Chamber court stays order to recover Tk 6.66b in outstanding taxes from Grameen Kalyan

Following a reassessment, the Appellate Division’s Chamber Court has stayed a High Court order to take steps to recover outstanding taxes from Grameen Kalyan for five tax years.

Chamber Judge of the Appellate Division Justice Md Rezaul Haque passed the order on Sunday in response to two separate leave-to-appeal petitions filed by Grameen Kalyan challenging separate High Court judgments.

According to the state, the outstanding tax demand against Grameen Kalyan for the five tax years amounts to Tk 6.66 billion.

The Chamber Court has also fixed 13 December for hearings on the two separate leave-to-appeal petitions filed by Grameen Kalyan against the High Court judgments. The hearings will take place before the regular bench of the Appellate Division.

Grameen Kalyan was founded by Professor Muhammad Yunus, the former chief adviser to the caretaker government, who also served as the organisation’s chairman.

On 10 September, the High Court dismissed two separate writ petitions filed by Grameen Kalyan, discharging the rules issued in connection with the legality of the tax commissioner’s decisions on the tax demands for the tax years 2012–13, 2013–14, 2014–15, 2015–16 and 2016–17 following reassessment.

The High Court bench comprising Justice Md Mojibur Rahman Miah and Justice Rezaul Karim delivered the judgments.

The full texts of the High Court judgments dismissing the two writ petitions filed by Grameen Kalyan were published on 12 October. One judgment runs to 15 pages, while the other is 32 pages long.

The concluding portion of the 32-page judgment directed the respondents, including the relevant tax commissioner in Dhaka, to take the necessary steps to recover the outstanding taxes from the petitioner, Grameen Kalyan, as soon as possible in accordance with the law.

The concluding portion of the 15-page judgment directed the respondents, including the relevant tax commissioner in Dhaka, to take the necessary steps regarding the outstanding tax by issuing a notice to the petitioner.

Following publication of the full judgments, Grameen Kalyan filed two separate leave-to-appeal petitions. Both petitions appeared on Sunday’s cause list of the Chamber Court.

Senior lawyers Fida M Kamal, Abdullah Al Mamun and Sardar Jinnat Ali represented Grameen Kalyan in court. Deputy Attorney General Mohammad Mehdi Hasan appeared for the state.

Following the court order, senior lawyer Abdullah Al Mamun told Prothom Alo that the Chamber Court had stayed the High Court’s directive to take the necessary steps to recover the outstanding taxes from Grameen Kalyan as soon as possible.

No steps can be taken to recover the money for the time being, he said.

The matter has been listed for hearing before the regular bench of the Appellate Division on 13 December. A final decision on the issue will follow the disposal of the leave-to-appeal petitions, he added.

Deputy Attorney General Mohammad Mehdi Hasan said the operative portions of the High Court’s directions in the two separate judgments had been stayed.

He told Prothom Alo that one judgment had directed the respondents to take the necessary steps to recover the outstanding taxes from the petitioner, Grameen Kalyan, as soon as possible. The other had directed them to take the necessary steps by issuing a notice concerning the petitioner’s outstanding tax liability.

The operative portions of both judgments have been stayed, he said, adding that the two leave-to-appeal petitions had been scheduled for hearing before the regular bench of the Appellate Division on 13 December.

According to lawyers familiar with the case, Grameen Kalyan entered into an agreement with Grameen Telecom under which investments were made in Grameenphone. Under the agreement, Grameen Kalyan was entitled to 42.65 per cent of the profits earned from dividends received on the shares.

However, questions arose over whether the money received constituted dividend income or income from other sources. The tax authorities maintained that the money was, in effect, interest or income earned from investments and should therefore be classified as “income from other sources”, rather than dividend income.

In 2017, Grameen Kalyan filed two separate writ petitions challenging the legality of the tax commissioner’s decisions concerning the tax demands for the five tax years following reassessment. After preliminary hearings, the High Court issued rules in the cases.

Following final hearings, the High Court disposed of the rules on 17 October 2023, issuing a judgment containing directions and observations.

The judgment set aside the tax commissioner’s orders. It also allowed Grameen Kalyan, subject to conditions and after condoning the delay, to file appeals within 60 days in accordance with the law before the appellate authority against the decisions of the additional tax commissioner.

The National Board of Revenue (NBR) subsequently filed separate leave-to-appeal petitions challenging the High Court judgment.

On 11 March 2024, the Appellate Division issued an order disposing of the separate leave-to-appeal petitions filed by the NBR. It directed the High Court to rehear the substantive issues raised in Grameen Kalyan’s writ petitions.

Following the rehearing, a High Court division bench delivered a judgment on 4 August 2024 dismissing the two writ petitions. However, the same bench recalled the judgment on 29 August that year.

The reason given was that the second judge on the division bench had previously contested the cases on behalf of the government while serving as a deputy attorney general. As he had represented one of the parties in the proceedings, the judgment was considered defective. The case records were subsequently sent to the Chief Justice.

In an order dated 13 May, the Chief Justice referred the matter to a division bench led by Justice Md Mojibur Rahman Miah for disposal.

After hearing the cases, the bench discharged the rules and delivered judgments containing directions. Following the separate leave-to-appeal petitions filed by Grameen Kalyan against those judgments, the operative portions of the High Court’s directions have now been stayed.