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SC imposes highest court costs of Rs 1m while dismissing FR petition
The Supreme Court, unanimously, dismissed a Fundamental Rights (FR) Petition of a vehicle importer, against the Sri Lanka Customs (SLC), and ordered the petitioners to pay Rs 1 million in court costs, which is the highest court cost ordered in the country’s Legal history.
In its verdict, the 3-Judge Bench of the Supreme Court comprising Justices Vijith Malalgoda, Buwaneka Aluwihare and Prasanna Jayawardena, ruled that the Petitioners had failed to establish that, their FR, guaranteed under Articles 12 (1), 13 (1) and 13 (4) of the Constitution, have been infringed by the Respondents.
The Petitioners, JPC Trade Co. Ltd and its Country Manager R. Lahiru Rakshitha, who were the 1st and 2nd Petitioners respectively, had stated that SLC, following an investigation into the importation of vehicles into Sri Lanka by several Japanese exporters, had imposed a penalty of Rs 6 million on JPC Trade Co. Ltd. for undervaluing 16 vehicles. However, the Petitioners had submitted that the said vehicles had been imported by a Leasing Co. and that, the 1st Petitioner had no reason to undervalue the said vehicles. Therefore, they had argued that it is the importer who is liable, as per Section 129 of the SLC Ordinance, as the importer has a duty to declare the value of the imported goods and also to pay taxes as required under such Ordinance or any other Law.
In his affidavit submitted to court, the Director General of SLC, who was the 1st Respondent, had taken up the position that, “During the course of audit control, the Port Control Branch of the SLC suspected a loss of revenue due to undervaluation of vehicles imported to Sri Lanka. Accordingly, investigations conducted with regard to several imports into Sri Lanka by Japanese exporters, including JPC Trade Co. Ltd., revealed that declaration on the vehicles imported reflected the transaction price as much lower than the actual price. It also revealed that most of the pro forma invoices with regard to the said vehicle imports were issued by the local office of these companies, for establishing letters of credit. A pro forma invoice is a preliminary Bill of Sale sent to buyers in advance of a shipment or delivery of goods. The remaining component of the transaction price had been paid under the description of ‘Local Handling Charges’, ‘Warranty Fee’ and ‘Advance Payments’.”
“By using this method, the vehicle importers, with the help of the exporter, had defrauded the SLC and the tax base had been considerably and unlawfully reduced, resulting in the underpayment of applicable customs duties and other levies for the imported vehicles.”
The court, in its judgement, had noted that, though the Petitioners had been silent on their involvement in defrauding SLC using this method, the 2nd Petitioner, whilst making a statement to SLC during its investigation, had admitted undervaluing vehicles exported by his Co. and sending the balance to Japan through their local agent. According to the 2nd Petitioner, when the agent deposited the money in the 1st Petitioner’s Japanese bank account, a picture of the Deposit slip is sent to him, in order to prove the transaction. Several such photographs were collected during the investigation conducted by the SLC officials, and those photographs were produced in the court.
“When going through the material placed on behalf of the Respondents, it is clear that the aforesaid conduct of the Petitioners resulted in a loss to SLC,” the Judges observed. “In order to sustain the plea of discrimination based upon Article 12 (1), a party will satisfy the court about two things, namely (1) That he has been treated differently from others (2) That he has been differently treated from persons similarly circumstanced, without any reasonable basis,” the Judges pointed out.
“But the equal treatment guaranteed by Article 12 is equal treatment in the performance of a lawful act. Via Article 12, one cannot seek the execution of any illegal or invalid act,” the Judges stated. The court added it appears that, when coming before the court, the Petitioners have deliberately suppressed their involvement in submitting pro-forma invoices to undervalued amounts. “By suppressing the said fact from this court, the Petitioners have presented a completely distorted version before this court,” the Judges stated.
Accordingly, the petition was dismissed and the Petitioners ordered to pay Rs 1 million as court costs.