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| Thursday, 18 March 2004 |
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by Wasantha Ramanayake The Inland Revenue (Special Provisions Amendment) Act was not merely a tax amnesty Act but a piece of legislation that granted full immunity or pardon for offenders of host of other Statutes, Counsel Kanag Ishwaran PC appearing for President Chandrika Bandaranaike Kumaratunga submitted before the Supreme Court, yesterday. The President in terms of Article 129(1) of the Constitution had made a Reference to the Supreme Court for its opinion on the Inland Revenue (Special Provisions Amendment) Act No. 10 of 2003 whether it was invasive of the powers of the President to grant pardons under Article 34 of the Constitution. The special Bench of five Supreme Court Judges comprised Chief Justice Sarath N. Silva PC and Justices Dr. (Mrs.) Shirani Bandaranayake, Hector S. Yapa, Asoka de Silva and Nihal Jayasinghe. At the outset, the Chief Justice informed counsel that in terms of Article 129 (4) the matter could be heard in private. However, in view of the public importance the counsel agreed that hearing should be in public. Kanag Ishwaran PC submitted that the Constitution allowed the President to refer matters of public interest to the Supreme Court for its opinion. Thus the Court was under obligation to consider the Act in question and communicate its decision to the President. The Chief Justice observed that the opinion of the Supreme Court would not have any bearing on the already enacted law and it was up to the President to decide consequential actions. The counsel submitted that the object of the Act was not clearly defined, its long title was misleading and its effect would go beyond a mere tax amnesty. He submitted that the schedule to the Act included various other statutes. The counsel submitted that the schedule to the Act included the Business Turnover Tax Act, The National Security Levy Act and the Goods and Services Tax Act thus granting immunity from investigations and prosecution. The Multi-National Companies could defraud money thus collected from the 19 million people and due to the state. He argued that the Customs Ordinance also had been scheduled to the Act thus enabling an importer not to declare the real value of the consignment. The Customs could not sue the importer to recover the Duty since the Act would protect the importer from doing so. The counsel contended that in terms of Section 3, the Act could grant full immunity to a declarant from any investigation or prosecution for any offence. The authorities were powerless to question the source of income of the declared assets, the manner in which they were funded or any related matters. Further, the Act would provide for absolute secrecy, providing law enforcement authorities from questioning any declarant or inquiring into any information contained in such declarations. The huge surge in the stock market as claimed by the government was greatly due to the investment of money from various illegal sources such as drug dealings, human smuggling, money laundering and Exchange Control Frauds. The Act was immoral since it had treated the honest tax payers differently. The tax amnesty was only with regard to the offenders, without granting any concession to honest tax payers. The counsel submitted that the President could only grant pardons after the conviction of an offence; however, the Act would give both pre-conviction and post-conviction not only invasive of the President's powers but also even beyond that. The Chief Justice observed that the Legislature could not intervene once the offence was laid down, where the judicial process would begin, until the conviction. Parliament could not intervene to stop such a process. Only the Attorney General could grant conditional pardon to the "accomplice," in such offence. Ben Eliyathambi PC submitted that Bill was fully debated in Parliament after it was placed in the Order Paper. The schedule to the Act was not mysteriously included but was also placed in the Order Paper of Parliament. He further submitted that granting of a tax amnesty was not a new phenomena and all such amnesties inevitably would violate equality. The Chief Justice observed that the Constitution contemplated that there could be inconsistencies in laws enacted and it was the duty of the Legislature to rectify them. Nihal Sri Ameresekere who challenged the Bill before it was enacted appearing in person argued that the Act would allow the declarants to dispute their earlier declarations which had not been accepted by the relevant authorities and to get relief accordingly. He further argued that this would not only include the refund of payments already made to the State that were subsequently disputed under the Act but also the forfeited goods including narcotics, arms and ammunition. He submitted that the Act would open the doors to the funds of the terrorists and connected activities to be brought into the banking system. K. Kanag Ishwaran PC with M.A. Sumanthiram appeared for the President. Additional Solicitor General P.A. Rathnayake PC appeared for the Attorney General. Counsels Ben Eliyathambi PC and Ms. C. Siriwardane made submissions. The opinion of the Supreme Court would be communicated to the President within ten days. |
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