25 May, 2024

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Customs DG’s Collusion To Embezzle Hundreds Of Millions Tax Revenue Reported To President Sirisena

In a dramatic tern of events the Director General of Customs, Jagath Wijeweera’s collusion with certain Customs officers to misappropriate hundreds of millions of tax revenue has been reported to the President Maithripala Sirisena.

Director General of Customs, Jagath Wijeweera with the President Mahinda Rajapaksa

Director General of Customs, Jagath Wijeweera with the President Mahinda Rajapaksa

Writing to the President with overwhelming evidence of exploitation due to the lawlessness in the Customs Administration exposed by the Nagananda Kodituwakku, the former Head of the Customs Revenue Task Force, and now a public interest litigation lawyer.

In his detailed report to the President on these abuses, the lawyer Kodituwakku said that in number of previous occasions he had drawn DGC’s attention to the blatant abuses pursued by certain officers for unjust enrichment and in some cases with names of those officers with overwhelming evidence of their connivance with the ethanol smugglers.

However, in his report the lawyer Kodituwakku, states that DGC turned a blind eye condoning such actions, apparently in collusion with such officers, incurring colossal loss of tax revenue and therefore he was compelled to report these organised frauds to the Corruption Commission, seeking it to launch a proper investigation into the major tax revenue losses incurred by the Government due to the monumental failure on the part of the Customs chief, Jagath Wijeweera.

We publish below the letter in full;

Mr Maithripala Sirisena

The Hon’ President of the Republic of Sri Lanka

Presidential Secretariat

Colombo 01

 

20th April 2015

Hon’ Sir,

You have been given a clear mandate by the people to restore the Rule of Law in this country, which has been completely undermined by the Rajapakse administration.

This is a massive national task and you need time and men of integrity to meet this national objective. However, there are highly sensitive places like Sri Lanka Customs, which are integral to the economic lifeline of this country.

DGC’s incompetence and ignorance of Customs Law & Procedure

Currently, the Customs is headed by Mr Jagath Wijeweera, the Director General of Customs (DGC) who is not up to the required standards as the lawlessness prevails in each and every Directorate in the Department.

A person appointed to the office of the Director General of Customs is expected to be an honest, knowledgeable and a person with integrity. However, the conduct of Mr Jagath Wijeweera suggests that he lacks these prerequisites and apparently mixes up his priorities with other considerations.

  • Lack of awareness of the laid down law to protect the public funds

As set out in the Customs Ordinance, being the general superintendant of all matters relating to Customs, the primary role of the DGC and those employed in the Customs Department is to collect and protect the tax revenue for the government.

  • Supreme Court intervene to enforce Rule of Law

However, further to a dispute over recovery of tax revenue (evaded by those engaged in the import export trade) as penalties or forfeitures out of which 1/3 is claimed by the offices as cash rewards, the process was challenged before the Supreme Court (SC Appeal 49/2008 decided on 20-03-2009) and in this regard a clear and unambiguous ruling was given by the Supreme Court. According the said Court ruling in all cases where the tax revenue is evaded, underpaid or defrauded, the proper course of action shall be the recovery of the said tax so evaded as fiscal levies and NOT as a penalty or forfeitures and distributing 1/3 of such recoveries amongst the officers as cash rewards under section 153 of the Customs Ordinance. The Court held that ‘… the proper recourse should not to effect a seizure of goods and impose penalties but to recover additional amounts that may be claimed as duties…’

Yet what is observed since Mr Jagath Wijeweera appointed to the office of the DGC is completely the opposite. It is observed that he is directly responsible for inducing the dishonest officers to recover billions of rupees of defaulted tax as penalties, habitually permitting such officers to share 1/3 of such recoveries as ‘cash rewards’, despite this practice has been outlawed by the Supreme Court.

  • Permitting officers to abuse law to remand suspects for improper purposes

In the year 1988, the Customs law was amended by the govt, affording the DGC with sweeping powers to protect the tax revenue, which includes powers to enforce Customs law effectively against the tax evaders.

Under the said reforms a new provision of law was introduced to the Customs law (Section 127A, 127B and 127C), permitting the DGC to keep suspect persons accused for evasion of payment of tax revenue in the remand custody, in order to conduct a ‘proper investigation’ and to bring them to book. This law was so stringent as it provides no jurisdiction whatsoever to the Magistrate to consider a bail application even under exceptional circumstances.

Therefore, with a view to ensure that the new law is not abused by the officers and that they would comply with the ‘due process requirement’ enacted in the Article 13 (2) of the Constitution to protect the liberty of citizens, a new Departmental Order 252 of 02-10-1995 (a copy Marked X1 enclosed) was issued by then DGC, with the concurrence of the Attorney General.

