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COPA baffled by massive rewards for Customs at the expense of Treasury

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Question mark over Tax Appeals Commission

70% of fine on Lanka Coal ends up with officers

By Shamindra Ferdinando

The cash-strapped government hasn’t been able to recover tax revenue running into billions of rupees, in spite of sporadic interventions made by the Parliamentary Watchdog, the Committee on Public Accounts (COPA).

 According to a report submitted to Parliament on July 20 by COPA, the situation has been further complicated by the Customs receiving substantial amounts, as rewards, from fines imposed on tax defaulters, at the expense of the Treasury.

 Prof. Tissa Vitarana, in his capacity as the Chairperson of the 22-member COPA, has submitted the report.

 The COPA has questioned the Customs why prominent palm oil importers Pyramid Wilma Pvt Ltd and Naratha Agro Industries (Pvt) Ltd. were allowed to appeal in 2019 against the Attorney General’s decision that loss of revenue suffered by the Treasury to the tune of Rs 6.130 bn during 2013-2016 period should be charged from 2013 instead of 2016 as recommended by a committee that inquired into the irregularities.

Pointing out that the Tax Appeals Commission couldn’t accept appeals made after the stipulated 3 month period following a particular decision, COPA has instructed Director General of Customs, Maj. Gen (retd) Vijitha Ravipriya to inform the Tax Appeal Commission. DG, Customs has done so on Feb 2, 2021, COPA according a copy of the report made available to The Island.

 Tax Appeals Commission has been established in terms of Tax Appeals Commission Act No 23 of 2011 (subsequently amended).

 COPA has also dealt with an unprecedented case of Sri Lanka Ports Authority (SLPA) and Customs being involved in a costly case wherein the latter was seeking 50 percent of a fine imposed on SLPA as a reward for those involved in the inquiry. According to COPA proceedings, the SLPA had been blamed for defaulting on the payment of Rs 916,526 over the import of gantry cranes and other equipment worth Rs 11,498,829,084 way back in 2011.

 In spite of talks involving stakeholders, including the Treasury as well as the House watchdog over the years, the issue hadn’t been resolved as both parties spent quiet a lot on lawyers.

 Customs have sought a staggering 50 percent as a reward for officers from the fine imposed on the SLPA. The Consultative Committee on ports and shipping has inquired into the possibility of the Treasury taking the entire sum.

 COPA has questioned the rationale in one government institution receiving cash reward at the expense of another as it caused quite a problem. According to the COPA report made available to The Island, the watchdog has requested Chief Accounting Officer/Accounting Officer to send all relevant reports and documents to parliament before the Customs appeared before Prof. Vitharana’s outfit in two months.

 Prof. Tissa Vitharana told The Island that remedial measures should be taken to improve the revenue collection process. Appreciating the services rendered by members of his committee, the political veteran said that the need to enhance state revenue couldn’t be ignored. The LSSPer noted that the government income had now fallen very much less than 10 percent of the GDP, a situation all should be seriously concerned about.

 COPA has examined the legal wrangle involving the Customs and the SLPA against the backdrop of Customs officers receiving half of Rs 205 mn imposed on Lanka Coal Company (Pvt) Ltd as rewards due to the payment being categorized as a fine instead of an additional tax. The company in question has been formed by CEB (60%), Treasury (20%), Ceylon Shipping Corporation (10%) and SLPA (10%). COPA pointed out that in addition to taking 50 % of the so called fine, Customs had secured a further 20% (Rs 41 mn) for their welfare and management fund leaving Rs 61.5 for the Treasury.

 COPA has underscored the need to amend relevant laws to prevent recurrence of such irregularities.

 COPA has revealed a spate of instances wherein due to range of factors, including raging Covid-19 epidemic had been blamed on the inordinate delay in settling a substantial number of tax appeals. The tax and penalties pertaining to 1,108 appeals amounted to a staggering Rs 18,684,603,316 whereas only 49 were finalized.

 

 



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Gnanasara Thero absconding after SC ruling

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Ven. Galagoda Aththe Gnanasara Thero was not at his temple in Rajagiriya when prison officials visited the premises yesterday to take steps following the Supreme Court ruling that nullified the presidential pardon granted to him, police sources said.

Prison officials who visited the temple on Nawala Road, Rajagiriya, were reportedly informed by those present that the Thero’s whereabouts were unknown. The development comes a day after the Supreme Court declared former President Maithripala Sirisena’s 2019 pardon of Gnanasara Thero null and void.

The three-member Supreme Court bench comprising Justices Janak De Silva, Dr. Sobhitha Rajakaruna and Sampath B. Abayakoon held that the pardon was arbitrary, violated the public trust and principles of natural justice, and was made beyond the proper exercise of the President’s constitutional discretion.

The case arose from Gnanasara Thero’s conduct at the Homagama Magistrate’s Court in January 2016 during proceedings relating to the disappearance of journalist and political cartoonist Prageeth Eknaligoda.

The Court of Appeal convicted him on four counts of contempt of court in 2018 and imposed concurrent prison terms amounting to six years. He had served about nine months when Sirisena granted him a presidential pardon on May 23, 2019.

The Supreme Court found that although Article 34 empowers the President to grant pardons, that power is held in trust for the people and is subject to constitutional limitations and judicial review. The Court concluded that Sirisena had effectively acted on the recommendation of the Additional Secretary (Legal) without demonstrating that he had independently considered the relevant material.

