British American Tobacco Bangladesh (BATB) has won an appeal in the Supreme Court against a High Court order that had asked the world’s one of the largest tobacco companies to pay Tk 1,924 crore in VAT to the National Board of Revenue (NBR). With the apex court order delivered on July 25, the BATB need not pay the amount to NBR. A four-member bench of the Appellate Division, headed by Chief Justice Syed Mahmud Hossain, allowed the BATB appeal after concluding hearing from both sides.

However, the ground on which the appeal was allowed would only be known after the full text of the apex court order is released, lawyers said.

Additional attorney general Murad Reza and deputy attorney general Israt Jahan Santona appeared for the state while Barrister Rokanuddin Mahmud, Advocate Amin Uddin and Barrister Sheikh Fazle Noor Taposh represented the appellant.

Meanwhile, anti-tobacco campaigners have asked the government to file a review petition in the SC after getting the full copy of the verdict. Reacting to the SC order, ABM Zubair, executive director of PROGGA, a platform of anti-tobacco campaigners, said, “We can do nothing if the apex court has given a verdict. Everyone should abide by the SC order.”

“We apprehend that the tobacco companies would increase their business in the country if they were to get facilities from the government to do so. However, if the tobacco firms get facilities to enlarge their business, it would not be possible to achieve the government’s goal of freeing the nation from the menace of tobacco by 2040,” he added.

In 2015, the NBR and BATB were at loggerheads over the realisation of taxes worth Tk. 1,924 crore.

On March 22, 2015, the large taxpayers unit (LTU) of the NBR issued a demand notice to BATB claiming that the company had evaded taxes (VAT and supplementary duty) by selling medium-grade cigarettes while declaring them to be low-grade ones.

According to the LTU (VAT wing), BATB evaded paying taxes from August 19, 2009 to January 31, 2013 by selling its Pilot and Bristol brands of cigarettes at lower prices by declaring them to be lower-grade ones, even though these are of medium-grade.

BATB, however, questioned the notice’s legality and refused to pay the taxes. Later, it also filed two writ petitions in the HC against the NBR move to realise the unpaid taxes. However, BATB lost the legal battle after the HC asked it to cough up the money due to the NBR. Following this, the tobacco company filed the appeal in the SC.

The NBR versus BATB case came to the limelight in September 2017 when British newspaper  The  Guardian accused Alison Blake, the British high commissioner to Bangladesh, of lobbying on behalf of BATB after the company sought her help in the long-running battle with Bangladesh’s revenue authorities.

“The UK foreign office has encountered a major lobbying row after a senior diplomat was found lobbying in favour of British American Tobacco (BAT) to evade unpaid VAT in Bangladesh,” reported The Guardian.

In an unprecedented move, BATB had sought help from the British high commissioner through a letter, and the claim was recognised by the courts.

In the letter, the tobacco firm said the unpaid VAT claim was “baseless” and threatened to take the matter to an international court. It even boasted of its “proud history of more than 105 years of investment and revenue contribution in Bangladesh”, The Guardian reported.

Later, Blake wrote to the Bangladeshi government in support of BATB.

According to the British newspaper, the extraordinary intervention angered health organisations and transparency campaigners, both in the UK and Bangladesh, who said that it breached the World Health Organisation’s strict rules against lobbying.

IK