The said Order states that ‘… under no circumstances a person arrested be detained beyond twenty-four hours. The officers should note that it is MANDATORY for the Director General of Customs to express an OPINION relating to the nature of the offence and the involvement of the persons so arrested for the purpose of Section 127A of the Ordinance. Therefore, an explicit report in the form of an application (‘B’ report) should be prepared and signed by the Director of the Division concerned, when seeking permission from the Magistrate, to keep any person in the remand custody (to conduct a proper investigation) …’

  • Encouraging defying of law (127A) for improper purposes

However, it is observed that in a large number of cases the DGC, Mr Jagath Wijeweera has completely ignored his statutory duty and permitted some dishonest officers to abuse the Section 127A to keep suspects in the remand custody for the purposes not permitted by law, such as to induce them to pay extortionate penalties under compulsion. It is noted that in some cases hundreds of millions of rupees have been recovered in this manner, 1/3 of which have been shared amongst the officers as cash rewards thereafter.

The last reported case in this regard is a revenue fraud inquiry (ICT/INV/14/2015) against Janatha Garments (Pvt) Ltd, conducted by Asst Director of Customs (ADC), Mr A Lankadeva in March 2015. In this case in response to summons served two accused persons have attended to customs ICT Directorate on 13-03-2015. Then on the directions of the ADC, Mr A Lankadeva, both the accused persons have been produced before the Magistrate’s Court (B/24054/6/15) and remanded for two weeks, alleging that their custody in remand was necessary ‘to conduct a proper investigation’. However, in this case, it is observed that the head of the investigations, Mr A Lankadeva has deliberately defied the Departmental Order 252 referred to above, and has failed to furnish a report (B Report) through the Director of the ICT to the Court, apparently the Director ICT was willing to furnish a false report to the Magistrate.

Whilst the two suspects were in the remand custody Mr A Lankadeva has negotiated a ‘deal’ with one of the suspect’s father, who was naturally being nervous about his son’s custody in remand, to pay 120 million rupees penalty/mitigated forfeiture. Thereafter, on 18-03-2015 Mr A Lankadeva has made his officers to seek permission from the Court to produce the two suspects before Customs from the remand, alleging that presence of suspects was required at Customs on 19-03-2015 ‘for the purpose of recording further evidence’. The Court has then permitted this request. This was a clear false representation made to the Court, as the suspects had been brought to customs from the remand custody not to record further statement but to attend a formal customs inquiry that is forbidden by law.

And on 19th March 2015 Mr A Lankadeva, who was leading the investigation, himself has conducted the formal customs inquiry against the suspects (whilst they were in the remand custody) and he had imposed and recovered a penalty of 60 million rupees in spot cash with a undertaking obtained from the suspect’s farther to pay another penalty of 60 million rupees in a month’s time. This whole process was absolutely unlawful, as he had failed to recover a single cent as tax revenue, which should have been recovered and credited to the revenue.

It is noted that the said formal inquiry was conducted the suspects have been returned to the remand custody and on the following day (20-03-2015) a manifestly false report has been filed in Court, notifying that ‘investigation into the matter has been completed therefore to release the suspects from the remand custody.’ (a copy marked X2 enclosed)

The whole process was unlawful – DGC condone wrongdoing

This is not the first time the law is blatantly abused in this manner for unjust enrichment by dishonest officers of Customs that has been openly condoned by the DGC. Many similar incidents including this and the names of the officers connived with the ethanol smugglers have been reported (a copy marked X3 enclosed)to the DGC, Mr Jagath Wijeweera, yet he has failed to initiate any action whatsoever against errant officers, evidently due to his collusion with such officers. In this backdrop this matter has also been reported to the Corruption Commission to launch a proper investigation (a copy marked X4 enclosed). The Customs officers displeased with the action taken to against them, has strictly warned the suspects whom I represented in Court, that they should not retain my services in future. I have duly reported this matter to the Chief Magistrate’s Court, on 02nd April 2015, as per the instructions of the suspects, who have been severely warned against retaining my legal representations (a copy marked X5 enclosed).

This report is furnished with a hope, that stern action would be taken against the DGC, Jagath Wijeweera, and the rest of the officials, who have been abusing the Customs Law to embezzle tax revenue.

Yours faithfully,

Nagananda Kodituwakku

Attorney-at-Law (Sri Lanka) & Solicitor (England & Wales)

Copies to:

1. Mr Ravi Karunanayake, Minster of Finance

2. Mr Jagath Wijeweera, DGC

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Latest comments

  • 8
    0

    Good job and we all support you for the action against them.Thank Mr. kodituwakku. These are the clear result of mafia rule.

