IN THE COURT OF APPEAL OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of an appeal by way of Stated Case on a question of law for the opinion of the Court of Appeal under and in terms of Section 11A of the Tax Appeals Commission Act, No. 23 of 2011 (as amended).

Commissioner General of Inland Revenue, Department of Inland Revenue, Sir Chittampalam A, Gardiner Mawatha, Colombo 02.

APPELLANT CA No. CA/TAX/0043/2014 Tax Appeals Commission No. TAC/OLD/IT/001 v.

John Keells Holding PLC, No. 117, Sir Chittampalam A. Gardiner Mawatha, Colombo 02.

RESPONDENT BEFORE : Dr. Ruwan Fernando J. &

M. Sampath K. B. Wijeratne J.

COUNSEL : M. Goonathilake, P.C., ASG, with H.

Opatha, SC, for the Appellant.

Maithrie Wickramasinghe, P.C. with Rakitha Jayatunga for the Respondent.

WRITTEN SUBMISSIONS : 15.12.2022 (by the Appellant)

01.12.2022 (by the Respondent)

ARGUED ON : 09.05.2022 & 19.07.2022 DECIDED ON : 25.05.2023 M. Sampath K. B. Wijeratne J.

Introduction When the Respondent’s appeal was taken up for hearing, the TAC, on its own accord considered the issue as to whether the TAC could make a determination on an appeal in the absence of a determination made by the CGIR. It is apparent from the written submissions filed by the Respondent Company in the TAC¹ that the Respondent Company has not raised the question of jurisdiction before the TAC. Nevertheless, the TAC on its own held that it has no jurisdiction.

Be that as it may, when this matter was taken up before this Court on the 26^th July 2021, the learned President’s Counsel for the Respondent invited Court to hear the parties with regard to the jurisdiction of this Court to make a determination on a case stated in the absence of a determination made by the TAC on the quantum of the assessment or on the assessment and moved to tender written submissions on the above question. Thereafter, on the 9^th of May 2022 and 19^th of July 2022 both Counsel made oral submissions on the preliminary objection raised by the Appellant. Consequently, both parties filed their written submissions on the question of jurisdiction.

The taxable periods on appeal to the Commissioner General of Inland Revenue (hereinafter referred to as the ‘CGIR’) were in respect of years of assessment 1995/1996 and 1996/1997. The CGIR did not hear the appeal but, forwarded the same directly to the Board of Review (hereinafter referred to as the ‘BOR’) in terms of Section 139 of the Inland Revenue Act No. 38 of 2000. The TAC, the successor of the BOR dismissed the appeal on the ground that the TAC can exercise its jurisdiction under Section 9 (10) of the Tax Appeals Commission Act No. 23 of 2011, as

1 At pp. 178,197 & 219 of the appeal brief.

amended (hereinafter referred to as the ‘TAC Act’) only when there is a determination made by the CGIR on the assessment.

Being aggrieved by the aforesaid determination of the TAC, the CGIR moved the TAC to state a case to this Court on the question of whether the TAC erred in interpreting Section 9 (10) and proviso of Section 10 of the TAC Act.

The Respondent submitted that there was no decision on the assessment by the TAC and the questions of law do not relate to the quantum of the assessment or indeed to the assessment at all. It was argued that this Court does not have jurisdiction to hear and determine the above matter on the premise that the TAC has not determined an assessment regarding the above taxable periods. The Respondent’s contention is that the TAC ruled on a jurisdictional issue and has not considered or proceeded to confirm, reduce, increase, or annul the assessment determined by the CGIR. As such, there is no assessment determined by the TAC in respect of the above taxable periods. Accordingly, it was argued that CGIR cannot invoke the provisions of the case stated to canvas the determination of the TAC and the available remedy is judicial review.

The Respondent’s argument is substantially based on the interpretation of Section 11A (6) of the TAC Act. Section 11A (6) of the T