Court declines to extend interim order

By Shamindra Ferdinando

The Court of Appeal, on 25 July, said that the final judgment on an unprecedented case of three associations of judicial officers moving Court against the imposition of Advanced Personal Income Tax (APIT) in terms of Inland Revenue Act No 24 of 2017 as amended by Act No 45 of 2022, should be delivered within three months.

Having said so, the Court declined to further extend its interim order that prevented the Justice Ministry from deducting the APIT from the monthly salaries of the High Court Judges, District Judges, Additional District Judges, Magistrates, Additional Magistrates and Presidents of the Labour Tribunal. The Court issued notices on the respondents in three petitions filed by the High Court Judges’ Association, the Judicial Service Association and Presidents of Labour Tribunals.

The bench comprised President of the Court of Appeal N. Bandula Karunaratna, Sobitha Rajakaruna, Menaka Wijesundara, D. N. Samarakoon and Neil Iddawala. The Court dealt with, what was called, an instant application filed in terms of Article 140 of the Constitution by three petitioners.

The petitions were fixed for argument on 22 and 26 September.

The respondents were A.S.M. Jayasingha, Chief Accountant, Justice Ministry, Wasantha Perera, Secretary, Justice Ministry, D. R. S. Hapuarachchi, Commissioner General of Inland Revenue, and the Attorney General. The respondents were represented by Nirmalan Wigneswaran, DSG, with M. Jayasinghe, DSG, and Shiloma David, SC.

Dr. Romesh de Silva, PC, with Sugath Caldera and Niran Anketell, appeared for two petitioners whereas Shammil J. Perera, PC, with Primal Ratwatte, Chamath Fernando and Duthika Perera, represented the other.

The petitioners stated that they sought intervention of Court in the absence of any other alternative to uphold and preserve the rights of judicial officers and safeguard the Doctrine of Separation of Powers, the independence and impartiality of the judiciary. Having told the Court that if the said judicial officers were subjected to APIT, an individual would be taxed annually to the tune of Rs 1,500,000, the petitioners declared the move was contrary to the United Nations Basic Principles on the independence of the judiciary.

They sought to recover the deducted taxes and suspend the deductions until the final determination of the case.

However, the Counsel for the respondents petitioners misrepresented material facts to the effect that judges had been subjected to APIT. The Court has been informed that there had been no change in the process and those who moved Court in this regard were subjected to APIT even before the enactment of the Inland Revenue (Amendment) Act No 45 of 2022. The SC has been told how the said Act applied to judges and the circumstances of both vehicle and housing allowances, too, subjected to taxation in terms of the Inland Revenue Act, as well as direction and guidelines issued by the Commissioner General of Inland Revenue.

The Counsel for the respondents also stated that the petitioners failed to bring to the attention of the Court of Appeal that the SC, in considering the Inland Revenue (Amendment) Bill, specifically considered whether the salary of judges is taxable and would impact the independence of the judiciary.