A Supreme Court Judge has said that it would be unjust to ask taxpayers, as a pre-condition, to deposit 25% of the assesed tax if an appeal is to be filed.
Supreme Court Judge K. Sripavan, delivering the 16th ICASL (Institute of Chartered Accountants of Sri Lanka) Annual Tax Oration on Judicial Review of Fiscal Statutes and Protection to Taxpayers in Colombo last week said if the ‘words’ of the new Tax Appeals Commission Act No. 23 of 2011 Act leads to injustice, inconvenience, unreasonableness or absurdity, the democratic process must be used to bring about a change in the Act. It is for Parliament to alter the law if the injustice, merits an alteration. The function of a Court is to give effect to the expressed intention of Parliament keeping in mind to do justice within the law, he said.
Under the new Act, the Tax Appeals Commission replaces the Boards of Review. The members of the Commission are to consist of retired judges of the Appellate Courts. A panel of legal advisors comprising not more than 10 persons who have gained eminence in the field of law will assist the Commission in the exercise and discharge of its powers, duties and functions under the Act. The Commission is empowered to hear all appeals in respect of matters relating to imposition of any tax, levy or duty by the Commissioner General of Inland Revenue.
The manner and the time period within which such an appeal is to be preferred is not laid down in the Act. However, Justice Sripavan said that it has to be “prescribed” in terms of Section 7(4). “Prescribed” means “prescribed by any rule, regulation, by-law, proclamation or order made there under” as provided in Section 2 of the Interpretation Ordinance. It was noted that the Act is silent as to who could make these rules, regulations or orders. Another noticeable feature is that the word “Commissioner General of Inland Revenue” has not been given a wider interpretation in the Act. Thus, all appeals to the Commission have to be necessarily made from the determination made by the Commissioner General himself, he emphasized.
When Parliament has entrusted to the Commission to do a particular act, it is not a matter for the Courts to decide so long as the Commission acts fairly and in good faith. It is for the Commission and not the Courts to decide how much information each of the members should have when considering a particular case. As long as the Commission has enough information to enable it to make a fair assessment of the case, the Courts will not interfere, Justice Sripavan said.
Explaining in length on the Judicial Review process, Justice Sripavan noted that Judicial Review is the procedure whereby the Court will supervise or review the actual or proposed conduct of a public body on the application of a person who has a complaint or grievance about the conduct and who has sufficient interest in the matter entitling him to be heard. Generally, Courts are reluctant to interfere with the decisions and the conduct of tribunals by way of judicial review.
There is a substantive and a procedural basis for this reluctance. The substantive basis is the realization that Parliament has entrusted the hearing of disputes such as tax appeals to an independent and informed tribunal with wide knowledge and experience of the relevant law and practice, and has given the Courts an appellate jurisdiction only, often limited to questions of law rather than of fact. The procedural basis for the Court’s reluctance is to interfere by way of judicial review is the existence of a right of appeal from the tribunal’s decision to the Superior Courts, he revealed.
He noted that judicial review will not normally be granted where an alternative remedy is available. Thus, the Courts will only be willing to review a tribunal’s decision in exceptional circumstances only. A party dissatisfied with the decision of a tribunal invokes the jurisdiction of the Court by way of judicial review and has to establish an excuse for his failure to invoke and pursue the appellate jurisdiction.