Adv. Srijana Adhikari et al. v. Inland Revenue Department et al. (Writ No.: 082-WO-0228)
Background of the Case
Advocate Srijana Adhikari and Chartered Accountant Shailendra Uprety filed a Public Interest Litigation before the Supreme Court of Nepal challenging Section 10(d) of the Excise Act, 2058.
The petitioners argued that the section allows excise officers to determine excise duty for an indefinite period of time for minor offences, creating legal uncertainty and impeding the fundamental right to freedom to practice any profession or carry on any occupation.
Previously, the Finance Act, 2065 introduced a four-year limitation period for excise duty assessment, requiring the Excise Officer to determine duty within four years from the date of filing the excise return (except in cases of fraud). However, the Finance Act, 2067 removed this limitation, giving excise officers the authority to assess excise duty without any statutory time restriction, even many years after filing.
The petitioners emphasized that:
- Other tax laws in Nepal, such as the Income Tax Act and VAT Act, include a four-year limitation period.
- International practice, including in India, prescribes reasonable limitation periods for excise assessment.
- The absence of a limitation period violates constitutional principles of legal certainty, fairness, and proportionality, and imposes indefinite risk on taxpayers.
Relief Sought
The petitioners seek a writ of mandamus directing the Government to:
- Amend the Excise Act to reintroduce a reasonable limitation period for excise duty assessments, similar to the earlier four-year provision, except in cases of fraud.
- Ensure that excise assessment powers are proportional and predictable, protecting taxpayers from indefinite legal exposure.
Current Status
The case is currently sub-judice before the Supreme Court of Nepal.
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