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Kumar v Commissioner of Inland Revenue [2007] FJCOR 1; CR Appeal 04.2004 (18 October 2007)

IN THE COURT OF REVIEW OF THE FIJI ISLANDS
AT SUVA

APPEAL NO. 4 OF 2004

IN THE MATTER of an appeal to the Court of Review
by Mahendra Kumar (f/n Bans Karan) of Suva

AND

IN THE MATTER of the Income Tax Act

BETWEEN:

MAHENDRA KUMAR (s/o Bans Karan)
APPELLANT

AND:

THE COMMISSIONER OF INLAND REVENUE
RESPONDENT

Mr. A. Bale for the appellant
Ms. S. Tagicaki for the respondent

Date of Hearing: 20 September 2007
Date of Ruling: 18 October 2007

RULING

The substantive appeal in these proceedings was set for hearing on 26^th June, 2007 by consent of both parties. By then written submissions had been filed by the parties. On 26^th June both counsels submitted that legal issues pertaining to the delegation of powers by the Commissioner and the admissibility of evidence by the respondent, under the Civil Evidence Act, 2002 needed to be resolved before the substantive issues could be dealt with. According to counsel for the appellant a bundle of documents was served on him on the 20^th June 2007. This bundle was essentially an affidavit by one Willie Kwong, the Principal Auditor for the respondent, enclosing documents that were to be relied upon by the respondent. This affidavit was subsequently filed into court on 10^th July, 2007.

Written submissions were ordered on the preliminary issues. These were filed by both parties. By consent the parties agreed to an oral hearing to respond to each others submissions and to clarify matters arising. At the hearing on 20^th September 2007 both counsels relied on their written submissions. The Court is grateful for these submissions and the oral arguments of counsel.

The Appellant's objections to the affidavit filed by Willie Kwong, and the annexures attached, may be summarized from his written submissions thus:

- "whether the person issuing a demand by the Commissioner of Inland Revenue had the power to do so and whether that power was properly delegated and/ or gazetted.

- whether the person disallowing the taxpayer's objection dated the 22^nd day of September 2004 had the power to do so or was properly delegated to him.

- whether the Civil Evidence Act 2002 allowed the Respondent to call as a witness auditors who had not carried out the audit against the taxpayer in the first place.

- whether the Respondents can bring in new documents which they have not been filed or called upon to rely on.

- whether the evidence as per the Respondent's affidavit in support that has been filed before this Court on the 10^th July 2007 complies with the requirements set out in Civil Evidence Act 2002."

The Court will firstly consider the issue of the delegation of powers by the Chief Executive of FIRCA.

Delegation of Powers

It is not very clear to this court what appellant counsel's specific contention is regarding the nexus he posits between the issue of "properly delegated" powers and the requirements to "gazette". In the beginning of his submissions learned counsel appears to contend that the requirement to gazette is a mandatory requirement. However, towards the conclusion of his submissions (at p.6) he accepts, as he puts it, "Nevertheless, if it has been delegated but never gazetted then the onus is on the FIRCA to produce it in court as was the case in Hira v Reginam [1967] 13 FLR 176". In my view this is the crux of the nexus between delegation and gazetting. In passing, I note that Hira's case is not relevant to the issues before this court. That case concerned a prosecution where the powers conferred by the then Income Tax Ordinance was to be exercised personally by the Commissioner or Deputy Commissioner. It was held in that case that there was no proof that the Commissioner had personally exercised the requisite powers since "the gazette in question had never been formally adduced in evidence but had merely been referred to after the close of the case of the prosecution" (PacLII, as attached to appellant's written submissions).

According to Section 63 of the Interpretation Act (Cap. 201), referred to by both counsels, the Gazette. "... shall be admitted in evidence in all courts and in all legal proceedings whatsoever without any proof being given ... and shall be taken and accepted as evidence of the written law, appointments, notices and other publications, therein printed and of the matters and things contained in such written law, appointments, notices and publications respectively". Gazetting any official appointments, notices and written law is but one means of taking judicial notice of matters contained in the gazette. In the alternative any party can prove its contention, if challenged, by the rules of evidence - oral or otherwise. However, to suggest that the publication of any delegation, revocation etc. in the gazette is mandatory is not borne out by the provisions of either the Interpretation Act or the FIRCA Act. In this regard it is pertinent to consider Sections 27(1) and (4) of the FIRCA Act which has been the basis of contention between the parties. Section 27(1) states: "The authority may, after consultation with the Minister, by notification in the gazette, appoint a Chief Executive Officer..." (emphasis added).

Section 27(4): "Notwithstanding anything in any other written law, the Chief Executive Officer may delegate to any other officer or employee of the authority any of his powers under this Act or under laws specified in the First Schedule except the power of delegation under this subsection". This provision is similar to the powers vested in the Commissioner of Inland Revenue under Section 3(3) of the Income Tax Act. Further, section 3(2) of the said Act provides that: "The person for the time being appointed as the Chief Executive Officer of the Fiji Islands Revenue and Customs Authority shall hold office as the Commissioner of Inland Revenue".

It is quite clear that Section 27(1) requires notification in the gazette; Section 27(4) does not. In the same token one can consider Section 1(2) which states: "This Act shall come into force on such date or dates as the Minister may, by notification in the gazette, appoint" (emphasis added). It is also pertinent to note that Section 26 of the Act on the appointment of "employees, agents or consultants as may be necessary or expedient for carrying out its functions and duties," does not require gazetting. It should be recognized that FIRCA is not a government department but a statutory body. As such it does not have to publish its appointments, acting appointments, promotions and other internal operations in the Gazette unless required by any relevant Act.

