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Former CJ Sarath N Silva and DGC Sarath Jayathilake paves way for revenue loss in billions

Letter to the Editor

(March 25, Colombo, Sri Lanka Guardian)
In the ‘landmark’ judgement [SC Appeal 49/2008] pronounced by the former CJ Sarath N Silva it was held that the seizure of goods under the Customs Ordinance after goods have been delivered upon payment of duties, is manifestly illegal and the correct procedure would be to recover the element of revenue defrauded by the importer if any as ‘additional duties’ and release the goods. It was further held in this judgment that application of Section 125 of the Customs law against the fraudster and forfeiture of goods is inconsistent with the ‘scheme and structure of the Customs law’.

It was further held that the seizure is affected in a situation where a recovery process duties defrauded is the ‘proper course of action’ ‘solely for the enrichment of the Customs Officers’ and the Customs Officers effect purported seizures on ‘tenuous grounds causing harassment to importers’.

We, the Customs Whistleblowers, can confirm with certainty that Customs would not have lost this case, which opened the floodgates for the revenue fraudsters if not for the deliberate inaction by the DGC Sarath Jayathilake who prevented the Respondent, K Premanath in the case from making an affidavit to the Supreme Court. The Respondent should have clearly stated by way of an affidavit to the Court that the importer had cleared the good defrauding the government revenue with false description of the goods, purportedly with the connivance of the officers appointed to examine the goods.

Had the Respondent, Deputy Director, K Premanath, made the factual position clear to the Supreme Court that there was a willful revenue fraud committed by the importer, the CJ Sarath N Silva would not have able to say his the judgment that the Respondent K Premanath had agreed with the classification of the importer and delivered the goods relying on the classification of goods - description of goods as furnished to Customs by the importer - which was factually false as the importer had cleared the goods with false description that attract the lower rate of customs duties.

Why the bad law created by CJ Sarath Silva is clearly detrimental

From the day this infamous judgment was pronounced by CJ Sarath N Silva there are series of cases [full list of all such cases will follow soon], where the customs confiscated goods cleared defrauding the government revenue, have been challenged before the Court of law and the decision by the customs quashed, relying on the bad law created by CJ, Sarath N Silva. From the peoples’ and the country’s point of view, we can say that this trend is extremely harmful and it had made the whole customs administration defunct against the organized revenue fraudsters who are encouraged to defy the customs law and defraud the government revenue at will. In the event any fraud committed by them is detected, thanks to the new law created, the fraudster can simply get away from any punishment by paying the government revenue defrauded by him. Unfortunately, the incumbent DGC, Sarath Jayathilalke, who clearly refuse to tolerate any preventive measures being taken against organized revenue fraudsters, simply maintain absolute silence on this extremely harmful judgment. So far no tangible action whatsoever has been taken by him to get the bad law revised by the Supreme Court and we urge the President Rajapakse, who is also the Finance Minister to intervene and to take remedial measures as soon as possible to arrest the situation and to stop the colossal loss of government revenue, clearly due to inaction by the Customs administration.

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