A short notice to two S Alam firms for making a huge payment to the exchequer, to the tune of Tk 35.38 billion in evaded VAT compounded with Tk 35.31-billion penalty and interest, comes into question from the court.
The High Court questioned the legality of the notification issued by the Commissioner of Customs, Excise and VAT in Chattogram that asked for clearing the back pay within 15 working days.
And the HC bench concerned issued a rule upon the relevant bodies of government to explain in 10 days why the VAT Determination Order issued on June 9 this year under Value-added Tax and Supplementary Duty Act "without affording personal hearing to the petitioner shall not be declared illegal".
In the rule it also asks the respondents to explain as to why "the instant matter shall not be remanded to the Commissioner of Customs, Excise and VAT in Chattogram with a direction upon him to dispose of the matter "in strict compliance with Sections 73 and 85 of the Value Added Tax and Supplementary Duty Act and after hearing the parties".
The High Court bench of Justice Zafar Ahmed and Justice Sardar Md Rashed Jahangir passed the orders after hearing two separate writ petitions filed by S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd.
Senior Advocate Ahsanul Karim appeared in the court hearing on behalf of the writ petitioners while Deputy Attorney-General Samarendra Nath Biswas represented the state.
In a briefing lawyer Ahsnaul Karim said, "Two companies submitted a compliance report to the VAT authority on March 18 this year in reply to their demand. Later, the authority on April 17 this year issued an order and fixed June 5 for further order.
"However, we on June 4 applied for the extension of the date. VAT authority didn't pass any order on that application. Finally, they passed their final order on June 9 to pay their demanded amount."
Quoting an NBR audit report he said S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd have unpaid VAT and consequent penalty worth over Tk 70 billion as they allegedly evaded VAT by various means, including by presenting lower purchase and sales data in VAT returns between 2019 and 2022.
During the period, the two companies of the burgeoning conglomerate "evaded" Tk 35.38 billion in VAT, for which they were fined another Tk 35.31 billion.
The audit was carried out by the field office of Customs, Excise & VAT Commissionerate, Chattogram, and subsequently reviewed by a five-member committee headed by an additional commissioner, Chattogram VAT Commissionerate, which drew the same conclusion on the tax evasion.
On June 9, the Customs, VAT & Excise Commissionerate, Chattogram, in its adjudication orders asked the companies to pay the king's ransom to the state coffer within 15 working days.
The deadline is to end on July 3, and if the companies do not appeal against the order, the regulator will "take steps to realise the evaded VAT, penalty and interest as per the law," NBR officials said.
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