7 April, 2020

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Constitutional Challenges To 11 Bills: Summary Of Submissions By Counsel For The Petitioners

By Colombo Telegraph

Summary of submissions by Counsel for the petitioners of the challenged 11 Bills.

21 Bills were placed on the Order Paper of Parliament on 8th March 2013, 11 of these Bills were challenged, in 15 separate Petitions filed on 14th March 2013. The Supreme Court listed the matter for hearing on 21st and 22nd March 2013.

The Speaker

The Bills challenged were the Fiscal Management (Responsibility) Amendment Bill, the Finance (Amendment) Bill, the Betting and Gaming Levy (Amendment) Bill, the Strategic Development Projects (Amendment) Bill, the Notaries (Amendment) Bill, the Power of Attorney (Amendment) Bill, the Registration of Documents (Amendment) Bill, the Tax Appeals Commission (Amendment) Bill, the Value Added Tax (Amendment) Bill, the Inland Revenue (Amendment) Bill, and the Nation Building Tax (Amendment) Bill

The Counsel for the Petitioners (and Counsel for one intervenient in the Determination related to the Finance (Amendment) Bill) made submissions on 21st March 2013 and the matter was adjourned to 22nd March 2013 for the submissions of the Attorney General.

Fiscal Management (Responsibility) Amendment Bill

J C Weliamuna with Pulasthi Hewamanne appeared for the Petitioner in SC SD 1/2013;
Suren Fernando with Luwie Ganesathasan appeared for the Petitioners in SC SD 2/2013
Counsel submitted that the proposed amendments sought to increase the ability of the executive branch of the government to issue guarantees upto 21% of the GDP, where the present limit was 13.5%. Counsel said that the guarantees could be issued by the executive without prior approval of the Parliament, and this violated Article 148 which requires that Parliament maintains full control over public finance. Further, in the event the guarantees were called upon, the public funds would be expended notwithstanding Parliament not having known or granted approval for the guarantee. Therefore Article 150 would also be effectively violated.

Counsel also submitted that the Fiscal Management (Responsibility) Act (passed in 2003) as it presently stands requires that the Government reduces loans (from 85% by end 2006) to 60% of the GDP by the end of 2013. Responsible fiscal management would have achieved this. However, having failed to engage in responsible fiscal management, it was now sought to amend the Act so that the levels of State loans at the end of 2013 could be 80%, and the time for achieving a reduction to 60% was extended till 2020.

Counsel said that in a previous determination Court had stated that the details provided in the reports under the Fiscal Management (Responsibility) Act was insufficient.

Counsel submitted that, the legislature disregarded the determination of the Supreme Court with regard to the Budget (Appropriation Bill 2013) that the prior approval of Parliament was necessary prior to loans being obtained, and that the Bill should be amended to require such prior approval. The legislature passed the Bill without the amendment suggested by Court. Therefore Counsel pointed out that increasing the permissible level of loans would aggravate the violation of Article 148 since the increased level loans (from 60% – 80% of GDP) would also be without prior Parliamentary approval as required by Article 148 (and as determined to be necessary in the judgment of the Supreme Court in the 2013 Appropriation Bill case).

Counsel therefore sought a ruling that in view of the abdication of Parliament’s powers Article 76, 4(a) and 3 of the Constitution were also violated and that therefore the Bill would require a 2/3 majority as well as a referendum if it is to be passed.

Finance Amendment Bill

J C Weliamuna with Pulasthi Hewamanne appeared for the Petitioner in SC SD 3/2013
Sanjeewa Jayawardene PC for the intervenient-Petitioner
Counsel for the Petitioner argued that the Bill sought to grant power to the Minister to declare a Bonded Area, by regulations, resulting in certain tax exemptions and consequential loss of potential revenue. Article 148 requires that Parliament exercises full control of public finance, and therefore the Minister cannot make regulations with regard to tax matters and criteria to be followed to benefit from exemptions. Counsel also argued that this would be a violation of Article 12 since it was unreasonable to grant these powers to the Minister and left room for arbitrary decisions.
Additionally, while stating that the imposition of a Crop Insurance Levy was beneficial, Counsel argued that the Bill made no provision with regard to who could apply for benefits, how it was to be administered etc, and that this could not be left to the Minister to decide by regulations. Article 148 requires that Parliament exercises full control of public finance, and therefore the Minister cannot make regulations with regard to tax matters. It is necessary that the Farmers who are sought to be protected by this Fund, are adequately protected, by clear provisions as to administration of the Fund, which provisions must be set out by Parliament.

Counsel for the intervenient Petitioner stated (with regard to the first argument) that Court must not assume that the Minister will make unreasonable regulations, and that if that is done it could be challenged in Court. Therefore at this stage it cannot be challenged.

Betting and Gaming Levy (Amendment) Bill

Suren Fernando with Luwie Ganesathasan appeared for the Petitioner in SC SD 4/2013
Viran Corea with Ermiza Tegal and Juanita Arulanantham for the Petitioner in SC SD 5/2013
Counsel for the Petitioners submitted that the proposed waiver of VAT and NBT in respect of Betting and Gaming institutions was irrational and contrary to Article 12(1) especially in a situation where the citizen was forced to pay VAT on numerous essential items, and where gambling is considered a social vice. This was a wrongful exercise of Parliament’s control over public finance.

