HC asks NBR to explain VAT claims against S Alam firms
Earlier on 9 June, the Customs, VAT & Excise Commissionerate, Chattogram asked the two companies to pay Tk3,538 crore in "evaded VAT", Tk3,531 crore in fines, and interest on the amounts, to the state coffers within 15 work days
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The High Court on Monday (1 July) questioned the legality of the government's demand for unpaid VAT and fines worth over Tk7,000 crore imposed on two firms, S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd.
The HC bench of Justice Zafar Ahmed and Justice Sardar Md Rashed Jahangir issued the rules after two writ petitions were filed by the two companies.
The bench also fixed 15 July to hold a hearing on the ruling.
Earlier on 9 June, the Customs, VAT & Excise Commissionerate, Chattogram asked the two companies to pay Tk3,538 crore in "evaded VAT", Tk3,531 crore in fines, and interest on the amounts, to the state coffers within 15 work days.
The value added tax was evaded in fiscal years 2019-20 and 2021-22, according to the customs.
In its ruling, the HC yesterday asked the respondents why the orders determining VAT, which were issued by the commissioner of Customs, Excise & VAT Commissionerate, Chattogram, without hearing the two companies, should not be declared illegal.
The respondents are the commissioner and deputy commissioners of the Chattogram commissionerate; and revenue officer of Customs, Excise & VAT, Karnaphuli Circle, Taltola Chowki, Patia, Chattogram. They were asked to come up with an explanation within ten days.
The court also asked them why the commissioner of the Chattogram commissionerate should not be asked to dispose of the matter by strictly following sections 73 and 85 of the Value Added Tax and Supplementary Duty Act, 2012.
During the hearing, the companies' lawyer Ahsanul Karim told the bench that his clients on 4 June sought time from the commissionerate for their senior counsel to appear for hearings.
He said his clients were not heard before the adjudication orders were issued.
The commissioner of the Chattogram commissionerate violated the principle of natural justice in passing the orders by not allowing his clients to defend themselves against allegations made in show-cause notices issued on 4 October and 27 December last year and on 18 March this year, the lawyer said.
Deputy Attorney General Nawroz MR Chowdhury representing the government told the court that the companies were given time on several occasions over the last one year to submit their statements before the commissioner to uphold the principle of natural justice.
"But they had not done it. They cannot be given unlimited time under the relevant law," he said.
Deputy Attorney General Samarebdranath Biswas told the HC that the companies' intention was not to pay the VAT. Lawyer for the companies, Ahsanul said his clients never said they would not pay the VAT.
According to an audit by the VAT wing of the National Board of Revenue, the companies have unpaid VAT and consequent penalties of over Tk7,000 crore. They evaded VAT by presenting lower purchase and sales data in VAT returns and other means between 2019 and 2022.
The audit was subsequently reviewed by a five-member committee led by an additional commissioner of Chattogram VAT Commissionerate, which also arrived at the same conclusion. The two companies denied any wrongdoing.