SHIPPING

SC sets aside order made on Mv Induruwa Valley

Sarath MALALASEKERA

The Supreme Court has set aside an order made by the Court of Appeal and a writ of certiorari is issued quashing the order made by the third respondent on May 24, 2001 in Customs case and the letter dated June 18, 2001 containing the communication of the said order to the Chairman, Managing Director of the Petitioner Company.

The Petitioner Vallibel Lanka (Pvt) Limited, cited Customs Commissioner General of Inland Revenue, Deputy Director Customs and the Attorney General as respondents.

The Bench comprised Chief Justice Sarath N. Silva PC, Justice Nimal Gamini Amaratunga and Justice K. Sripavan.

Justice Sripavan in his lengthy judgement, the Chief Justice and Justice Amaratunga agreeing, stated when the GST Act makes general provisions in respect of certain matters and makes specific provision with respect to “recovery” the latter must prevail over the general. The petitioner in his petition filed through Messrs. Sudath Perera Associates stated that the petitioner is a company duly incorporated under the laws of Sri Lanka and engaged in the business of, inter-alia, international and national transportation by sea.

The petitioner purchased a sea-going vessel from Japan and brought same into the Sri Lanka territorial waters in or around April 1999. The vessel was registered under the Sri Lankan flag and named “MV Induruwa Valley”. The respondents did not dispute the said vessel is engaged in transporting essential cargo to the Northern Province.

The Petitioner alleges that the officers of the Department of Customs entered the premises of the petitioner on the basis that there were uncustomed goods the importation of which were restricted under Schedule “B” of the Customs Ordinance. The Executive Director of the petitioner was thereafter summoned for an inquiry before the third respondent as evidenced by the documents.

The petitioner sought a writ of certiorari in the Court of Appeal to quash the said order of the third respondent that the petitioner was liable to pay GST and NSL on the purchase price of the said vessel. The writ application was dismissed by the Court of Appeal, the petitioner sought special leave to appeal and leave was granted mainly on the following questions.

“The Court cannot give a wider interpretation to Sec. 16 as claimed by the learned DSG merely because some financial loss may in certain circumstances be caused to the State.

Considerations of hardship, injustice or anomalies do not play any useful role in construing fiscal statutes. One must have regard to the strict letter of the law and cannot import provisions in the Customs Ordinance so as to supply any assumed deficiency. For the foregoing reasons too, I hold the vessel in question was not “imported” into Sri Lanka within the meaning of the Customs Ordinance.

In view of the finding that “MV Induruwa Valley” was not imported into Sri Lanka, the application of Act, No. 26 of 2000 does not arise. In any event, the charging, levying and collection of GST could be made as if it were a Customs duty whilst the recovery of tax in default on the other hand is vested with the Commissioner General of Inland Revenue.

Deputy Solicitor General Ms. F. Jameel appeared for the respondents.

Attorneys-at-Law Sanjeewa Jayawardena with R. Amerasinghe instructed by Sudath Perera Associates appeared for the petitioner.

 Sea transport encouraged to minimise road congestion

Hiran H. SENEWIRATNE

The Sri Lankan Government intends to encourage greater use of the sea surrounding of the island for transport purposes and has introduced a new tariff for cargo moved by coastal shipping, Sri Lanka Ports Authority (SLPA) sources said.

SLPA officials said the aim is to lower transport costs, encourage coastal shipping and reduce traffic jams on the clogged main roads in main cities in the country, therefore the new tariff for local cargo is for export cargo originating from remote locations away from Colombo.

With these developments the government is trying to encourage the sea usage to move in out skirts of Colombo generating employment opportunities in the country.

“We want to encourage the movement of cargo by sea instead of using the road network,” the official attached to SLPA said.

The Government has given incentives like tax holidays for insterested parties who wish to commence sea transport service as proposed.

The focus of the Government is towards an ‘economic revival’ in the east after driving away Tamil Tigers from the area.

Port officials said the new tariff could be useful for exports like agricultural produce and garments and exporters can ship products from minor ports like Trincomalee and southern Galle, both relatively under-developed areas.

The exports through short-sea coastal vessels at minor ports around the island and exports it through Colombo will be benefitted with new tariff.

The new SLPA tariff is a total stevedoring charge of 200 dollars for a twenty-foot container on imports and exports through Colombo port but originating from or destined to minor ports. “The idea is to encourage the use of minor ports as another way of exporting cargo, “It will also boost coastal shipping services.” said an SLPA official.