W.M. Mendis’ liquor licence to be suspended today over Rs. 5 b tax arrears

Thursday, 5 December 2024 01:25 - - {{hitsCtrl.values.hits}}

The Department of Excise will suspend the liquor manufacturing licence of W.M. Mendis & Co. Ltd., effective today (5), due to the company’s failure to settle excise taxes and surcharges amounting to Rs. 5.7 billion.

The Commissioner General of Excise announced the decision under provisions of the Excise Ordinance Act, citing the company’s prolonged tax default.

In addition to halting the company’s liquor production, the department said that other licences issued to W.M. Mendis & Co. will not be renewed beyond 31 December unless the tax arrears are cleared. Currently, eight out of the 10 liquor manufacturing licences issued to the company have already been suspended. The issue came to light during proceedings at the Court of Appeal yesterday.

On the same day, the Court of Appeal also dismissed a petition filed by W.M. Mendis & Co. seeking to invalidate the Excise Department’s letter warning of the licence suspension if dues were not paid by 30 November. The bench, comprising Justices Sobhitha Rajakaruna and Mahen Gopallawa, ruled that the petition did not establish a prima facie case and refused to entertain it further.

Representing W.M. Mendis & Co., Navin Marapana, PC argued that the notice issued by the Excise Department was arbitrary, as the company held valid licences to operate until 31 December. He further claimed that the company could settle its tax debt if the Central Bank of Sri Lanka released over Rs. 12 billion in frozen assets belonging to its sister company, Perpetual Treasuries.

Marapana requested an interim injunction to release these funds, asserting that the Excise Department’s actions were prejudicial to his client.

Opposing the plea, Deputy Solicitor General Dr. Avanthi Perera, representing the Attorney General, defended the Government’s policy to suspend licences of all liquor manufacturers failing to meet tax obligations. She emphasised that this policy applied universally and was not targeted solely at W.M. Mendis & Co.

After reviewing arguments from both sides, the Court of Appeal upheld the Excise Department’s actions and dismissed the petition without a hearing.