The House of Fashion customs case involves alleged under-invoicing, tax evasion and counterfeit goods claims against owner Priyantha Jayawardena.
The House of Fashion customs case has pushed one of Sri Lanka’s best-known retail apparel businesses into the most serious legal crisis in its history.
Sri Lanka Customs arrested the company’s owner and Managing Director, Priyantha Jayawardena, over allegations involving false invoices, reduced customs valuations and unpaid taxes.
The action has also raised questions about the future and corporate governance of the large fashion retail network. House of Fashion has remained highly popular among Sri Lankan consumers for many years.
House of Fashion Customs Case Leads to Remand
Sri Lanka Customs arrested Jayawardena at his residence during a special investigation into imported garments.
Authorities accuse him of preparing false invoices through under-invoicing. Investigators allege that the process reduced the declared customs value of imported clothing and helped avoid tax payments owed to the Government.
However, Jayawardena developed a heart condition after his arrest. Authorities then admitted him to the Colombo National Hospital for treatment.
The Colombo Chief Magistrate later visited the hospital and examined his medical reports and health condition. After that assessment, the Magistrate ordered that Jayawardena remain in remand custody while receiving hospital treatment.
Prison officials must maintain strict supervision throughout his hospitalisation.
No formal bail application has yet been filed on Jayawardena’s behalf. Authorities have also not announced the date of the next court hearing.
The investigation therefore remains active, while the allegations have not yet reached a final judicial determination.
Counterfeit Goods and Trademark Allegations
The legal pressure facing House of Fashion extends beyond the current Customs investigation.
During the past several years, the retail network has faced serious allegations involving intellectual property rights and trademark violations.
According to a complaint filed by internationally recognised sportswear manufacturer Under Armour, House of Fashion outlets allegedly sold counterfeit products carrying the company’s official trademarks.
The Commercial High Court subsequently issued an injunction relating to those activities.
The Criminal Investigation Department had also previously conducted special raids connected to allegations involving counterfeit merchandise.
Those investigations sought to determine whether House of Fashion stores were selling imitation products linked to international luxury brands.
The claims have added another layer of scrutiny to the House of Fashion customs case and the company’s wider business practices.
However, the allegations and legal proceedings remain subject to the findings of the relevant courts and investigating authorities.
Stores Continue Operating Despite Investigations
Despite the legal action against its management, reports indicate that House of Fashion continues its daily retail operations as usual.
Authorities have not ordered the company to close. The present legal measures focus specifically on the alleged personal conduct and operational practices of its leadership.
However, the outcome of the Customs investigation could affect more than one retail chain.
Economic and trade analysts believe the case may have significant consequences for Sri Lanka’s wider apparel import sector.
Authorities may now apply closer scrutiny to textile and garment import declarations. Importers could also face tighter checks on declared values, invoices and customs documentation.
The Government may strengthen procedures used to monitor tax compliance, financial transparency and the accuracy of import records.
Such measures could increase operating costs and compliance requirements across the sector. However, they could also reduce tax leakage and discourage under-invoicing.
The House of Fashion customs case has therefore become a wider test of Sri Lanka’s ability to enforce Customs law, protect intellectual property and maintain confidence in a major consumer industry.
Its final impact will depend on the evidence presented in court, the outcome of the investigation and whether regulators introduce stricter oversight across the retail apparel trade.
