High Court upholds MIRA order for Tamaks to pay MVR 25 million GST over Tree Top Hospital

The High Court has upheld a decision by MIRA requiring Turkish company Tamaks to pay MVR 25 million in GST on goods imported for the construction of Tree Top Hospital in Hulhumale. The ruling, delivered by a three-judge bench, also upheld the earlier decision of the Tax Appeal Tribunal. Tamaks had appealed against the tribunal's decision, which had supported MIRA's assessment. The dispute arose from an agreement between TreeTop Health and Tamaks to build Tree Top Hospital in Hulhumale, a project valued at US$110 million. Following an audit of GST returns filed by Tamaks for the project, MIRA concluded that an additional MVR 25 million in GST was payable on the main goods imported for the hospital's construction. Tamaks argued that the goods were imported by Tree Top, and that although the original contract stated the company would import them, the arrangement was later changed orally. The company also alleged that the audit process was unfair, that MIRA had failed to seek documents from Tree Top, and that the tribunal had wrongly refused to consider new evidence. In its judgment, the High Court found that MIRA had given Tamaks adequate time and opportunity to respond during the audit. It said MIRA was not obliged to obtain documents from third parties, and that the burden of proving any reduction in tax lies with the taxpayer. The court also noted that the original agreement between TreeTop Health and Tamaks had not been amended in writing, and that Tamaks could not avoid tax liability based on its own understanding. The tribunal's failure to consider evidence not presented during the audit stage was not an error, the court ruled. The High Court concluded that there was no legal basis to overturn the tribunal's decision and upheld it unanimously.