Malwatte Valley Plantations PLC vs. Commissioner General of Inland Revenue – sllr 2021 volume 2 page 045

In the case between Malwatte Valley Plantations PLC and the Commissioner General of Inland Revenue, the court addressed the issue of the validity of additional VAT assessments arising from the sale of rubber trees, the interpretation of assessment procedures under the VAT Act, and the classification of such supply under the statutory regime. It was held that although the audit and assessment process was carried out within statutory time limits and in accordance with procedural requirements, the imposition of an arbitrary 40% increase in the open market value was not justified. The principle was reaffirmed that substantive compliance with statutory procedure is essential, and that assessments must be anchored to actual rather than speculative values. Reliance was placed on the relevant prov