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Observations by Cecil Aluthwela

In a series of articles former Deputy Commissioner of (Appeals) Department of inland Revenue Cecil Aluthwela gives his observations on the article titled " On tax appeals - Some reflections" by Stanley Fernando (BA Ceylon) Attorney-at-Law Lecturer and Examiner in Tax Law, Council of Legal Education, Visiting lecturer in Tax Law, Faculty of Law, University of Colombo which appeared in the July 1993 issue (vol.1 No.1) of the Journal of the Institute of Taxation.

These observations present different points of view which may be of benefit and interest to the tax paying public.

The Inland Revenue Act (Sri Lanka) referred to is Act No 28 of 1979. The sections referred referred to are those in the Act.

The magistrate adjourned with a view to obtaining the departmental point of view.

At the adjourned hearing the magistrate turned to the officer and said, "you file cases for recovery of tax and when the case comes up, you are not available to support your stand that the tax should be imposed as a fine". In this the magistrate was quite right. The taxpayer could take all manner of defences as to why the tax should not be imposed as a fine. He may take up the position (a) that the magistrate has no jurisdiction (b) that he has paid the tax due (c) that he is not the defaulter.

Now, how is the magistrate to find out the correctness of all this except from an officer of the department.

But the law does not give the officer locus standi or right of representative at these proceedings. Thus, if an officer of the department could appear in court and take part in the proceeding when has no locus standi, what objection could there be to an officer of the department appearing before its head at an appeal hearing?

Now that an assessor has no statutory right of representation at an appeal hearing before the Commissioner-General Mr. Fernando submits.

"It would be more in conformity with the law for the Commissioner-General at his discretion to obtain the assistance of the Assessor by summoning him as a witness and leading his evidence under the powers vested in the Commissioner-General of Inland Revenue under Section 117 (8) of the Act".

Evidently Mr. Fernando has succeeded in persuading Prof. G. L. Peris, formerly the Honourable the Junior Minister of Finance, Vice-Chancellor and Professor of Law, University of Colombo that,

1. The role of the assessor at an appeal hearing before the Commissioner-General is an anomalous feature.

2. That it will be in conformity with the law for the Commissioner-General to summon the assessor as a witness in terms of Section 117 (8) of the Act.

Accordingly, at a lecture on 21st May 1992, Prof. Peris said:-

"There is an anomalous feature of the current practice which calls for comment.

"This concerns the role of the assessor at the hearing before the Commissioner-General. Although the law does not concede to the assessor any formal entitlement to be present at the hearing and to make submissions in support of his own assessment, the contemporary practice appears to have acquiesced not only in the presence of the assessor at the hearing of appeal but in the attribution to the assessor of an adversarial role, qua prosecutor, adducing evidence, examining and cross examining witnesses including the appellant and making submissions.

Mr. Stanley Fernando, the depth and range of whose knowledge of the tax laws of the Republic have immeasurably enhanced the quality of the courses of instruction on the subject in the Faculty of Law of the University of Colombo, has argued with great cogency that this practice is not sanctioned by the applicable law. In particular he has relied on the following considerations.

(a) The appeal is made to the Commissioner-General who is under no obligation to refer the matter back to the assessor.

(b) The appellate procedure contemplated before the Commissioner-General by the legislation does not assume the complexion of an adversarial contest in which the assessee is the accused and the assessor functions as the prosecutor, nor can the proceeding be conceived of properly as a LIS INTER PARTIES between the assessor and the assessee;

"The emphatic view expressed by Mr. Stanley Fernando that it would be more in conformity with the law for the Commissioner-General at his discretion to obtain the assistance of the assessor by summoning him as a witness and leading his evidence under the power vested in the Commissioner-General of Inland Revenue in terms of section 117(8) of the Act, is certainly worthy of serious considerations"

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