Ncell had filed a writ petition in the Supreme Court against the decision of the Large Taxpayer Office to determine about Rs 58 billion tax on itself, which is scheduled for hearing on Tuesday. Ncell had requested to stop the tax determination process itself at that time. The Writ petition, which was registered about three years ago, was postponed by the request of the Attorney General’s Office.
Ncell had claimed that the case filed by it was under consideration by the international arbitrator and the Attorney General’s Office had requested to postpone the hearing on the writ petition. Ncell had filed a case in the International Center for the Settlement of Investment Disputes (ICSID) to resolve the tax dispute. The tax dispute arose during the sale and purchase of the company holding 80 percent of Ncell’s shares. TeliaSonera, which holds 100 percent of Reynolds Holding’s shares, had sold the Malaysian company Axiata.
As 80 percent of Ncell’s shares were held by Reynolds Holding and only Reynolds’ shares were bought and sold, Ncell claimed that there was no change of ownership. The Large Taxpayer Office had sent a letter to Ncell in December 2077 not to buy the ‘revised tax determination’ based on change of ownership. Ncell had gone to the Supreme Court challenging that letter.
The Large Taxpayer Office had started the tax determination process based on a change of ownership as per Section 57 of the Income Tax Act. The government had already collected capital gains tax from it. The tax determination process based on a change of ownership was started in December 2077. TeliaSonera had sold Reynolds Holding, which holds 80 percent of Ncell’s shares, to Axiata in 2072. Based on that, the tax was determined based on a capital gain of Rs 143 billion 65 crore 37 lakh at the exchange rate at that time.
Ncell had claimed in the writ petition that it could not be taxed again as it had paid the tax and obtained the certificate of tax clearance as per the Income Tax Act. It had demanded that the decision of the Large Taxpayer Office be quashed, saying that the deadline for tax determination had expired and that Ncell could not be taxed without profit.
After the tax determination process progressed, Ncell filed another case in February 2077. At that time, when Cholendra Shumsher Jabra was the Chief Justice, an interim order was also issued from the bench of Justice Prakash Kumar Dhungana in both the writ petitions. The Supreme Court had ordered to hear both the cases together. As the date of hearing of the writ petition filed in the Supreme Court approached, Axiata had made public the information of selling the shares.