    • 8
      0

      Amounts to stealing from impoverished Sri Lanka’s national revenue. These two seasoned & shameless thieves should be hung in public. Nothing else will do.

      Cheers!

      PS: Please use DCG’s tie and corrupt ex-dictator’s much hated “satakaya” to hang them respectively. There by saving Sri Lanka’s treasury of much needed funds.

  • 8
    0

    RE: Customs DG’s Collusion To Embezzle Hundreds Of Millions Tax Revenue Reported To President Sirisena

    Most likely, The Director General of Customs, Jagath Wijeweera SHARED with the President Mahinda Rajapaksa 50/50 on the take.

    What a great Deal for the Liars, Crooks, and Robbers.

    Jail, prosecute and Get the funds Back!

  • 10
    1

    Whilst the new government is busy pushing the 19A in parliament they are clearly blinded by MR gradual emergence to power. There is a on going media war and in this war MR is clearly ahead craftily winning the hearts of people. The MS&RW Government is being reduced to an administration as witch-hunting government and not is not being seen as a government with a progressive agenda.The article like this one adds credence to the which-hunt which the common man is gradually being made to believe.

    Without a doubt I endorse such exposure as this article but RW & MS are not addressing the flank attack being initiated by MR to discredit all the reform work being undertaken by the new gov. The masses dont undertand the implications of reform they judge and elect governments by cheap and well organised social calls MR is making to temples to spread his poison.

    Wake-up RW & MS you mucking things -up . You have already driven the first nail into your coffin by appointing a committee that has vindicated Arjuna M shattering our dreams of good governance. We the public who elected you don’t need your foolish committees to tell us if AM is guilty or not. Your action has given MR enough room to make his comeback.

    • 3
      0

      well said Pot shot !

  • 4
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    This practise of officials being given a substantial portion of the fines as rewards in the Customs service in recent times is an undesirable and unhealthy feature. When the business community is inflicted with such harsh punishment the tendency is to discourage the better sections of the commercial sector. Years ago, a friend of mine, high in the Customs service, said a DGC was earning as much as Rs.3 million a day on the sly. The same DGC had bought several valuable Colombo properties, Coconut Estates etc during that time. He was smart enough to be in the good books of the then rulers. So he was, in a way, exempt from Income Tax and other “complications”.

    Gone are the days when honourable men like MLD Caspersz, VP Vittachi were Customs Chiefs and brought efficiency, integrity and respect to the service. The rot set in when Mrs. Premadasa virtually took over as Customs chief and was a darling of the Container-Contraband import mafia. Predictably, the Rajapakses “improved” in that aspect and now
    the Customs service is an absolute disgrace with rare exceptions.

    Legal Lunumiris

  • 6
    0

    Nagananda Kodituwakku is doing more for this country than all 225 parliamentarians combined.That is why they want to increase their number to 250 hoping to beat him.

  • 4
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    Great Mr Kodithuwakku – youa re a rare gem of this nation. Upto know former Prez makes statements as if nothing like abuses of any kind could happen – but if we could produce them with all evidences proving the issues- these buggers will have no chance. May all these be revealed soon so that no denials can be accepted. With many becoming clear today- how all these were allowed- I have no doubt truth will succeed and clear this in the weeks to come.

    • 1
      0

      “Great Mr Kodithuwakku – youa re a rare gem of this nation”
      The best & the rare gems were found in Ratnapura in the past, not anymore. Nagi is one of them from Batugedara. All the best Nagi, you don’t give-up, do you?

  • 1
    0

    Geting around payment of taxes is a big blow to local industry. Taxes in place to support local industry is inefective as importeres avoid paying taxes by bribes.

  • 0
    0

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 0
    0

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 0
    0

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 3
    0

    Rogues all over!!!
    If the claims are legitimate, they should not be only going behind bars , but all properties & wealth to be confiscated, name and shame them to the public, delete their names from the pension scheme.

  • 3
    0

    Trust meaningful remedial action taken by President Maithreepala Sirisena and P. M. Ranil W.
    These are shortcomings during last regimes’ s time. Without doing these properly, they found easy way to raise funds by adding more taxes on ordinary people.

  • 1
    2

    nOW THE 50/50 SHARE MUST BE WITH rAVI.k ?

    ALL OF THE ABOVE HAPPENED UNDER RAVI.K/SIRA/RW’S WATCH.
    YAHAPALANAYATA …J……………………A.

