreme Court on Wednesday decided to hear five fundamental rights pleas filed against the increase of Value Added Tax (VAT) and against the tax threshold and re-imposition of the Nation Building Tax (NBT) on the electricity and telecommunication sectors.
The Bench comprising Chief Justice K. Sripavan and Justice Buwaneka Aluvihare decided to fully hear the petitions on the basis there is a violation of fundamental rights at first sight.
The court reserved the order on the interim relief for July 11. The petitioners sought the court to stop the collection of VAT and NBT until the final determination of the rights pleas, as an interim relief.
The court also granted time till June 30 for the respondents to file limited objections to the interim relief.
The petitioners’ counter objections to be be filed on or before July 1.
National Freedom Front leader Parliamentarian Wimal Weerawansa, Ven. Madulu Oye Dammeeshwara Thera, Ven. Bengamuwe Nalaka Thera, S. Shiva Kumar and Nimal Karunasiri were the petitioners.
President’s Counsel Manohara de Silva appearing for Parliamentarian Wimal Weerawansa told court that Government should get the approval of Parliament before amending the tax revisions.
The PC alleged that without getting the approval from Parliament, the respondents started to collect the taxes from the people in violation of their fundamental rights.
He contended that there was only a mere Cabinet Paper with regard to the tax revisions and the particular revisions were not presented to Parliament.
Deputy Solicitor General (DSG) Farzana Jameel argued that the Attorney General had duly approved the process of tax amendments as constitutional. She further pointed out that the respondents were in the process of presenting the particular Bills to Parliament for its approval.
Answering a query from the Chief Justice that although the taxes were already being collected from people prior to Parliamentary approval, that was provided for by the Constitution, the DSG said.
Citing certain determinations by the Supreme Court, the DSG submitted, unlike any other laws, the fiscal laws could be retrospectively approved by Parliament. She also noted that since the introduction of the VAT it has been the practice to approve the tax revisions retrospectively and objected to the interim relief being granted to the petitioners.
She also argued the petitioner could not maintain his rights plea since he had failed to cite the Cabinet as a party although the Cabinet of Ministers had approved the decision to revise the VAT and NBT.
The DSG charged that the petitioner had come before the court without the knowledge that there was a Cabinet approval for the decision.
The petitioner cited Finance Minister Ravi Karunanayake, Treasury Secretary R.H.S. Samarathunga, Inland Revenue Commissioner General Kalyani Dahanayake and the Attorney General as respondents.
President’s Counsel Manohara de Silva with Kanishka Vitharana appeared for the petitioner.
DSG Farzana Jameel with State Counsel Dr. Avanthi Perera appeared for the respondents.