By S.S. Selvanayagam
When the petition challenging the new Bill titled ‘Inland Revenue Amendment’ to amend the Inland Revenue Act came up before the Supreme Court on Monday, Counsels for the Petitioners suggested proposals to make the Bill consistent with the Constitution.
The Attorney General (AG) indicated that the proposals would be taken for consideration. Proceedings resumes today.
Three petitions including that of a senior Professional in Auditing, Taxation and Financial Consultancy and Bar Association of Sri Lanka were taken up before the Bench comprising Justices Priyantha Jayawardena, L.T.B. Dehideniya and A.L.S. Gooneratne.
During the course of the submissions, President Counsel Dr. K. Kanag Iswaran and Faisz Musthapha informed court as Follows:
If Clause No. 47 and Clause No. 40 are amended as suggested by them, alleged infringement would cease to be inconsistent with the Constitution.
A senior Professional in Auditing, Taxation and Financial Consultancy Raja Nihal Hettiarachchi, BASL and one more petitioner challenge the Constitutionality of the new Bill titled ‘Inland Revenue Amendment’ to amend the Inland Revenue Act.
Petitioner Raja Nihal Hettiarachchi claims the petition is filed in the interest of the protection of the rights of the taxpayer and of all citizens vis-à-vis due process and a fair and equitable taxation regime.
Clause 47 seeks to make the Commissioner General the Prosecutor, the Judge, the Jury and the Executioner, he impugns.
Clause 47 of the Bill seeks to introduce a new section 190A, which reads as follows:
Any auditor, tax practitioner, tax advisor or approved accountant other than a full-time employee of the taxpayer who – prepares, fills or certifies or assists in preparing, filling or certifying the tax returns, accounts, records, appeals and objections or any other document or information to furnish to the Commissioner-General; and intentionally disregards or fails to take reasonable care in discharging the professional duty, or fraudulently prepares and certifies such document or information or deliberately misinterprets any provision of this Act or any other Act administered by the Commissioner-General, or any regulation, rule or order made thereunder, commits an offence under this Act, and on conviction after summary trial before a Magistrate, be liable to a fine not exceeding one million rupees or to imprisonment of either description for a term not exceeding six months or for a prohibition order preventing him from practicing in such capacity.
Clause 47 is also patently ad hominem (directed against the character rather than their arguments) and discriminatory against the taxpayer and any ‘auditor, tax practitioner, tax advisor or approved accountant’ in that it presumes that the interpretation given by the Commissioner General will necessarily be correct and cannot ever be a ‘deliberate’ misinterpretation, he aggrieves.
Clause 40 of the Bill seeks to amend section 126 (5) of the principal enactment.
The proposed amendment permits a full-time employee of the taxpayer to disclaim and/or evade all responsibility and/or liability for the contents of the return, whilst imposing on every other person who ‘prepared, filled or assisted to prepare or fill for a payment’ the return or part of the return responsibility for same. Clearly, therefore, the said Clause 40 is ad hominem (directed against the character rather than their arguments), petitioner blames.
Dr. K.Kanag Iswaran PC with N.R Sivendran instructed by Mohan Balendra appeared for Raja Nihal Hettiarachchi. Dr. K.Kanag Iswaran PC appeared for BASL as well. Faisz Musthapha PC with Faisza Markar appeared for the third petition.
Additional Solicitor General Farzana Jameel with Senior State Counsel Nirmalan Wigneswaran appeared for Attorney General.