Justice De Silva held that the pardon was “arbitrary”, violated public trust and the rules of natural justice, and was ultra vires the President’s powers. The Court consequently found that the decision violated the fundamental right to equality guaranteed by Article 12(1) of the Constitution.

The ruling effectively restores the legal position under the original conviction, leaving Gnanasara Thero without the benefit of the 2019 pardon. The Supreme Court also clarified that a pardon does not erase a conviction or sentence, but merely relieves an offender from serving the sentence to the extent specified in the pardon.

Gnanasara Thero, the General Secretary of the Bodu Bala Sena, had been convicted over his conduct during proceedings concerning the disappearance of Eknaligoda, who went missing in January 2010 and has not been located.

Sandhya Eknaligoda, Prageeth Eknaligoda’s wife, was among those who challenged the presidential pardon before the Supreme Court, alongside the Centre for Policy Alternatives and its Executive Director Dr. Paikiasothy Saravanamuttu.

The detailed account of the judgment indicates that the Court’s ruling primarily nullified the pardon and restored the legal effect of the original sentence, with the implementation of the sentence falling to the relevant authorities.

Police sources said that the Supreme Court, however, did not permanently close the door on executive clemency. It held that a future President could grant Gnanasara Thero another pardon, provided the power is exercised lawfully and after proper consideration of all relevant material.

The Supreme Court has so far overturned three presidential pardons granted to two former Presidents. In January 2024, the Court declared former President Gotabaya Rajapaksa’s pardon of former MP Duminda Silva unlawful and invalid. In June 2024, it invalidated two pardons granted by former President Maithripala Sirisena to Royal Park murder convict Jude Shramantha Anthony Jayamaha — the first in May 2016, which commuted his death sentence to life imprisonment, and the second in October 2019, which released him from prison. Jayamaha, who was convicted of the murder of 19-year-old Yvonne Johnson, remains at large. Most recently, on September 10, 2026, the Supreme Court declared Sirisena’s 2019 pardon of Ven. Galagoda Aththe Gnanasara Thero null and void, ruling that it was arbitrary and inconsistent with the Constitution.

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House to debate 22A, Judicature Bill next week

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Parliament is scheduled to debate the Twenty-Second Amendment to the Constitution Bill and the Judicature (Amendment) Bill on September 24 and 25, subject to the Speaker’s announcement following the delivery of the Supreme Court determination on petitions filed against the Bills.

The programme for the Parliamentary Week from September 22 to 25 was decided at a meeting of the Committee on Parliamentary Business held on Thursday (10) under the chairmanship of Speaker Dr. Jagath Wickramaratne.

On each sitting day, Parliamentary Business under Standing Orders 22(1) to 22(6) will be taken up from 9.30 am to 10 am, followed by Questions for Oral Answers from 10 am to 11 am Questions under Standing Order 27(2) will be taken up from 11 am to 11.30 am.

On Tuesday (22), the Orders published in Extraordinary Gazette No. 2497/37 under the Petroleum Resources Act and the Promotion of Export Agriculture (Amendment) Bill will be debated from 11.30 am to 5 pm.

The Tredso Development Foundation (Incorporation) Bill, a Private Member’s Bill, will then be taken up for Second Reading before being referred to the Legislative Standing Committee.

An Opposition motion at the Adjournment Time will follow.

On Wednesday (23), the Chartered Institute of Media Professionals of Sri Lanka Bill will be debated from 11.30 am to 5 pm, followed by Questions at the Adjournment Time.

The Second Reading debate on the 22nd Amendment Bill and the Judicature (Amendment) Bill is scheduled for 11.30 am to 7 pm on Thursday (24) and Friday (25).

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Wrong house targeted in underworld grenade attack: Two children killed

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Two children aged 11 and 17 were mistakenly killed and their 55-year-old father injured in an early morning hand grenade attack on Sirisangabo Mawatha on Friday. Police investigations later revealed that the attackers targeted the wrong house during an ongoing underworld clash.

Three police teams have been deployed to investigate the attack, which occurred at around 3 am.

According to police, a man who arrived near the house in a three-wheeler knocked on the front door before throwing a grenade into the premises and fleeing.

The victims were identified as 17-year-old Kasun Rashmika and 11-year-old Duminda Gihan. Their 56-year-old father, Nalin Thusantha Perera, was seriously injured and admitted to the Kalubowila Teaching Hospital.

Police said the injured man’s brother was allegedly a close associate of a drug trafficker known as ‘Sando’ and had also been accused of involvement in drug trafficking.

The brother lives in a house adjoining the one targeted in the attack, and police suspect the grenade may have been thrown at the wrong house.

Police are also investigating information that the attack was allegedly carried out at the direction of several overseas-based drug traffickers, identified as Pandithage Shantha Kumara alias ‘Kos Malli’, Samantha Perera alias ‘Chuwa Samantha’, ‘Kudu Avishka’ and ‘I.D.’

Police said the attack was believed to be linked to an ongoing conflict between two underworld factions, which have targeted each other’s associates in shootings and grenade attacks. More than 20 people have reportedly been killed in such attacks.

Security agencies are also investigating alleged links between one faction and overseas-based criminals including Kanjipani Imran, Unakuruwe Shantha, Dubai Gagana and Handaya.

Security agencies have also received information that overseas-based criminals identified as Kanjipani Imran, Unakuruwe Shantha, Dubai Gagana and Handaya are allegedly behind the supply of firearms and drugs to the faction associated with Kos Malli and Chuwa Samantha.

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