High Court Judges, District Judges and Magistrates are liable for income tax and APIT can lawfully be deducted from their remuneration, the Supreme Court has ruled. But the judgment also contains an important message for the State: taxing judges is lawful paying them adequately matters too.
Judges must pay income tax.
After more than three years of litigation over whether Sri Lanka’s judicial officers could lawfully be subjected to Advance Personal Income Tax, the Supreme Court has given what is now the definitive answer.
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In a judgment delivered on September 15, a five-member Supreme Court bench dismissed three appeals brought by associations representing judicial officers and upheld the application of the country’s income-tax regime to their remuneration.
The appeals arose from litigation brought by the High Court Judges’ Association, the Judicial Service Association and the association representing judicial officers of Labour Tribunals. They challenged a 2023 Court of Appeal decision which had rejected attempts to prevent APIT being deducted from judicial remuneration.
The five-member bench comprised Chief Justice P. Padman Surasena and Justices A. L. Shiran Gooneratne, Janak De Silva, Mahinda Samayawardhana and Arjuna Obeyesekere.
The dispute was never simply about whether judges disliked paying tax.
It raised a constitutional argument about what a judge actually is.
The judicial officers argued that they were not employees of the State, or of another person, in the conventional sense. The judiciary is a separate arm of government and judicial independence depends upon judges remaining constitutionally insulated from executive control. Treating them as ordinary employees for taxation purposes, they argued, sat uneasily with that independence.
There was another argument.
Judicial remuneration enjoys constitutional protection. The appellants contended that deducting APIT effectively reduced their remuneration and therefore engaged the constitutional safeguards intended to protect the judiciary from interference through its pay. They sought to stop future deductions and recover money already deducted.
The Supreme Court rejected those arguments.
Justice Janak De Silva held that the Inland Revenue Act does not establish an ordinary employer-and-employee relationship between judicial officers and those responsible for paying their remuneration. Rather, for the purposes of APIT, the legislation identifies the person or institution paying that remuneration so that somebody has responsibility for deducting the tax.
That distinction is important.
A mechanism requiring tax to be deducted from a judge’s remuneration does not transform the judge into an employee answerable to the executive. Nor, the Court concluded, does a generally applicable and non-discriminatory income tax become unconstitutional merely because it reaches the judiciary.
There is also history here.
This argument did not suddenly begin in 2026. When amendments to the Inland Revenue legislation were challenged in 2022, the Supreme Court had already considered claims that judges formed a distinct category and that subjecting them to taxation threatened judicial independence.
And when the dispute reached the Court of Appeal, that Court noted that judicial officers had previously contributed through PAYE and APIT. It observed that deduction of tax from judicial remuneration was not itself a new creation of the 2022 amendments; what had changed significantly were the applicable tax rates.
The latest Supreme Court judgment therefore settles the central practical questions.
High Court Judges, District Judges and Magistrates covered by the proceedings are liable to income tax on their remuneration. And the authorities responsible for paying them may deduct APIT from that remuneration.
But there is another side to this judgment which should not disappear beneath the obvious headline.
The Court acknowledged the financial difficulties experienced by judicial officers following the imposition of income tax.
Its answer was not a tax exemption.
It was adequate remuneration.
Justice De Silva’s judgment emphasised that judicial officers should be remunerated in a manner reflecting the responsibilities they carry, the independence expected of them and the unusually demanding standards of personal and professional conduct imposed by judicial office. Adequate remuneration, the Court observed, is connected to maintaining the independence, dignity and effectiveness of the judiciary.
That creates an important distinction.
Equality before a generally applicable tax law does not mean pretending that every public office carries identical responsibilities.
Judges exercise the judicial power of the People. Their independence from government is not a privilege bestowed upon individual judges; it is a constitutional protection ultimately intended for the citizen who appears before them.
That independence cannot mean immunity from an ordinary, non-discriminatory tax.
But neither should the application of tax become an excuse for allowing judicial remuneration to fall to a level inconsistent with the responsibilities and restrictions of judicial office.
Sri Lanka therefore emerges from this litigation with two propositions rather than one.
Judges must pay their taxes.
And the State must take seriously what it pays its judges.
The three appeals were dismissed without costs. Chief Justice Surasena and Justices Samayawardhana and Obeyesekere agreed with Justice De Silva’s judgment, while Justice Shiran Gooneratne agreed with the conclusions concerning liability for income tax and APIT but expressed a different view on aspects of the constitutional reasoning.
The broader principle is refreshingly uncomplicated.
Judicial independence protects judges from improper interference in performing their constitutional function.
It does not place them outside the country’s tax system.
Be that as it may.
