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Unlawful Exaction of Tax and Constitutional Guarantees: Insights from a Bangladesh High Court Judgment

In this case, Aramit Limited Vs. National Board of Revenue Dhaka and Ors, 17 BLC 527 — the petitioner challenged the imposition of Value Added Tax (VAT) on goods at a stage where no value had been added. The respondent insisted on imposing the VAT liability on the petitioner by registering their “sales centers” under section 15 of the Act. The petitioner argued that such an imposition of VAT is beyond the scope of the Act and violates the Constitutional right to protection from unlawful exaction of tax.

Facts of the case

The petitioner is a manufacturer and supplier of goods in Chittagong. The petitioner’s goods are delivered to distributors in Dhaka, who then sell the goods to customers. The petitioner paid VAT on the goods at the supply stage in Chittagong. The respondent insisted on imposing VAT liability on the petitioner by registering their “sales centers” in Dhaka, claiming that value had been added to the goods at the sales centers.

Point of dispute

The point of dispute in this case is whether the respondent has the authority to impose VAT on goods at a stage where no value has been added, and whether the imposition of VAT in this manner violates the Constitutional right to protection from unlawful exaction of tax.

Laws applied

The court applied Section 15 of the Value Added Tax and Supplementary Duty Act, 2012 and Article 83 and Article 31 of the Constitution of Bangladesh.

Legal analysis

The court analyzed the impugned order issued by the respondent, which sought to impose VAT liability on the petitioner by registering their “sales centers” under Section 15 of the Act. The court found that the respondent’s insistence on imposing VAT on goods at a stage where no value had been added was beyond the scope of the Act and violated the Constitutional right to protection from unlawful exaction of tax. The court also found that the use of the deeming device in the impugned order was extra-legal and unlawful, and that the order was issued without jurisdiction.saco de dormir the north face inferno bass jbl reset citiz nespresso machine ronnie fieg x puma disc blaze saco de dormir the north face inferno lov om udendørs belysning ronnie fieg x puma disc blaze měděná stolní lampa lego schneehose nike jordan 4 union lov om udendørs belysning bass jbl bewegungsmelder fassung e27 kaszmirow swetry angora Amazon costo cubre colchon sognare individual

Final verdict

The court found that the impugned order was issued without lawful authority and had no legal effect. The court held that no legal consequence followed from the respondent’s attempt to extract VAT on further value arbitrarily deemed to have been added to the original value of the petitioner’s goods in the facts and circumstances. The court declared the impugned order of no legal effect, and there was no order as to costs.