IN THE COURT OF APPEAL OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of an appeal on a question of law in terms of the Inland Revenue Act No. 10 of 2006 read together with Section 11A of the Tax Appeals Commission Act No. 23 of

2011 (as amended)

Lanka IOC PLC, Level 20, West Tower, World Trade Centre, Echelon Square, Colombo 01.

Case No: CA/TAX/027/2021 Tax Appeals Commission No: Appellant TAC/NBT/022/2016 Vs.

Commissioner General of Inland Revenue, Department of Inland Revenue, Sir Chittampalam A. Gardiner Mawatha, Colombo 02. Respondent Before: Hon. D.N. Samarakoon, J.

Hon. Neil Iddawala, J.

Counsel: Dr. Shivaji Felix with Mr. Nivantha Satharasinghe for the Appellant.

Miss Amasara Gajadeera, State Counsel, for the Respondent.

Argued on: 03.08.2023 Written submission tendered on: 13.10.2023 by the Appellant.

11.05.2023 by the Respondent.

Decided on: 15.12.2023 D.N. Samarakoon, J The appellant Lanka IOC (Indian Oil Company) PLC has preferred a Case Stated to be referred to this Court on the following questions of law, (01) Is the determination of the Tax Appeals Commission time barred by operation of law?

(02) Did the Tax Appeals Commission err in law when it concluded that the assessment was valid despite the fact that the assessor who made the assessment was not the same person who has sent the notice of assessment?

(03) Did the Tax Appeals Commission err in law when it ignored the fact that the tax assessed and the tax declared as per the notice of assessment was one and the same and therefore the assessment was invalid in law?

(04) Is assessment of Nation Building Tax and penalty as determined by the Commissioner General of Inland Revenue and confirmed by the Tax Appeals Commission excessive, arbitrary and unreasonable in view of the fact that it came within the scope of section 3(2)(iv)(8) of the Nation Building Tax Act No. 09 of 2009 (as amended)?

(05) Did the Tax Appeals Commission err in law when it failed to consider the appellant’s alternative argument that it could be regarded as a manufacturer of the relevant products?

(06) In view of the facts and circumstances of the case did the Tax Appeals Commission err in law in arriving at the conclusion that it did?

Question No.01:

(01) Is the determination of the Tax Appeals Commission time barred by operation of law?

(a) Construction of section 10 of the Tax Appeals Commission Act:-

The position of the appellant is, that, whereas the statutory time limit is 270 days, the determination was made one year and six months after the first date of hearing, which is 08^th October 2019.

The date of the determination being 19^th April 2021, it was 558 dates.

Section 10 of the Tax Appeals Commission Act as it originally stood said, “The Commission shall hear all appeals received by it and make its decision in respect thereof, within one hundred and eighty days from the date of the commencement of the hearing of the appeal:…”

Section 10 of the Tax Appeals Commission’s Act No. 23 of 2011 was amended by two subsequent Amendment Acts. They are, (i) Section 07 of Tax Appeals Commission (Amendment) Act No. 04 of 2012 and (ii) Section 07 of Tax Appeals Commission (Amendment) Act No. 20 of 2013 Section 7(2) of (Amendment) Act No. 04 of 2012 provided, that, “by the substitution for the words “within one hundred and eighty days from”, of the words “within two hundred and seventy days of”; and…”

Section 13 of the (Amendment) Act further provided, that, “13.

The amendments made to the principal enactment by the provisions of section 10 of this Act, shall be deemed for all purposes have come into effect on March 31, 2011”.

The “side note” of this section says “Retrospective effect.”

The Tax Appeals Commission Act No. 23 of 2011 was also certified on 31^st March

2011.

Hence the first amendment to section 10 of Tax Appeals Commission also dates back to the date of the commencement of the Tax Appeals Commission Act No.

23 of 2011.

Then, section 07 of (Amendment) Act No. 20 of 2013 provided, that, “7.

Section 10 of