KATHMANDU, July 9: The Supreme Court (SC) has annulled the verdict of the Special Court in the case involving Rs 6.16 billion related to the Tax Settlement Commission (TSC), which had earlier been declared as corruption. A division bench of Justices Sharanga Subedi and Tek Prasad Dhungana on Tuesday ordered a retrial, overturning the previous decision of the Special Court.
With the SC’s decision, the corruption case against former Director General of the Inland Revenue Department (IRD) Chudamani Sharma and others will now be reheard by the Special Court. The 2014 TSC’s office-bearers—then Chairperson Lumbadhoj Mahat and members Umesh Prasad Dhakal and Chudamani Sharma—had been convicted of causing a loss of Rs 6.16 billion through corruption.
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The Special Court had sentenced each of them to nine years in prison and imposed a fine equivalent to the embezzled amount. However, citing procedural errors during the earlier trial, the Supreme Court has ordered the case to be sent back to the Special Court for retrial.
The Commission for the Investigation of Abuse of Authority (CIAA) had filed the corruption case at the Special Court on June 23, 2021, seeking Rs 133.2 million in restitution. Following the Special Court's verdict two years ago, Sharma and others have been serving their sentences at Dillibazar Prison. Although the Supreme Court delivered its decision on Tuesday, the written verdict has yet to be issued. The court has stated that it remains undecided whether the defendants will be released or remain in custody until the written ruling is available.
As per the Special Court’s verdict, each defendant was liable to pay Rs 6.16 billion in total—including the embezzled amount and fines. Unable to pay the determined amount, they were sent to prison and later filed an appeal at the SC. The appeal was registered a year ago. The case, which had repeatedly been deferred, was finally scheduled for decision about a month and a half ago, with the verdict delivered on Tuesday.
The CIAA had claimed that the accused committed corruption by deliberately misusing authority beyond the jurisdiction granted by the Tax Settlement Commission Act 1976 and the notified order published in the Nepal Gazette on February 5, 2015. It stated that the then office-bearers of the Commission embezzled Rs 133.2 million by arbitrarily granting tax exemptions based solely on internal discussions, without following due legal procedures. Based on this, the Special Court had convicted them of corruption. The former commission officials—Mahat, Dhakal, and Sharma—had also filed a writ petition at the SC claiming that they were being unlawfully detained. However, on Tuesday, the SC dismissed their habeas corpus petition.
According to legal provisions, an appeal to a higher court can only be registered after paying the amount determined by the court as embezzled funds and fines. If the amount is not paid, the convicted individuals must remain in custody. As the determined amount was substantial, all three accused were sent to Dillibazar Prison. They chose to remain in custody to be eligible to file an appeal. However, the same individuals later filed a habeas corpus petition at the SC, claiming that their detention was unlawful. The SC delivered a joint verdict on both the appeal and the habeas corpus petition.