    • 0
      1

      Thalaimannar [Edited out],

      If all what happened was under MS, RW and RK, then why is the Customs Chief posing with the Meeharaka in the photo?

    • 3
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      Thondamannar

      Why are you trying to misrepresent. Can’t you see the picture attached to this article which will give you the answers.

  • 1
    0

    Frauds are highlighted in sri lanka daily , unfortunately for some reason it is ONLY HIGHLIGHTED. Nothing else.
    This is just another load of bull to fool the voters that something is being done.
    Well, I can say this, if by the time elections are called their are no solid arrests of the drug barons, ethanol kings and other crooks my vote will not be for the UNP.

    • 4
      0

      Tungsan Yu

      Don’t be disappointed. The days of the rogues, thieves and rowdies are numbered.

  • 2
    0

    What is the point in sending a copy to Mr Ravi Karunanayake, Minster of Finance? Bloody jokers. I’ll tell you what is going to happen. Someone will be ‘taken in for questioning’ and quietly released. That is the last we will hear of it.

    Better to empty the jails of Tamil political prisoners and poverty stricken debtors and imprison these criminals instead.

  • 0
    0

    DGC, Mr Wijeweera did his best to protect the ‘poor man’, Mr Leslie Gamini, the Customs Media Spokesman (the former Director of Prevention of Smuggling) from facing the guillotine.

    With this exposure, probably both these men will face serious consequences for their collusion in the ethanol smuggling.

  • 1
    0

    No brothel house can prevail without the knowledge of the local police and no ethanol can reach Colombo without the knowledge of Customs. For more details visit

    [Edited out]
    Please write instead of posting links – CT

  • 1
    0

    I know few customs officers,who has big houses,cars etc but the children are not doing well.They will never be.
    That is a fact of life.Officers,who are corrupt – Are cursed community.

  • 1
    0

    Corruption can be investigated in various ways – one is by writing to the president who will refer it to the relevant minister who should refer it to the Bribery Commission.
    The NPC has commenced a new trend in investigating corruption :-

    http://www.tamilnet.com/art.html?catid=13&artid=37734

    This may yield quicker and better results – we will wait and see.
    Other PCs could do the same.

  • 1
    0

    Although Mr. Kodithuwakku has been fighting corruption by filing many public interest cases,the supreme court and appeal courts had treated him harshly solely b’cos he does not conform to the accepted norms.However the judges themselves had been eating out of the hands of the Rajapaksas,so no wonder the courts are slow to deal with the culprits.

  • 2
    0

    In a country where the Justice system corrupt it is impossible to fight against corruption. That is the hard truth whether one likes it or not.

    One must not hesitate to appreciate his fearless stance in this background, where probably no other lawyer even think of doing what he does under trying circumstances.

    He challenged 19th amendment before the Supreme Court. I was there along with a large gathering of other fellow lawyers. His Petition was a direct attack on all Judges in the Supreme Court who allowed Rajapakse to contest for a third term.

    19a provides removal of all Commissioners holding office in Various Commissions but it retains all the Judges in the Superior Courts, including the appalling appointments made to it by Rajapakse, that was openly condemned by the BASL.

    Mr Kodituwakku challenged that all the Judges had compromised the integrity of the Judiciary and had betrayed the Judicial Power of the People voilating the trust placed in the Judiciary by the people. He therefore challenged none of them have moral right to occupy office as Judges and they should vacate office.

    What happened to his petition was beyond emaginable.

    On the first day he was present in the Court for the whole day with us. Having waited for a moment of his absence in the Court house, on the second day, the Chief Justice Sripavan dismissed his Petition without even affording him an opportunity to submit a written submission he pleaded before the Court.

    There is big question that needs answer. Who is at wrong, is it a fault of the lawyer or isn’t is a case of pathetic situation of a failed Justice System that serves only the Judges themselves.

    This is food for thought for all citizens and most pseudo lawyers.

  • 0
    0

    Wow… [Edited out]

  • 1
    0

    Well done Kodi..We need you back to the department and make it rock as you were there.

  • 1
    1

    I wonder this bugger is trying to become DGC or CJ.

  • 1
    0

    The practice of any public official being rewarded for doing his/her duty is pre colonial, silly and corruption inducing. The practice of rewards in the customs is enormously corrupting and provides a very convenient cover for wide spread loot.

    I have personally observed – not recently but during the 70-77 austerity period- customs officers at the airport openly pocketing items from baggage they were “examining”. They were a disgrace and a pain. That was the character of the Dept.

    A strict regimen of annual asset declaration and checkshould be mandatory for all officers in Customs, Police and Inland Revenue.

    But then in Sri Lanker ….

  • 0
    0

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