John Keells Holdings (JKH) has expressed the view that tax assessments issued in respect of Lanka Marine Services (LMS) relating to the years of assessment 2002/03, 2003/04 and 2004/05 received last month are statutorily time barred under Section 134(5)(A) of the Inland Revenue Act.

JKH has told shareholders through an interim report covering the nine months ended December 31, 2008 that this view is based on expert legal and tax advice.

The assessments made totaled to Rs.533 million with penalties of Rs.250 million added on.

"It is LMS’ view, based on expert advice that in any event, the liability will not exceed Rs.150 million. It is also opined that penalties will not apply," the company said in its interim report.

Appeals have been lodged against the assessments in terms of the Inland Revenue Act, the company said.

"Once clarity is achieved, we will quantify the amounts immediately chargeable and the amounts that need to be added to contingent liabilities," JKH said.