By: Isuru Parakrama

November 14, Colombo (LNW): The Supreme Court was notified yesterday (13) that five of Sri Lanka’s largest liquor manufacturers, including W.M. Mendis & Company, collectively owe billions of rupees in unpaid excise taxes.

During a hearing on the matter, representatives from the Excise Department and the Attorney General’s office asserted that operating licences for these companies would be revoked if the dues were not settled by 30 November.

Additional Solicitor General Nerin Pulle, speaking on behalf of the Commissioner General of Excise and the Attorney General, issued this warning while defending against a fundamental rights petition.

This petition, submitted by a group of 17 concerned citizens, sought the immediate suspension of the licences of several liquor producers who are allegedly defaulting on excise tax obligations.

Justices Preethi Padman Surasena, Yasantha Kodagoda, and Priyantha Fernando presided over the case and set a date for further review on 22 January 2025.

The petitioners, represented by Attorney Manjula Balasuriya, include Sanjaya Mahawatte and Susantha Ranjith Liyanarachchi, amongst others, who emphasised the heavy reliance of government finances on tax revenues, particularly from high-revenue industries such as liquor.

According to the petitioners, these five companies have accrued an unpaid tax debt of approximately Rs. 6 billion over several years. The excise tax, required for annual licence renewal, has reportedly gone unpaid despite regular licence renewals.

The petitioners also allege a pattern of negligence within the Excise Department, arguing that officials were aware of these outstanding dues yet continued to grant and renew licences for the involved companies.

In light of this, the petition requests the Court to instruct the Excise Department to take immediate action to collect the unpaid taxes and to ensure a report is submitted to detail the total excise dues.

Defending the companies, President’s Counsel Razik Zarook appeared in court alongside Additional Solicitor General Pulle, who represented the Attorney General’s office.

The hearing highlighted both legal and regulatory gaps within the excise licensing system, prompting further discussion on measures to close these gaps.