SEYLAN BANK PLC

VS.

COMMISSIONER GENERAL OF INLAND REVENUE

SUPREME COURT
JAYAWARDENA, J.
KODAGODA, J.
WICKRAMASINGHE, J.
SC/APPEAL/46/2016
CA/TAX/23/2013
FEBRUARY 10, 2021

Inland Revenue Act, No. 10 of 2006, sections 106(1), 163(5)(a)- Inland Revenue (Amendment) Act, No. 19 of 2009-Prospective and retrospective effect of a statute-Assessment time barred-Tax Appeals Commission Act, No. 23 of 2011

The question to be decided by the Supreme Court was whether the assessment for the year 2007/2008 dated 26.03.2010 issued by the assessor of the Department of Inland Revenue against the appellant in respect of the tax return filed on 30.09.2008 was time barred in terms of section 163(5)(a) of the Inland Revenue Act, as amended by Act No.19 of 2009.

Held :

1. By the Amendment Act, No. 19 of 2009, inter alia, sections 106(1) and 163(5)(a) of the principal Act were amended to extend by two months and six months, respectively, the time period available to a taxpayer to furnish a return of his income for a given year of assessment and the time given for the assessor to make an assessment of income tax for such year of assessment.

2. The amending Act was certified by the Speaker on 31.03.2009 and therefore the Act shall come into force from that date by operation of Article 80(1) of the Constitution. However, section 27 of the amending Act specifically sets out the dates on which the amendments made by the said amending Act shall come into force. Accordingly, in terms of section 27(6) of the amending Act, the amendments referred to in section 27(1) to (5) of the amending Act are given retrospective effect from the dates specified therein and the amendments not referred to in section 27(1) to (5) of the amending Act operate with prospective effect from 01.04.2009. As the amendments made to sections 106(1) and 163(5)(a) of the principal Act are not referred to in section 27(1) to (5), the amendments made to sections 106(1) and 163(5)(a) of the principal Act shall operate with prospective effect from 01.04.2009 in terms of section 27(6) of the amending Act, whether they relate to substantive law or procedural law.

3. It was not possible for a taxpayer to file a tax return for the year of assessment 2007/2008 on or before 30.11.2008 as the said amending Act was passed by Parliament and certified by the Speaker on 31.03.2009. Therefore, the amendments made to both sections 106(1) and 163(5)(a) of the principal Act should be given prospective effect.

4. The assessment for the year 2007/2008 dated 26.03.2010 is time barred.

Cases referred to :

1. Gardner v. Lucas [1873] 3 AC 582 at 603

2. Blyth v. Blyth [1966] 1 All ER 524 at 535

3. Hitendra Vishnu Thakur and others v. State of Maharashtra and others (1994) 4 sec 602

APPEAL from the Judgment of the Court of Appeal.

F.N. Goonewardena for the Appellant-Appellant.

Priyantha Nawana, P.C., A.S.G., with lndumini Randeny, S.C., for the Respondent-Respondent.

cur. adv. vult.

December 16, 2021

JAYAWARDENA, J.

This is an appeal from a judgment of the Court of Appeal which affirmed the determination of the Tax Appeals Commission, established under the Tax Appeals Commission Act, No. 23 of 2011, as amended (hereinafter referred to as "Tax Appeals Commission").

Facts of the case

The appellant-appellant (hereinafter referred to as "appellant") is a licensed commercial bank under and in terms of the Banking Act, No. 30 of 1988, as amended. Further, the respondent-respondent (hereinafter referred to as "respondent") is the Commissioner-General of Inland Revenue.

In terms of section 106(1) of the Inland Revenue Act, No. 10 of 2006 (hereinafter referred to as "principal Act"), taxpayers were required to furnish a return of their income for any year of assessment, commencing on the 1st day of April of a given year and ending on the 31st day of March in the immediately succeeding year, on or before the 30th day of S