(UC Trading Company Ltd v (Commissioner of General Sales Tax (Attorney General of Belize

JurisdictionBelize
JudgeMr Westmin R.A. James (Ag)
Judgment Date25 May 2021
Docket NumberCLAIM NO. 402 OF 2018
CourtSupreme Court (Belize)

IN THE SUPREME COURT OF BELIZE, A.D. 2018

Before: The Hon Justice Mr Westmin R.A. James (Ag)

CLAIM NO. 402 OF 2018

In the Matter of Sections 3, 17, and 20 of the Belize Constitution Act, Chap 4 of the Substantivelaws of Belize

and

In the Matter of Section 33 of the General Sales Tax Act, Chapter 63 of the Substantive Laws of Belize

Between:
(UC Trading Company Limited
Claimant
and
(Commissioner of General Sales Tax (Attorney General of Belize
Defendants
Appearances:

Mr William Lindo for the Claimant

Ms Brianna Williams for the Defendant

1

This is a judicial review hearing raising constitutional and administrative law issues around the imposition of and the operation of the General Sales Tax (“ GST”) regime in Belize.

Facts
2

The Claimant is a trading company incorporated under the laws of Belize. During the period April to August 2016 (the “material period”) carried on business as, inter alia, general merchants, importers, wholesalers and retailers, made taxable supplies but was not registered for GST during this period. The First Defendant, by virtue of section 51(2), responsible for the administration of this Act and for the assessment, collection, and recovery of GST.

3

By way of letter dated 27 th September, 2016, the First Defendant notified the Claimant that it had been registered retroactively for GST with effect from 1 st September, 2016 and that an auditor would assess the Claimant's tax liability in respect of the material period.

4

Further to a request by the First Defendant dated 20 th December, 2016 for access to the Claimant's books and records in order to conduct an audit, the First Defendant conducted an audit on the Claimant's books and records in respect of the material period between 29 th December, 2016 and 3 rd March, 2017.

5

As a result of said audit, the First Defendant issued a first notice dated 13 th April, 2017 (the “First Notice”) assessing the Claimant to a liability to GST of $32,258.81 (on the basis that the Claimant made sales totalling $258,070.49 for the period April to August 2016) and indicating the sum for penalties and interest for the GST owed. The Claimant did not receive the assessment until the 11 th May, 2017. On the 24 th May, 2017 and the 23 rd January, 2018 the Claimant requested a review of the assessment by the First Defendant.

6

The review was held on the 27 th March, 2018 in the presence of the Claimant's representatives Mrs. Amaryllis Cocom and Mr. Wilfredo Cocom. Also present at the review was Mr. Evan Brown, the then Deputy Commissioner of GST, Mr. Edd Usher, the then Legal Counsel for the GST Department, and Mr. Brian Ferguson, the auditor who conducted the audit.

7

The First Defendant reviewed the assessment and sent a letter to Claimant on the 3 rd April, 2018 with the Assessment Decision.

8

The Claimant claimed the following reliefs, namely:

  • a) An order of certiorari to quash the decision of the Defendant as contained in its letter dated 3rd April, 2018 (the ‘Assessment Decision’);

  • b) A Declaration that Section 33(3) of the General Sales Tax Act Chapter 63 of the Laws of Belize, which imposes a six month limit on input tax credits, is unconstitutional as applied to Sections 3 and 17 of the Belize constitution;

  • c) A Declaration that the 1st Defendant's Assessment Decision was procedurally unfair as it is wholly devoid of any reasons as to how the 1st Defendant arrived at her assessment and therefore barred the Claimant from formulating any ground of appeal;

  • d) Further, or alternatively a Declaration that Assessment Decision was irrational as it is wholly devoid of any reasons as to how the 1st Defendant arrived at her assessment and what evidence was taken into account by the 1st Defendant and the sufficiency of inquiry, if any, in arriving at the Assessment Decision;

  • e) A Declaration that the 1st Defendant acted ultra vires the Act in its abject failure and breach of statutory duty to inform the Claimant:

    • a. That it had a right to appeal the Assessment Decision to the GST Appeal Board; and

    • b. The timeframe in which to lodge such an appeal.

  • f)Interest pursuant to s.166 of the Supreme Court of Judicature Act on such sums due to the Claimant at such rate and for such period as the Court shall think fit;

  • g) Costs; and

  • h) Such further or other relief as the Court sees fit.

