Senvec Lanka (Pvt) Ltd vs Commissioner General of Inland Revenue – CA CASE NO. TAX 05/2010-2010

In the case between Senvec Lanka (Pvt) Limited and Commissioner General of Inland Revenue, the issue concerned whether Senvec Lanka (Pvt) Limited was liable for Economic Service Charge (ESC) under the Finance Act No. 11 of 2004, based on alleged importation and sale of Colour Sorting Machines, and the proper method for assessing turnover for ESC purposes. The central determination established that ESC liability depends strictly on the turnover reflected in audited accounts accepted for income tax purposes, not on values reported in VAT returns that included erroneous figures. The evidence demonstrated that the appellant acted solely as an agent and not as an importer or seller, negating ESC liability. The appeal was allowed, reinforcing the principle that tax statutes must be applied stric