VAT Bill with retrospective effect challenged

Gampaha District UPFA Parliamentarian Sisira Jayakody and lawyer and Mahajana Eksath Peramuna Executive Council member Nishantha Wimalachandra this week challenged the constitutionality of the Bill titled Value Added Tax (Amendment) Bill in the Supreme Court. The Bill was tabled in Parliament to get its approval for the VAT revisions made on May 2.

They stated that certain clauses of the Bill sought to antedate the operative date and the liability to pay VAT. As a result the traders declared to be liable to pay VAT with retrospective effect would be charged on transactions already concluded without collection of VAT from the customers, they argued.

This impossibility, contended the petitioners, resulting from due compliance with law, would create a situation where persons who acted in breach of the law would be placed at an advantageous position, retrospectively, against those who duly complied with the law during that period.

They further alleged that acts of absolute nullity would be validated retroactively i.e power to interim order restraining the Finance Minister and the other respondents from directing and collecting VAT and NBT until the petitions are determined.

Senior Deputy Solicitor General Farzana Jameel with Senior State Counsel Dr. Avanti Perera appeared for the legislate with retrospective effect cannot not be construed as having power to validate a crime or an offence, which, they alleged, is illegal, immoral, and unconstitutional and burdening the public with unbearable taxes would amount to inflicting torture and contravening Article 11 of the Constitution.

They stated that certain clauses were inconsistent with the Constitution and sought the court to determine same and declare that the Bill should be passed by the two thirds majority in Parliament and approved by the people at a referendum. Attorney General. President’s Counsel Manohara de Silva with Kanishka Vitharana, Savendra Fernando PC and Darshana Wereduwage appeared for the petitioners.

The petitions are to be argued on December 6.