High Court calls Grameen Kalyan’s conduct a ‘Classic Example’ of tax evasion

Grameen Kalyan, an organization owned by Dr. Muhammad Yunus, “left no stone unturned” in its efforts to deprive the National Board of Revenue (NBR) of its rightful tax revenue, the High Court has observed, describing the organization’s conduct as “a classic example of tax evasion.”
The observations were made in the full text of a judgment disposing of two writ petitions challenging a Tk 6.66 billion income tax demand raised by the NBR against Grameen Kalyan.
In its judgment, the court said, “This is a classic example of tax evasion by the petitioner. The petitioner is attempting to evade taxes by prolonging a matter that has already been settled. The issue could have been viewed differently only after an order was issued in Income Tax Reference (ITR) No. 363 of 2019. However, by keeping the matter pending for a prolonged period, the petitioner left no stone unturned in depriving the respondents of their rightful tax revenue.”
The court pointed out that although Grameen Kalyan challenged the legality of the Tk 6.66 billion income tax imposed for the five tax years from 2012-13 through 2016-17 in two separate writ petitions, the same organization had paid income tax of the same nature for the 2017-18 and 2018-19 tax years. It subsequently challenged the legality of that tax through Income Tax Reference No. 363 of 2019 but later withdrew the case.
On this point, the court observed, “The petitioner has continued to argue the same issue despite taking a position contrary to its own, and has shown an extreme disregard for this court’s orders—effectively giving the court’s orders the finger.”
A High Court bench led by Justice Md. Mojibur Rahman Miah dismissed the rules issued in response to the two writ petitions challenging the legality of the tax demand on September 10. The full text of the judgment was published on the Supreme Court’s website on Monday.
The court directed the NBR and the other respondents to take the necessary steps to recover the outstanding taxes from the petitioner in accordance with the law and as expeditiously as possible.
After the judgment was published, Dr. Yunus’s lawyer, Barrister Abdullah Al Mamun, said they would appeal after obtaining the detailed judgment.
According to court records, Dhaka Taxes Zone-14 issued two separate notices on September 7 and 11, 2017, demanding Tk 6.66 billion in income tax from Grameen Kalyan for the 2012-13 through 2016-17 tax years. The organization was given two weeks to respond to the notices.
The case records show that Grameen Kalyan had an agreement with Grameen Telecom under which Grameen Telecom paid 42.50% of the dividends earned from one of its businesses to Grameen Kalyan.
The tax authorities later reassessed the file under Section 120 of the Income Tax Act and found that no tax had been deducted at source on the income Grameen Kalyan received from Grameen Telecom. The authorities subsequently raised a fresh income tax demand of Tk 6.66 billion.
Grameen Kalyan’s lawyer, Abdullah Al Mamun, said the organization had paid the tax at source. He said Grameen Kalyan had requested a month to collect the necessary documents, but 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 petitions challenged the legality of the Tk 6.66 billion income tax imposed for the five tax years from 2012-13 through 2016-17.
After hearing the petitions, the High Court issued rules on November 26, 2017, and stayed the operation of the tax demand notices for six months. The stay was extended several times.
On October 17, 2023, a High Court bench disposed of the rules by quashing the two notices issued by the tax authorities. However, after hearing a leave-to-appeal petition challenging that judgment, the Appellate Division on March 11, 2024, directed the High Court to rehear and dispose of the rules on their merits.
Following lengthy hearings, the High Court dismissed the rules arising from Grameen Kalyan’s two writ petitions on August 4, 2024, a day before the fall of Sheikh Hasina’s government during the July uprising. The judgment was later recalled, and the chief justice assigned the cases to a new bench for disposal.
A High Court bench comprising Justice Md. Mojibur Rahman Miah and Justice Rezaul Haque began rehearing the cases on July 14. On Thursday, the court dismissed the rules.