A writ petition that sought an order in the nature of a Writ of Mandamus compelling the Director General of Customs to conduct a formal Customs Inquiry into the alleged Rs. 16 billion revenue fraud which took place while importing 1675 units of high valued BMW Motor Cars during the last regime was yesterday fixed for June 29 by Court of Appeal.
This writ petition was filed by Murugesu Thayabaran, a former Director of the Central Investigation Directorate attached to Sri Lanka Customs through his counsel Nagananda Kodituwakku.
When the matter came up before Court of Appeal (President) Preethi Padman Surasena and Justice Arjuna Obeysekara, Mr. Kodituwakku sought an order to impound the passport of Heinz Adolf Reuter, the Chairman/Managing Director of Prestige Automobiles Pvt Ltd.
This case is to be heard in a different Bench on June 29.
The petitioner cited Director General of Customs Chulananda Perera, Additional Director General of Customs T.W.A. Senanayake, Deputy Director of Customs Saman de Silva, Heinz Adolf Reuter, the Chairman/ Managing Director Prestige Automobiles Pvt Ltd and Attorney General as respondents.
The Petitioner stated that during his tenure in the Customs Department, he had conducted a number of revenue fraud inquiries amongst which the matter referred to in this Petition is the biggest fraud ever detected by the Customs, the value of which is running into over 16 billion of government tax revenue defrauded by the 4th Respondent.
The Petitioner stated that the revenue fraud reported herein involves the importation of 1675 units of high valued BMW Motor Cars during the the period commencing from March 2011 to Oct 2014.
The Petitioner stated that all the vehicles referred to in this case have been imported on tax concessions granted to permits issued by the government to certain categories of people holding public office, wherein strict conditions had been stipulated in the permits, which included the specified sealing on the engine capacity and the value of the vehicle.
The Petitioner stated that in the permit itself, it is stipulated inter alia that any violation of the valuation threshold mentioned therein would result in the recovery of all levies exempted at the time of importation.
The Petitioner states that the evidence of the valuation of BMW motorcars provided to Sri Lanka Customs by the German Customs Investigation Bureau, during the pendency of the investigation, confirmed that the exporter had declared the true value to the German Customs whereas the 4th Respondent Chairman/Managing Director of Prestige Automobiles Pvt Ltd had deliberately concealed it and instead had allegedly presented a fictitious made-up invoice generated by another business entity namely Navigare International GMBH, Germany, apparently owned by the 4th Respondents created for the purpose of promoting 4th Respondent’s motorcar trade in Sri Lanka.
The Petitioner states that the investigation findings had revealed that the total number of 1,675 units of BMW motorcars had been imported under the tax concessionary permits with false values declared in order to be qualified to claim tax concession, thereby evading the payment of levies actually payable on those vehicles.
“Yet, it was further revealed that the 4th Respondent had recovered the true value of the vehicles from the permit holders under a false pretence that the said recovery was for handling and aftersales services”, he added. The Petitioner stated that had the true value of the vehicles been declared, the permits would have become a nullity since one of the primary conditions of the permits, the specified valuation threshold has been violated.
The Petitioner stated that the 4th Respondent had been allegedly engaged in this fraudulent trade practice for a considerable period of time and in some cases where BMW motorcars had been imported on concessionary permit schemes, the Customs Department has been able to recover the Original invoice sent by the BMW car manufacturer in Germany to the 4th Respondent’s Company and also the fictitious invoice generated by Navigare International GMBH in Germany for the identical vehicle, to claim the special concessionary rate of levy chargeable for permit cars.
The Petitioner states that there is a deliberate failure on the part of the 1st Respondent and the 3rd Respondent to perform their offices as required by law which clearly amounts to abusing, exceeding or misusing of the powers vested in the 1st and 3rd Respondents for improper purposes. The Petitioner states that therefore, on April 27,2017 he made a formal complaint on this serious abuse to the Commission to Investigate Allegations of Bribery or Corruption drawing its due attention to this major revenue fraud running into over 16 billion rupees.
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