Supreme Court Receives Writ Against Budget Provisions

Kathmandu. A writ petition has been filed in the Supreme Court alleging that various provisions brought through the budget and economic act for the fiscal year 2083/84 have violated the constitution and caused billions in damage to the state.

The writ, filed by chartered accountant and legal researcher Bheshraj Luintel, has made the Office of the Prime Minister and Council of Ministers, the Ministry of Finance, and the Federal Parliament Secretariat among others as respondents. The writ petition has been scheduled for hearing in the constitutional bench on Shrawan 27.

The writ has requested an interim order to prevent the implementation of the disputed provisions and to maintain the structure and authority of the Revenue Investigation Department as it is. Petitioner Luintel has stated that these government actions challenge the constitutional obligations related to the rule of law, the right to equality, and the protection of public property.

The writ petition claims that the government's plan to abolish or merge the Revenue Investigation Department with other bodies through the budget statement is incorrect. It is claimed that abolishing this department, which has been successfully working on cases of billions in revenue leakage, hawala, and foreign exchange irregularities, is contrary to 'good governance and financial discipline'. The petition argues that the abolition of the Revenue Investigation Department will increase the risk of Nepal being placed on the 'Financial Action Task Force's' grey-list.

The writ has termed the provisions in the Economic Act, 2083, which provide tax exemptions, interest, and penalty waivers to benefit a limited number of business houses and individuals, as 'unconstitutional'. Specifically, the writ mentions that revenue waiver plans have been introduced to influence cases currently under judicial review. The writ petition also mentions that the valuation of customs for electric vehicles has been changed without a scientific basis, and special tax exemptions have been provided for insurance agents, the dairy industry, and bank interest.

The petitioner has accused the government of interfering with the 'budgetary sovereignty' that falls within the purview of the parliament. It is claimed that granting the executive unlimited powers for fund reallocation and budget revision through the Appropriation Act is contrary to democratic principles. Similarly, the writ states that arranging to raise a large amount of public debt without a realistic revenue base will burden future generations with debt and violate the principle of 'inter-generational justice'.

Why did the issue reach the Constitutional Bench?

The writ has raised questions about the parliament's law-making authority, the limits of the executive, and the process of issuing economic laws. This is why the case will be heard in the Supreme Court's constitutional bench.

According to Nepal's constitutional system, matters related to imposing, removing, or granting exemptions on taxes, revenue mobilization, and government funds must be operated only according to the law. The parliament plays a significant role in arrangements that create financial obligations or affect state revenue.

In the preliminary hearing, the court can issue a show-cause order as per the writ petitioner's request, seek a written response from the government, decide on an interim order, or issue other orders regarding the writ's validity.