First Constitutional Case
Govt. found not to have complied with due legislative process
|Opposition MP Damcho Dorji: Not surprised|
First Constitutional Case 25 February, 2011 – The Supreme Court has upheld the verdict of the High Court on the first constitutional case.
The basis it stated was that the government had not complied with the legislative process, denying the opposition the right to vote, as provided under the Constitution on the issue of raising tax.
The verdict, which the four justices of the Supreme Court, including the chief justice handed down yesterday afternoon to a courtroom filled with representatives of the government, opposition and the local media said the issue raised by opposition does not relate to the authority of the government to impose tax but pertains to the non-compliance of procedure in raising and implementing the altered vehicle tax, the main subject of litigation.
As deemed by the High Court ruling, the government will have to refund all taxes collected after it revised sales and import duty on vehicles in July last year and became the basis for the first constitutional case.
However, the suspension of import of all light vehicles by the government while the Supreme Court judgment was still pending, which the opposition submitted as contempt of court and violation of the right to trade has been viewed, as an administrative action.
The verdict also states the Constitution does not differentiate between direct and indirect tax.
Tax is tax, therefore the argument that there exists a separate law related to direct and indirect tax is an assumption and not tenable, thus squashing one of the main arguments of the government.
Except for fees and levies imposed or altered by the budgetary bodies for services provided to the public all other fees can be imposed or altered only by parliament.
On the interpretation of relevant provisions of the Constitutions and other laws the Supreme Court ruled the rights, privileges and powers exercised before adoption of the Constitution cannot be perpetuated by a provision that is inconsistent with the provisions of the Constitution.
Therefore, sections of the Public Finance Act 2007 overrules inconsistent sections in the Sales Customs and Excise Act of 2000, which has been the basis of government to revise taxes.
The verdict clarifies that the ruling of the High Court will not require the government to seek parliamentary approval for raising loans and aid mobilisation.
The government may raise loans, make grants or guarantee loans in accordance with the Public Finance Act and the Constitution, which must be reported to Parliament when the budget is submitted. On bills relating to spending or taxation that form part of Money Bills the verdict states the rule requires presenting the bill to the National Council in compliance with the bill passing process.
But comments and proposals made by the National Council is not binding on the National Assembly. Therefore, it is the duty of the National Assembly to submit the budget bill for royal assent without incorporating changes suggested by the National Council if deemed irrelevant.
This is because the National Assembly has supremacy over Money Bills. The apprehensions raised that the budget will not be passed or tax proposals will be blocked by the National Council is unfounded as the passing of bills in each house requires only a simple majority according to the Constitution and the ruling government has a majority.
The opposition party’s representative who was present while the Supreme Court passed the verdict, Damchoe Dorji, said the verdict should not be considered their victory.
“I was confident and didn’t expect two separate interpretation between the two courts,” he said. “I being a retired drangpon understand that.”
He said taking the matter with the court was the last thing on their mind.
“But we just couldn’t convince the government,” he said.