Adv. Srijana Adhikari et al. v. Ministry of Finance et al. (Writ No.: 080-WO-0086, Mandamus)
Background of the Case
Advocate Srijana Adhikari and Chartered AccountantShailendra Uprety filed a writ petition before the Supreme Court of Nepal challenging Section 42(7) of the Finance Act, 2080, which amended Schedule-1 of the Value Added Tax (VAT) Act, 2052.
The amendment removed 167 items, including essential food items such as potatoes, onions, peas, beans, and fruits, from the list of VAT-exempt goods, thereby subjecting them to VAT.
The petitioners argued that the imposition of VAT on essential food items:
- Increased the cost of basic necessities.
- Disproportionately burdened low-income and marginalized groups.
- Violated fundamental rights guaranteed under the Constitution of Nepal, particularly the Right to Food.
Petitioner sought a writ of mandamus declaring the amendment unconstitutional and an interim order restraining the Government from levying VAT on these goods.
Court’s Decision
During the Fiscal Year 2082/83, the Finance Act, 2082 re-included the essential food items under Schedule-1 of the VAT Act, restoring their VAT-exempt status.
Since the petitioners’ demand of Mandamus had already been addressed through legislative action, the Supreme Court dismissed the writ petition as having become infructuous.
The full text of the judgment has not yet been published.
Significance of the Case
- Protection of Fundamental Rights: The case highlighted the importance of safeguarding access to essential food items and ensuring that tax policy does not violate the constitutional Right to Food.
- Responsive Legislative Action: Demonstrated how judicial scrutiny and advocacy can prompt policy adjustments to protect vulnerable populations.
- Public Awareness: Raised awareness about the impact of taxation on basic necessities and the need to balance revenue generation with social equity.
- Precedent for Future VAT Policy: Provided a reference point for considering the constitutionality and social impact of VAT amendments on essential goods in Nepal.
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