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Appeal
Court dismisses Lanka Ventures petition
Case
over Inland Revenue assessment; Company announces Rs
235 m contingent liability; To seek redress from Supreme
Court
The
Appeal Court on Monday had delivered a judgment dismissing
the Lanka Ventures petition and rejecting the writs
sought by the Company over a matter concerning the Department
of Inland Revenue making an assessment to the tune of
Rs. 235 million.
Background to the case was in May and June 2005, the
Department of Inland Revenue (DIR) issued assessments
in respect of years of assessment 1994/95 to 2001/02
for the Purpose of collecting the tax refunds aggregating
to Rs. 130,247,094 made during the financial year 2003/04.
The assessments for the years of assessment 1994/95
to 2001/02 amounted to Rs. 221,908,075 which included
a penalty of Rs.75,221,470.
The assessments for surcharge on income tax for the
years of assessment 1994/95, 1995/96 and 2001/02 amount
to Rs. 13,640,788. Which included a penalty of Rs. 4,546,930.
Thereafter Lanka Ventures lodged appeals against the
assessments and filed action in Court of Appeal seeking
writ of Certiorari to quash the assessments, writ of
Prohibition prohibiting the DIR from taking further
action on the tax on default notice issued and seeking
other interim relief.
The Court of Appeal on 02 August 2005 granted an interim
order restraining the DIR from taking action to recover
the amount stated in the tax in default notice issued
for the years of assessment 1994/95 to 1999/2000 which
interim order had been extended till 29 September 2008.
At its sessions on Monday, the Appeal Court delivered
judgment dismissing the Company’s petition and
rejecting the writs sought by the company.
The total amount of Rs. 235,548,863 reflected in the
aforesaid assessments had been disclosed as a contingent
liability in the company’s financial statements.
Lanka Ventures said it proposes to seek special leave
to appeal to the Supreme Court after studying the judgment.
Any changes to the accounting treatment that may be
required will be decided in consultation with the auditors,
it added.
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