Grameen Kalyan appeals to overturn high court verdict on tax demand
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Grameen Kalyan has appealed to overturn a High Court verdict concerning an income tax demand of Tk 6.66 billion by the National Board of Revenue (NBR) against the organization founded by Professor Dr. Muhammad Yunus, former chief adviser to the interim government.
Barrister Abdullah Al Mamun, lawyer for Grameen Kalyan, told Agamir Somoy about the development. He said the appeal was filed last week. Two appeals related to the matter are scheduled for hearing on Sunday’s cause list of the Appellate Division.
Earlier, on September 10, a High Court bench led by Justice Md. Mojibur Rahman Mia delivered a verdict dismissing the rules issued in response to two writ petitions filed by Grameen Kalyan challenging the validity of the income tax demand. The full text of the verdict was published on the Supreme Court website on October 12.
In the full verdict, the court observed that the organization owned by Dr. Muhammad Yunus had “left no stone unturned to deprive” the National Board of Revenue of its “legitimate revenue.” The court also described the organization’s activities as “a classic example of tax evasion.”
The court said, “This is a classic example of tax evasion by the petitioner. The petitioner is trying to evade taxes by prolonging a matter that has already been settled. The matter could have been viewed differently only after the order was passed in Income Tax Reference (ITR) Petition No. 363 of 2019. However, the petitioner has left no stone unturned over a long period to deprive the respondent of its legitimate revenue by keeping the matter pending.”
The court’s verdict showed that although the two writ petitions challenged the legality of Tk 6.66 billion in income tax imposed for five tax years from 2012 to 2013 through 2016 to 2017, the same organization, Grameen Kalyan, had paid similar income tax for the 2017 to 2019 tax years.
Later, the organization challenged the validity of that income tax in court through Income Tax Reference No. 363 of 2019 but subsequently withdrew the challenge.
On this issue, the court said, “The petitioner has continuously argued about the same matter while contradicting its own position and has become determined to show extreme defiance toward the orders of this court, which effectively amounts to giving the court’s orders the middle finger.”
In its verdict, the court directed the NBR and the other respondents to take the necessary steps to collect the outstanding tax from the petitioner in accordance with the law and as quickly as possible.
According to the case records, Tax Zone 14 in Dhaka issued two separate notices on September 7 and 11, 2017, demanding Tk 6.66 billion in income tax from Grameen Kalyan for the 2012 to 2013 through 2016 to 2017 tax years. The organization was given two weeks to attend a hearing.
The case details show that Grameen Kalyan had an agreement with Grameen Telecom under which Grameen Telecom paid Grameen Kalyan 42.50 percent of the dividends earned from one of its businesses. Later, the income tax authorities reassessed the file under Section 120 of the Income Tax Act and found that no tax at source had been deducted from the income received from Grameen Telecom. As a result, a fresh income tax demand of Tk 6.66 billion was issued.
However, Grameen Kalyan’s lawyer, Abdullah Al Mamun, said the organization had paid tax at source. Although Grameen Kalyan requested one month to collect the necessary documents, the tax authorities rejected the request. After its subsequent application for reconsideration was also rejected, the organization filed two writ petitions with the High Court.
The two petitions challenged the validity of the Tk 6.66 billion income tax imposed for the five tax years from 2012 to 2013 through 2016 to 2017.
After hearing the writ petitions, the High Court issued rules on November 26, 2017, and stayed the operation of the notices demanding income tax for six months. The stay was extended several times afterward.
On October 17, 2023, a High Court bench disposed of the rules by quashing the two notices issued by the tax authorities. At the time, the Awami League was in power. After forming the government in 2009, the party had removed Dr. Yunus from his position as managing director of Grameen Bank.
However, after hearing a leave to appeal against that verdict, the Appellate Division on March 11, 2024, directed that the rules be reheard and disposed of on merit.
Following lengthy hearings, the High Court delivered a verdict on August 4, 2024, dismissing the rules issued in response to the two writ petitions filed by Grameen Kalyan.
After the fall of Sheikh Hasina’s government in the July mass uprising, the High Court withdrew that verdict. At the time, Dr. Yunus was serving as chief adviser to the interim government. The chief justice subsequently assigned the case to a new bench for disposal. By then, the interim government led by Dr. Yunus had left office after the BNP formed a government following an election.
A High Court bench comprising Justice Md. Mojibur Rahman Mia and Justice Rezaul Haque resumed hearings in the case on July 14. On September 10, the court delivered its verdict dismissing the rules.