The court is not clear what counsel for the appellant is contending in linking Section 27(4) of the FIRCA Act to Section 30(6) of the Interpretation Act. As he states: "Therefore in order to ascertain what the FIRCA Act No. 9 of 1998 meant by the term "may delegate" one has to look at Section 30(6) of the Interpretation Act 1985 Cap. 7". This section states: "Notwithstanding the provisions of subsection(4) whereby or under any Act, any power is to signified by proclamation it may be delegated but upon delegation such signification (other than by the Governor General or by the Cabinet) shall be by notice in the gazette". It is not clear on what basis appellant counsel suggests that the powers granted to the FIRCA, under Section 27(1), or that of its Chief Executive, under Section 27(4) can be classed as proclamations. Proclamations, according to my understanding, are made by the Queen, Governor-General or in our case the President. In our Constitution, for example, only Chapter 14, uses the term in relation to the President's power to proclaim a state of emergency (See also Chapter 16, Section 193(3).

I also cannot understand the basis of appellant counsel's reference to Section 50 of the Income Tax Act, specifically his reference to Director General Inland Revenue Service. Section 50, titled Demand for additional information, gives the Commissioner wide powers to demand information "...to make an assessment or for any other purpose". As with the other powers of the Commissioner this may be validly delegated. More importantly Section 50 also states: "For the purpose of any proceedings taken under this Act, the facts necessary to establish compliance on the part of the Commissioner with the provisions of this section as well as default hereunder shall be sufficiently proved in any court of law by the affidavit of the Commissioner or any other responsible officer of the Fiji Islands Revenue and Customs Authority - such affidavit shall have attached thereto as an exhibit a copy or duplicate of the said letter or notice". It is quite clear that the affidavit of Willie Kwong and the attached exhibits comply with this provision.

The Civil Evidence Act 2002

Learned counsel for the appellant has taken no objections to the application of the Civil Evidence Act to proceedings in this court. Learned counsel for the Commissioner has succinctly summarized why the Civil Evidence Act applies to these proceedings. I do not need to dwell on this issue since it is quite clear that proceedings before this court are civil proceedings, as defined in Section 2 of the said Act. The proceedings in this court also conform to the definition of "judicial proceedings" in the Interpretation Act. [See Section 2(1)].

In my view counsel for the appellant has adequately summarized the provisions of the Civil Evidence Act and what is required for evidence to be admitted. Learned counsel's submission is essentially a repeat of Justice Winter's comprehensive analysis of the Act in the case of Vidya Wati (f/n Chabi Nath Singh) v Rasik Kumar (f/n Ram Sukh) & Island Buses Ltd [High Court Civil Action No. HBC0214 OF 2003(S)]. While learned counsel has adequately stated the law he has not stated why the affidavit of Willie Kwong should not be admitted. He has not pleaded nor argued in submissions any prejudice to his client. In any case if there is any prejudice the Civil Evidence Act balances this out by the provisions of Sections 5, 6 and 7. I need not state these here since the Vidya Wati case provides a succinct analysis. Unlike the Vidya Wati case, which involved a medical report only, most of the documents being submitted with the affidavit of Willie Kwong are letters and documents generated in the process of assessment and re-assessment of the appellant's income. We are not dealing with any expert evidence as such but documents generated by responsible officials in the normal cause of FIRCA's statutory duties. It is apparent that much of the dispute may concern the interpretation of figures, the credibility of which would be tested during trial.

It is, perhaps, pertinent to conclude the consideration of the Civil Evidence Act by the following statement of Justice Singh in Angenette Melania, Hefferman v Commodore Josaia Voreqe Bainimarama & Others (Civil Action No. HBC0037 of 2007 at Suva):

"The Civil Evidence Act 2002 is an enabling or a facilitating legislation. It enables evidence, which would otherwise be inadmissible under common law, especially under the hearsay rule, to be now admitted as evidence. The court however can attach what weight it considers necessary having regard to factors outlined in Section 6 of the Act. The common law requires evidence must be relevant to be admissible. If it is not relevant, it is inadmissible. The Civil Evidence Act is silent about this common law rule and therefore this common law rule is deemed to apply. Requirement of relevance is the paramount consideration. The fundamental objective behind the Act is that a party should be able to present the best evidence available to it. This would assist the fact finding exercise. It is upon the fact finding that the credibility of a process of litigation rests. It further enhances fairness in such process. However the quality of hearsay and with it the probative value may vary enormously so the court has been given discretion as to the weight it attaches to such evidence". (pp. 2 - 3)

Conclusion

In view of the above the court rules as follows:

(a) there is no requirement to gazette the delegation of powers by the Chief Executive of the Fiji Island Revenue and Customs Authority. The delegations are valid as long as they comply with the provisions of the Fiji Islands Revenue and Customs Authority Act.

(b) The Civil Evidence Act, 2002 is applicable to proceedings before the Court of Review. As such the affidavit of Willie Kwong is admitted in evidence under the provisions of the Act.

(c) The parties should expeditiously prepare to proceed to trial.

Jayant Prakash
Court of Review

At Suva
18 October 2007