Court restrains Customs from encashing Kusumsiri cheque

Tuesday, 5 October 2010 23:50 -     - {{hitsCtrl.values.hits}}

By S.S. Selvanayagam

The Court of Appeal made an order directing Customs to maintain the status quo until 3 November, thereby restraining Customs from encashing a Bank Guarantee issued by the Bank of Ceylon on behalf of Kusumsiri Motor Traders.

The Bench comprising Justices Sathya Hettige (President) and D.S.C. Lecamwasam making this interim order listed for mention on 2 March the Writ Application filed by W.G. Milton Perera and Eranga Perera who are carrying on the business in partnership of Kusumsiri Motor Traders.

Court also issued the order the issue of notice on all Respondents returnable on 11 November.

Petitioners cited the Director General of Customs, Deputy Director of Customs (Preventive) Athula Welikala, Sanath Fernando of Customs and the Bank of Ceylon as respondents.

Sanjeeva Jayawardena with Rajeev Amarasuriya instructed by Sudath Perera Associates appearing for the Petitioners supported an Application for interim relief against the Director General of Customs and the Bank of Ceylon.

He submitted that the Bank Guarantee was sought to be encashed against the petitioners without having had any recourse to any lawful inquiry and without having granted to the Petitioners any opportunities to defend their position and consequently a total violation of the principle of natural justice and the rule of law.

He also submitted that the Commissioner General of Customs did not have the jurisdiction to seek to recover VAT as had been held by the Supreme Court in case of Vallibel Lanka (Pvt) Ltd. vs the Director General of Customs and contended that it was only the Commissioner General of Inland Revenue who could seek to recover VAT.

Kusumsiri Motor Traders is a leading dealer in spare parts for power tillers commonly referred to in Sri Lanka as two wheel hand tractors used for farming.