KATHMANDU: In a definitive ruling on the tax evasion case involving Bhatbhateni Super Market and Departmental Store Pvt. Ltd., the Supreme Court of Nepal has made public the entire text of its ruling.
The court confirmed that Bhatbhateni used false invoices for commodities bought between August 2007 and February 2011 in order to avoid paying taxes, upholding the conclusions of the Inland Revenue Department.
Initially, the Inland Revenue Department assessed Bhatbhateni's tax liability, including fees, to be Rs 226.744 million. This was based on invoices for goods worth over Rs 710 million, sourced from 152 different companies, which were later found to be fake.
The fraudulent invoices led to significant tax evasion, with the company failing to fulfill its tax obligations. The Supreme Court’s full bench affirmed the assessment and fines imposed by the department and the decisions of the Revenue Tribunal in Kathmandu.
The court stated that the evidence clearly indicated Bhatbhateni’s intentional efforts to evade taxes. It rejected the company’s claim that it had been denied the opportunity to defend itself before the penalties were imposed.
In its ruling, the court highlighted that Bhatbhateni had been given sufficient opportunities to present its case and found the company’s arguments about discrimination in the fines imposed to be baseless.
The court’s judgment, originally issued on January 13, 2020, supported the Inland Revenue Department’s tax assessment and fines as lawful and justified. This verdict reaffirmed the accountability measures taken against tax evasion.
While most justices agreed with the decision, Justice Kumar Chundal offered a dissenting opinion. He stated that he did not find further action necessary in the case, though his view was a minority opinion on the bench.
The court’s overall judgment underscores the seriousness of tax evasion and the importance of adhering to Nepal’s tax laws while also allowing room for minority opinions within its judicial process.