Further, this was aggravated in the context of the Strategic Development Projects (Amendment) Bill which sought to grant exemptions from even the levy under the Betting and Gaming Act, in certain instances.
They also argued that several provisions were with retrospective effect. In particular the Commissioner General of Inland Revenue had collected certain levies from 1st January, unlawfully, and without statutory authority to do so, and the Bill was now seeking to legitimize this. This too, the Petitioners argued, was contrary to Articles 12 and 148.

Strategic Development Projects (Amendment) Bill

Viran Corea with Ermiza Tegal and Juanita Arulanantham for the Petitioner in SC SD 6/2013
The Petitioner argued that the Bill sought to grant exemptions from the levy under the Betting and Gaming Act. This was irrational and contrary to Article 148 argued the Petitioner, especially since ‘social benefit’ was an essential criteria for a Strategic Development Project, and, gambling being a social vice, could not possibly be regarded as a social benefit. They argued that the extent of irrationality involves under mining Article 12(1) and cannot be passed by a mere simple majority having regard to the relevant provisions of the Constitution and the law taken together.

Notaries (Amendment) Bill

Viran Corea with Ermiza Tegal and Juanita Arulanantham for the Petitioner in SC SD 7/2013

Power of Attorney (Amendment) Bill

Viran Corea with Ermiza Tegal and Juanita Arulanantham for the Petitioner in SC SD 8/2013

Registration of Documents (Amendment) Bill

Pulasthi Hewamanne for the Petitioner in SC SD 9/2013
In the above three cases the Petitioners’ Counsel argued that several provisions were with retrospective effect. Certain public officers had collected certain levies from 1st January 2013, unlawfully, and without statutory authority to do so, and the Bill was now seeking to legitimize this. This, the Petitioners argued, was contrary to Articles 12 and 148. They quoted case law to show that such practices are frowned upon as they run counter to the need to ensure certainty of the law, prevention of situations of unfair advantage and that the Rule of Law would be threatened by passing such provisions.

Tax Appeals Commission (Amendment) Bill

Ronald Perera PC with Chandimal Mendis for the Petitioner in SC SD 10/2013
The Petitioner argued that there was discriminatory treatment with regard to Tax Appeals Commission appeals from Inland Revenue Assessments and Customs Appeals, and a 10% deposit was only required in the former. Additionally there was no reason why the 10% deposit should be non-refundable – in the event of the tax payer winning the appeal, this should be refunded.

Value Added Tax (Amendment) Bill

Ronald Perera PC with Chandimal Mendis for the Petitioner in SC SD 11/2013
The Petitioner argued that several provisions were sought to be with retrospective effect and in violation of the Rule of Law / Article 12.

Inland Revenue (Amendment) Bill

Senura Abeywardena for the Petitioner in SC SD 12/2013
Suren Fernando for the Petitioner in SC SD 13/2013
The Petitioners argued that an irrational and discriminatory tax exemption for advertisements / sponsorships of international sporting events ‘approved by the Minister’ was sought to be given with backdated effect. They argued that an international sporting event is not defined in the law, and this left room for the Minister to exercise powers arbitrarily. The definition of such an event in the case of a tax law was a matter for Parliament (in the exercise of its control over public finance in terms of Article 148) and could not be delegated to anyone else.
Further, although certain tax exemptions had been provided for certain other matters, it was now sought to add further criteria in order to be eligible for same. This, they argued, violated Article 12(1).

Nation Building Tax (Amendment) Bill

Suren Fernando for the Petitioner in SC SD 14/2013
J C Weliamuna with Pulasthi Hewamanne for the Petitioner in SC SD 15/2013;
The Petitioners argued that an irrational and discriminatory NBT tax exemption for advertisements / sponsorships of international sporting events ‘approved by the Minister’. They argued that an international sporting event is not defined in the law, and this left room for the Minister to exercise powers arbitrarily. The definition of such an event in the case of a tax law was a matter for Parliament (in the exercise of its control over public finance in terms of Article 148) and could not be delegated to anyone else.

Similarly the Minister and the Secretary to the Ministry were given powers to determine certain other tax exemptions. The criteria was not defined by the Bill. This, similarly, left room for the Minister to exercise powers arbitrarily, and contravened Articles 148 and 12.

Further, it was sought to retrospectively increase the base on which NBT was charged, in certain cases. This would be in violation of Article 12, they argued.

The Customs / Inland Revenue had collected certain taxes from 1st January, unlawfully, and without statutory authority to do so, and the Bill was now seeking to legitimize this. This, the Petitioners argued, was contrary to Articles 12 and 148.

Related stories;

Full Text Of Petitions Filed In The SC Challenging The Load Of Bills Suddenly Sought To Be Passed

 

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Latest comments

  • 0
    0

    Tailoring the law to fit the regimes agenda. How convenient with a 2/3 majority of idiots in parliment. Rule of Law? Good Governance? or plain outright cheating.

  • 0
    0

    Justice = Just + ice. (according to Hela Avula linguistics). Should you find it unpalatable add a little cream and some flavour you prefer. Then you can eat justice..mm. very tasty and nourishing too!

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