Magistrate rejects instalment plea; Orders Mendis firm to settle tax arrears

By Bhagya Silva  

The Colombo Additional Magistrate Oshadha Migara Maharachchi today ordered the director suspect of W. M. Mendis & Company to immediately settle the outstanding Value Added Tax dues allegedly defaulted to the State, without any omission.   

The order was issued rejecting a request made by the defence to grant relief by permitting the payment of the outstanding tax in monthly instalments of Rs. 5 million from February 2023.   

The Magistrate made this order when the case filed by the Commissioner General of Inland Revenue, seeking to recover Rs. 996 million in unpaid taxes allegedly defaulted by W. M. Mendis & Company for the years 2016–2017, was taken up before court.   

Counsel appearing for the defence submitted that the company was facing financial difficulties in settling the instalments, as its liquor licence had been suspended by the Excise Department and its distillery operations had been referred for auction through banks. Accordingly, counsel requested court to allow a revision of the instalment payment plan.   

Appearing for the Commissioner General of Inland Revenue, Counsel Dinesh Perera informed court that five cases had been filed against the directors of the company to recover the outstanding dues. He further stated that in one such case, the directors had already been sentenced to imprisonment for failure to pay taxes, while another case is scheduled to be taken up on June 25. He also noted that a separate case relating to non-payment of taxes for the years 2019–2020 is currently pending before the Court of Appeal.   

Having considered the submissions, the Additional Magistrate observed that the company had exceeded the prescribed period for payment of taxes and ordered that the dues be settled in accordance with the law.   

The court also directed the Inland Revenue Department to report on the progress of investigations on May 25.