Issues for Determination
9

The parties have agreed that the following issues are to be determined by the Court:

  • i. Whether Section 33(3) of the GST Act is un-Constitutional when read along with sections 3 and 17 of the Belize Constitution;

  • ii. Whether the Assessment Decision was procedurally unfair and/or irrational as it was wholly devoid of any reasons; and

  • iii. Whether 1st Defendant acted ultra vires the GST Act in failing to inform the Claimant that it had a right to appeal and the timeframe in which to lodge such an appeal.

Issue 1: Whether Section 33(3) of the GST is unconstitutional when read alongside sections 3 and 17 of the Constitution
10

The Claimant having had the benefit of the CCJ's decision in Guyana Stores Limited v The Attorney General of Guyana, et al, [2018] CCJ 2 (AJ), and in particular paragraph 29 where the CCJ relying on the decision of Crane JA in Bata Shoes v CIR and AG [1976] 24 WIR 198, held a legal tax falls within the limitation section of the Constitution and does not amount to an unconstitutional compulsory acquisition of property, abandoned this aspect of its claim.

Issue 2: Whether the Assessment Decision was procedurally unfair and/or irrational as it was wholly devoid of any reasons
11

The second ground on which the Claimant contends that there was a breach of natural justice was the First Defendant's failure to provide reasons for its decision. Therefore, the issue to be considered is whether the Defendant had a duty to provide reasons, and if it failed to give reasons whether this would have resulted in a breach of natural justice.

12

Section 42(2) of the GST Act stipulates that the First Defendant must put in writing the decision after the review. It states:

“The Commissioner shall give to the person so requesting the review notice in writing of his decision upon the review, which may include confirmation, amendment, or vacation of the assessment.”

13

There is no general rule of law that reasons should be given for administrative decisions: Stephan v General Medical Council [1999] 1 W.L.R. 1293 at 1300. The circumstances which give rise to a duty to provide reasons include where it is required by statute; to enable an effective right of appeal; and, where it is required by the common law: De Smith's Judicial Review 8th edition at paras 7–098 to 7103.

14

In Canada, a common law duty for administrative decision makers to give reasons is also recognized where there is a right of appeal Baker v. Canada (Minister of Citizenship and Immigration) (1999) 2 SCR 817 and also where the decision has “important significance for an individual.” In the case of Mahabir Prasad v. State of U.P. (1970) 1 SCC 764, the Supreme Court of India similarly held that if a quasijudicial order is subject to appeal the law necessarily implies the requirement of reasons otherwise the right of appeal shall become ‘an empty formality’.

15

The Claimant and Defendant accepts this position in their submissions. The Claimant goes further to highlight that the increasing modern trend is to provide reasons for the administrative decisions, which they describe as a “modern imperative of good administration”.

16

There is indeed now a greater trend towards an administrative body providing reasons. In R v Lambeth LBC, Ex Parte Walther Sir Louis Blom-Cooper QC [1993] Times, 6 asserts:

“It seems to me that English law has now arrived at the point where there is at least a general duty to give reasons whenever the statutorily impregnated administrative process is infused with the concept of fair treatment to those potentially affected by administrative action. It was hard to envisage any situation, except possibly where the giving of reasons would reveal some aspect of national security or unintentionally disclose confidential information or invade privacy. In many cases, exceptions to the duty to give reasons might be regarded as justifying more limited forms of reasons, rather than an absence of any duty to give reasons.”

17

Similarly, the Irish Supreme Court in the case of Mallak v Minister for Justice, Equality and Law Reform [2012] IESC 59 held at paragraph 74:

“… The developing jurisprudence of our own courts provides compelling evidence that, at this point, it must be unusual for a decision maker to be permitted to refuse to give reasons. The reason is obvious. In the absence of any reasons, it is simply not possible for an applicant to make a judgment as to whether he has a ground for applying for judicial review of the substance of the decision and, for the same reason, for the court to exercise its power.”

18

It is therefore now generally accepted as sound principle in the realm of public law that a failure by a public authority to give reasons, or adequate reasons, for a decision may be unlawful. As explained by Boodoosingh J as he then was,

“There is a lot to be said for the increasing trend of modern decisions to require public authorities to give reasons for their decisions. This would allow all parties to be aware of the issues to which the Authority addressed its mind and the means by which it arrived at its decision. This can only enhance the confidence in the operations of the First Defendant. Further, providing reasons for administrative decisions can lead to improved efficiency in the administration of justice. When a decision is issued, along with the reasons for the decision, this could eliminate matters of the same nature being referred to the Recognition Board as it may become easier to predict the outcome...

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