Bangladeshi High Court withdraws a Tk 666 crore tax on Yunus

A High Court (HC) bench has withdrawn its previous verdict and order regarding a tax claim of Tk 6.66 billion from Prof Dr. Muhammad Yunus, chief adviser of the interim government, and his organization, Grameen Kalyan, after a change in the regime. The judgment was withdrawn because one of the judges on the bench had previously been involved in writ cases related to the tax amount. It is common practice that if a lawyer once participated in a case as a party, they would feel uncomfortable hearing the case after becoming a judge. However, the judge only realized that he had served as a state lawyer in Dr. Yunus’ cases after the verdict was delivered and after the regime change.

Barrister Abdullah Al Mamun, who represented Prof. Yunus in the cases, confirmed the latest court order. Supreme Court sources said the cases were sent to the Chief Justice to assign a new bench to handle the cases.

On August 04, the HC rejected two writ petitions filed by Grameen Kalyan, challenging the legality of the imposition of income tax worth Tk 6.66 billion on the organization for five assessment years from 2012-2013 to 2016-2017. The HC bench of Justice Muhammad Khurshid Alam Sarkar and Justice SM Maniruzzaman delivered the verdict after hearing the petitions. However, the HC bench withdrew the verdict because the second judge had served as a state lawyer in the cases.

Lawyer Tahmina Polly, who was then an assistant attorney general and represented the National Board of Revenue (NBR) in the cases, stated that the court withdrew the verdict after she resigned from the post on August 08.

Taxes Zone-14 in Dhaka claimed Tk 6.66 billion as income tax from Grameen Kalyan for the assessment years in question and granted Grameen Kalyan two weeks, fixing 21 September 2017 for a hearing. Grameen Kalyan sought one month from the tax office to collect the necessary documents, but their request was rejected, and an order was passed on September 26. The entity filed a review plea, which was rejected on 14 November 2017. Then it moved to the HC and filed two separate writs on different grounds.

On 26 November 2017, a High Court bench issued a rule asking the government to explain why the tax office’s orders passed on 14 November and 26 September 2017 should not be declared illegal. Pending the rule’s disposal, the operation of the demand notices for income tax was stayed for six months, and the stay was extended several times.

On 17 October 2023, Justice Khurshid-Rashed bench delivered a verdict based on the rule, setting aside the order passed on 11 November 2017 and disposing of the rule with some observations. However, following a leave-to-appeal petition, the apex court on March 11 this year asked the HC bench, headed by Justice Khurshid, to hear and dispose of the rule afresh on merit. Complying with the apex court order, the HC bench started fresh hearings on the petitions in May and delivered the verdict on August 04.