A group of vehicle importers has raised objections to a Treasury proposal seeking to impose a 35% surcharge for the release of vehicles currently detained by Sri Lanka Customs.
At a hearing before the Court of Appeal today, multiple President’s Counsels, including Faiszer Musthapha, Ikram Mohamed, and Sanjeeva Jayawardena, appeared on behalf of the affected importers, arguing that the Treasury’s proposal was both unlawful and disproportionate.
The vehicles in question were imported under letters of credit (LCs) opened at foreign banks, a practice that Customs claims violated import regulations, prompting the seizure.
President’s Counsel Musthapha told the court that enforcing a surcharge of this magnitude would, in many cases, result in the cost of the vehicle exceeding its market value, rendering the importers’ businesses unsustainable.
He also rejected the idea of releasing the vehicles on bond, proposing instead that they be released on the basis of an undertaking provided to court by the petitioners.
The legal team collectively maintained that Customs’ decision to detain the vehicles lacked legal basis, calling for a fair and practical resolution.
In response, the Court of Appeal bench directed Additional Solicitor General Sumathi Dharmawardena, who represented Sri Lanka Customs, to explore alternative mechanisms for release — including corporate or personal bonds, or court-backed undertakings.
The court instructed the Additional Solicitor General to report back by 10 October on whether such alternatives could be accepted in lieu of the proposed surcharge.
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