SC rejects petition on alleged abuse of duty-free vehicle permits

By S.S. Selvanayagam

The Supreme Court yesterday (15) disallowed the writ petition on the alleged abuse of the tax-free vehicle permit scheme for Parliamentarians and Ministers.

The bench comprised Chief Justice Priyasath Dep and Justices Upaly Abeyrathne and Anil Gooneratne.

Senior Deputy Solicitor General Viraj Dayaratne submitted that the investigation has commenced and was in progress. He said that after the completion of the investigation the commission had to decide what steps should be taken.

A public interest litigation activist Nagananda Kodituwakku filed the writ application seeking the Supreme Court to compel the Bribery Commission to initiate an investigation into his complaint against the alleged abuse of the tax-free vehicle permit scheme for parliamentarians and ministers.

The petitioner, who is a former Head of the Customs Revenue Task Force, has alleged that certain parliamentarians and ministers have patently abused their public office to defraud the Government of tax revenue for their personal enrichment.

 He cited the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), its members, its former Director General, State Minister of  Finance Lakshman Yapa Abeywardena, parliamentarians, the General Secretary of the UNP and Minister of Public Enterprise Development Kabir Hashim, the Prime Minster and the Attorney General as respondents. Deputy Solicitor General Viraj Dayaratne appeared for the Attorney General.

He stated that the law requires every person elected or appointed to public office to uphold and defend the Constitution and preserve and protect public property and combat the misuse and waste of public property with due respect to the rights and freedoms of others.

 He said the deception of the country’s citizenry has become customary for dishonest politicians.

 He stated that as a result of the abuse of tax-free permits offered to MPs, he discovered that the Government had been incurring a colossal loss of revenue under the previous administration of Mahinda Rajapaksa and a formal complaint was made on 11 December 2014 at CIABOC to initiate an investigation into the matter. 

These losses amounting to over Rs. 40 billion a year were evidenced in the content of the first fiscal policy statement (Budget speech for 2015-2016) made in Parliament on 20 November 2015, by the 83rd Respondent, the Minister of Finance, where it was proposed to abolish such schemes altogether.

He stated the issuance of tax-free permits to MPs by the Secretary to the Ministry of Parliamentary Reforms and Mass Media commenced in February 2016 with no legal authority conferred on him to grant any such exemption.

He added that the Excise Act (Section 3C) permits the Minister to grant tax exemptions only for the economic development of the country. Parliamentarians’ permits have also been issued with the aim of realising this objective, enabling them to use these vehicles to discharge their office efficiently and effectively for public good.

He alleged that MPs who have sold their permits have patently violated the law and that the Minister has intentionally avoided the inclusion of this statutory stipulation in the gazette notification (No. 1965/2 of 2 May 2016), enabling the dishonest MPs to sell the permit in the open market and share the defrauded tax component with the motor trade.

Section 3C (3) also requires that in the event of the sale or disposal of any goods imported tax-free, to obtain prior approval and pay all levies prior to the sale or disposal of any such goods, he said.

None of the MPs have adhered to this statutory stipulation and have openly abused the permits for unjust enrichment whilst the CIABOC was made to condone this breach of law, he alleged.

Some of the vehicles imported under the parliamentarians’ tax-free permits are registered in the name of the permit-holding MP and are being used by those who have bought the permits and imported the vehicles, he stated.

The sharing of defrauded Government revenue between the importer and the parliamentarian is not only ethically wrong but also amounts to the breach of Section 3 (g) of the of Fiscal Management (Responsibility) Act, he pointed out.