Supreme Court refuses to register petition demanding a review of its verdict on Ncell taxA full verdict of the court last month had fixed outstanding tax dues of the telecom company at Rs21.1 billion against tax authority’s claim of Rs39.06 billion.
The Supreme Court on Tuesday refused to register a petition that a group of campaigners wanted to file, demanding a review of the highest court’s verdict on reducing the outstanding tax liability of Ncell, a private sector telecom operator.
A full verdict of the court released on November 21 had fixed the outstanding capital gains tax of Ncell at Rs21.1 billion against tax authority’s claim of Rs39.06 billion.
Surendra Bhandari, one of the lawyers who had drafted the petition, confirmed that the court rejected their writ, saying the verdict of the Supreme Court full bench could not be challenged.
The campaigners had first approached the court on December 2 but the very next day the registrar decided to reject the writ.
They again approached the court on December 8, asking the court to vacate the registrar’s decision.
“After hearing the application on Tuesday, the court upheld the registrar’s decision,” said Bhandari.
He said that the court’ decision has blocked further legal remedy in the case.
The campaigners had claimed in their petition draft that the latest verdict of the Supreme Court of not fining the Ncell as per the section 120 (A) of the Income Tax Act is contrary to its own February 6 verdict.
“Our claim is that Ncell is subject to a 100 percent fine as per section 120 (B) of the Income Tax Act, as the company had delayed paying tax deliberately,” said Bhandari.
On August 26, a full bench of Justices Tej Bahadur KC, Purusottam Bhandarik, Dambar Bahadur Shahi, Susmalata Mathema and Manoj Kumar Karna had scrapped the tax liability determined by Large Taxpayers’ Office, stating that additional fees imposed as per Section 120 (A) of the Income Tax Act should not be part of total tax liability of Ncell.
In its full verdict released on November 21, the Supreme Court had determined the outstanding tax to be paid by the company.
As the Large Taxpayers’ Office was preparing to recover the outstanding tax as per the court verdict, an international tribunal said last week that the company does not need to pay the capital gains tax for the time being from the three-year-old buyout deal, thereby making the issue more complicated.
Axiata (UK), Ncell’s parent company, announced on December 19 that the International Centre for Settlement of Investment Disputes (ICSID), a body under the World Bank, on December 18 had issued a provisional order, staying the Nepali government agencies from recovering the outstanding tax amount.
Question is now being asked whether the ruling of the ICSID Tribunal, which was formed as per the request of the Ncell and Axiata (UK), prevails over domestic laws and the Supreme Court’s verdict.