The Commissioner of Inland Revenue
ex-parte
Dilmun Navigation Co. Ltd.
p class=MsoNormal stal style="text-align: justify; margin-top: 1; margin-bottom: 1"> Mr. J. Apted & Ms. A. Vaubula for the Applicantp class=MsoNormal style="text-align: justify; margin-top: 1op: 1; margin-bottom: 1"> Mr. A. Bale for the Respondent
REASONS FOR DECISIpan>
On 14th October 2000 after hearing extensive argument from counsels, I granted the applicant leave to issue an application for judicial review and a stay
of proceedings. On that occasion I said that my reasons for the orders would be provided in due course and the delay in providing
these reasons is regretted.
The application concerns two (2) decisions of the Commissioner of Inland Revenue (`CIR’) containea letter dated 11 July July 2000 (the liability decision) and in a second letter dated 14 July 2000 (the RBF advice) which the applicant seeks to challenge `on the basis among other things error of law, an abuse of power, breach of substantive legitimate expectation, estoppel’.
The sole ground of the CIR’s opposition to the grant of leave is that the applicant haled to exhaust an express aess alternative remedy provided under Section 62 of the Income Tax Act (the Act) whereby `any taxpayer dissatisfied with an assessment may, ......, within 60 days of the date upon which the notice of assessment has been
served upon him ......, lodge with the Commissioner an objection in writing to the assessment ...... stating the grounds on which
he relies :’ and under subsection (6) : `...... any person objecting to the decision of the Commissioner, ...... may, ......, appeal to the Court of Review and such appeal
shall be heard and determined as hereinafter provided’.
Plainly before the objection pr under Section 62 can be invoked there must be an `assessment’ of a ta a tax liability and a `notice of assessment’ served on the taxpayer. In this regard counsel for the CIR submits that all that the CIR is obliged to do under the Act is to `make an assessment of the taxable income of any taxpayer and of the tax payable thereon’. That process (whatever it may entail) is called an `assessment’ `in that it is an act of judging based on the information provided by the taxpayer’. Thereafter all the CIR is required to do under the Act, is to send a notice of that assessment to the taxpayer. `That notice is a record and advisement of the (CIR’s) judgment.’
Counsel for the respondent for his part submits, that `the scheme and logic of the Income tax Act and the taxation system is that `assessments’ and `notices of assessment’ apply only to
income taxes and not to other taxes like withholding taxes. They are special terms of art with limited technical meanings’ and, in the absence of either an `assessment’ or `notice of assessment’ the Section 62 objection/appeal process does not apply.
Whatsmore even if the CIR’s `liability ion’ could be considered an `assessment’ and `notice of assessmsessment’ they have been incorrectly directed to the applicant which is an overseas registered shipping company which merely receives payment
for its services and is therefore not `the person ...... by whom such royalty or other payment is made ......’ (see : Section 10A of the Act). On that score also, counsel claims, there is an absence of `locus’ on the applicant’s part to invoke the objection/appeal process under Section 62.
Finally, counsel for applicant submits, without dissent, that in the absencan incumbent, the position of the Court of Review, tb>, to which any appeal under Section 62 must be submitted, remains vacant and in counsel’s words `...... for all intents and purposes it is non-functioning’. In other words invoking the appeal procedure under Section 62 would be a futile exercise and accordingly, an impractical alternative.
In reply counsel for the CIR stressat in the absence of a definition in the Act of an `assessment’ or`notice of assessment’, the CIR’s letters demanding payment of withholding tax was in compliance with the requits of the Act sufficient to enable the applicant to t to invoke the objection/appeal process under Section 62.
Plainly from the above the applicant has `sufficient interest’ in the CIR’s decisions to support an application uion under Order 53 of the High Court Rules. Furthermore in the absence of a Court of Review or of a prescribed statutory form or format for taking an objection under Section 62(1) of the Act, I was satisfied that the application should be entertained and leave was accordingly granted.
Having said that however it should be noted that this court has not determined the merits of the applicant’s argument’s addressed
to the Court in the leave application and the matter remains at large and may be re-agitated as the CIR sees fit.
The applicant also sought a stay of proceedingthe event that leave was granted because, in counsel’s submission, to allow recovery
of thef the $8 million claimed pending the determination of the substantive action, `would decimate the applicant’s business ......’ without any guarantee of recovery in the event that the applicant succeeds.
Counsel for the CIR did not seriously oppose the stay and, bearing in mind that the origins of the de lay in the change in the the CIR’s decision which had held sway between the parties for over five (5) years, I considered that the `status quo’ that ought to be maintained was that which pertained prior to the CIR’s letter of 11th July 2000. Accordingly a stay of proceedings was granted.
I note from the file papers that the applicant filed a substantive motion fdicial review on 13th October 2000 and asnd as yet the same has not been issued. This led to an interlocutory summons by the CIR to dismiss the applicant’s application for failure to prosecute the proceedings with due despatch. This latter summons has also not
been assigned a date for argument, but in any event, the applicant’s have acted with despatch and accordingly the respondent’s summons
is misconceived.
Noting the above and by way of further directions, the respondent is ordered to file an affidavit within fourtee(14) days of receiving ving the applicant’s substantive summons and affidavit i.e. on or before 31.8.01, thereafter the applicant is granted leave to file an affidavit in reply within twenty one (21) days i.e. on or before 21.9.01 and the matter is adjourned for further directions on Friday 21.9.01 at 10.00 a.m. in chambers.
D.V. Fatiaki
JUDGE
At Suva,
17th August, 2001.
HBJ0030D.00S
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJHC/2001/60.html
