The High Court has published its full verdict dismissing two writ petitions filed by Grameen Kalyan, a non-profit social business company founded by former chief adviser to an interim government Muhammad Yunus, challenging the legality of a tax commissioner's decision to demand Tk666 crore in taxes for five assessment years following a reassessment.
In its observations, the court said Grameen Kalyan was legally obligated to pay taxes under Section 74 of the Income Tax Ordinance, 1984, when it filed returns for the relevant assessment years under Section 75(2)(d)(iii), read with Section 121A(4B).
The court also said Grameen Kalyan had no legal basis to treat withholding tax paid by Grameen Telecom as tax paid by the organisation itself.
The separate verdicts, spanning 32 and 15 pages, were published on the Supreme Court website today (12 October). On 10 September, a High Court bench comprising Justice Md Mozibur Rahman Miah and Justice Rezaul Karim delivered the verdicts.
In the full verdict, the court observed that Section 173 of the Income Tax Ordinance explicitly empowers a tax commissioner to correct mistakes on their own initiative.
The commissioner made the corrections within 13 days of issuing the previous order, after serving proper notice and giving the taxpayer an opportunity to be heard, the court said.
During the hearing, the authorised representative of Grameen Kalyan failed to provide evidence that the taxes payable against the organisation's returns for the relevant assessment years had been paid, according to the verdict.
The High Court had earlier dismissed the two writ petitions on 4 August 2024. However, the same bench withdrew that decision on 29 August after it emerged that the second judge on the bench had previously represented the government as a deputy attorney general in the cases.
The bench considered the earlier verdict defective because of the judge's prior involvement. The case records were subsequently sent to the chief justice, who assigned the matter to a bench led by Justice Mozibur.
Following a fresh hearing, the bench delivered its verdict on 10 September.
Senior lawyers Fida M Kamal, Sardar Jinnat Ali and Abdullah Al Mamun represented Grameen Kalyan during the proceedings. Deputy Attorney General Mohammad Abdus Samad Azad represented the state.
After the verdict was announced on 10 September, Deputy Attorney General Mohammad Abdus Samad Azad told journalists that Grameen Kalyan owed approximately Tk666 crore in taxes for five assessment years.
He said the organisation had filed two writ petitions challenging the tax commissioner's decision to demand the outstanding amount. "After the final hearing, the High Court discharged the rules, meaning the tax demand remained enforceable."
Abdus added that the tax department would issue a demand notice allowing 30 days for payment after receiving the verdict.
The dispute concerns tax assessments for the 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17 assessment years. Grameen Kalyan filed the two separate writ petitions in 2017 challenging the tax demand following reassessment.
After the initial hearings, the High Court issued rules and, on 17 October 2023, disposed of them with directions and observations. The court set aside the tax commissioner's order but allowed Grameen Kalyan, subject to conditions, to appeal against the decision of the additional tax commissioner before the appellate authority within 60 days, with the delay condoned.
The National Board of Revenue (NBR) subsequently filed separate leave-to-appeal petitions with the Appellate Division against that verdict.
On 11 March 2024, the Appellate Division disposed of the leave-to-appeal petitions and directed the High Court to rehear the substantive issues raised in Grameen Kalyan's writ petitions.
Following the rehearing, the High Court initially dismissed the petitions on 4 August 2024 before withdrawing that decision later that month. The matter was subsequently assigned to the bench led by Justice Mozibur, which ultimately dismissed the petitions following the fresh proceedings.
In the concluding part of the full verdict, the court said it had found no legal error or illegality in the challenged order that warranted judicial intervention. It therefore discharged the rules without any order as to costs and vacated the earlier stay order.
The court also directed the tax commissioner to immediately issue the necessary demand notice to recover the outstanding taxes from the petitioner.
On 14 September, Grameen Kalyan filed an application with the Appellate Division seeking a stay on the High Court verdict. Following a hearing, Justice Farah Mahbub, sitting as a chamber judge, declined to suspend the verdict, leaving the High Court decision in force.
The chamber court also indicated that it would not intervene in the matter until the full verdict was published.
On 14 September, Grameen Kalyan's lawyer Barrister Khaja Tanvir Ahmed told the media that although the High Court verdict remained in force, the NBR would not take effective action until the full judgment was published. "The Attorney General's Office had also confirmed the matter before the court."
Following publication of the full verdict, Barrister Khaja Tanvir Ahmed told The Business Standard that Grameen Kalyan would file a civil petition for leave to appeal against the High Court decision as soon as possible.