Esso Standard Oil, S.A. Ltd v The Board of Inland Revenue
| Jurisdiction | Trinidad & Tobago |
| Judge | Koylass, C.,Burke, M.,Julumsingh, M. |
| Judgment Date | 08 November 1983 |
| Court | Tax Appeal Board (Trinidad and Tobago) |
| Docket Number | A 12 of 1982 |
| Date | 08 November 1983 |
Tax Appeal Board
Koylass, C.; Burke, M., Julumsingh, M.
A 12 of 1982
S. Shivarattan for applicant
B. Roopnarine for respondent
Revenue Law - Corporation tax — Unemployment levy — Applicant filed an application pursuant to rule 23 of the Appeal Board Rules, 1967 for an order extending the time for appealing from decisions of the respondent upon objecting to assessments to corporation tax and unemployment levy for the years of income 1969 to 1976, inclusive — Whether there was reasonable cause for not appealing within the time limited — Whether the appeals had been filed thereafter without unreasonable delay — Finding of the court that the applicant, on receiving confirmation of the assessments for the years of income 1974 to 1976 had failed to instruct solicitors within a reasonable time thereafter to file appeals for the years 1970 to 1976.
On the 14th December, 1982, the applicant filed an application pursuant to rule 23 of the Appeal Board Rules, 1967 for an order extending the time for appealing from decisions of the respondent upon objections to assessments to corporation tax and unemployment levy for the years of income 1969 to 1976, inclusive. Filed together therewith and in support thereof, was an affidavit sworn to by Peter Mark Houllier, Zone Manager of the applicant company, and certain documents marked “PMH 1” to “PMH 16” inclusive, which had been referred to in the affidavit.
Prior to the filing of the application, the applicant had on 10th December, 1982, filed thirteen notices of appeal in regard to tax and unemployment levy for years of income 1969 to 1976.
In all cases, other than for the year of income 1969, the respondent had determined the objections barely within the one year period prescribed for so doing. For the years 1974 to 1976, the notices of appeal were filed approximately eleven months after determination of the objections. For the years 1970 to 1973 there were varying time lapses in filing appeals, the longest being approximately five years in respect of 1970.
On 12th January, 1983, the application came on for hearing and Mr. Roopnarine sought and obtained an adjournment to 1st March, 1983, to afford him an opportunity of communicating with John Andrews, an Assistant Commissioner of Inland Revenue who was then out of the country, regarding purported discussions between him and David Barbour, a chartered accountant who had been negotiating on behalf of the applicant, which had been referred to in the affidavit. Such a communication would, he stated, enable him to decide whether the application should be opposed.
At the hearing on 1st March, 1983, Mr. Roopnarine sought a further adjournment as he had not been able to communicate with Andrews. This further adjournment was refused and the Court proceeded to hear the application.
Mr. Shivarattan submitted that the application should be granted, as it was clear from paragraphs 7 to 11 of the affidavit and paragraphs 4 and 5 of a letter dated 2nd March, 1978, from Andrews to the applicant's accountants, Messrs. Price, Waterhouse & Co., that there had been continuing discussions between the accountants and Andrews to arrive at an agreement, failing which they would abide by the decision of the Appeal Board.
Paragraphs 7 to 11 of the affidavit read as under –
“7. I am advised by the Accountants and verily believe that in attempt to amicably resolve this recurring issue discussions have been held since 1976 between representatives of the Accountants and the Proposed respondent (and in particular Mr. David P. Barbour of the Accountants and Mr. John P. Andrews of the Proposed respondent) on the understanding that the final decision would apply to all the years of Income and it was for this reason that the Proposed appellant waived its entitlement to have the objection for the 1969 year of income determined in its favour after the statutory period for determining this objection had expired.
8. I am advised by the Accountants and verily believe that it was also understood during the said continuing discussions that the question of payment of tax would remain in abeyance until a final decision was made and accordingly that no action would be taken by the Proposed respondent pending this decision. I attach hereto a true copy of a letter dated the 1st March 1979 marked “PMH 14” from the Accountants to the proposed respondent which refers to the said discussions and confirms the understanding that no action would be taken by the Proposed respondent pending a decision in this matter. I am advised by the Accountants and verily believe that no further determination was received by the Proposed respondent although the latter years of income were similarly assessed to disallow the said sums claimed by the Proposed appellant which assessments were confirmed by the Proposed respondent after objection as in the previous years of income.
9. On the 11th February, 1982 the Proposed appellant received simultaneous Notices of confirmation of Assessments for the years of income 1974, 1975 and 1976 which again disallowed the said sums. Since no final decision appeared to be forthcoming from the above discussions the Proposed appellant decided after consultations with the Accountants to refer these matters to this Honourable Court for final determination of this long outstanding issue. Several consultations had to be then held with the Head Office of the Proposed appellant to provide instructions to our Solicitors, Messrs. Fitzwilliam, Stone, Furness-Smith & Morgan, and the Notices of Appeal could not in the circumstances be filed within the 28 day period from confirmation of the said Assessments. I attach hereto marked “PMH15” what I am advised by our Solicitors and verily believe is a true copy of their letter dated 11th March 1982 to the Proposed respondent apprising the latter of the expected delay in preparation of the Notices of Appeal and our intention to file an application for an extension of time.
10. Once further instructions were given to Solicitors and counsel, the Proposed appellant was advised by counsel that in view of the common questions of law and fact and the rights to relief claimed by the Proposed appellant arising out of the same transactions for all the years of income under Appeal and consistent with the aforementioned understanding between the Accountants and the Proposed respondents from the said discussions, that simultaneous Notices of Appeal should be filed for all of the years of income and an application made for consolidation. I also attach hereto marked “PMH16” what I am advised by our Solicitors and verily believe is a true copy of their letter of the 10th August 1982 to the Proposed respondent apprising the latter of these intended applications.
11. In the premises these applications for extensions of time and consolidation were not made previously due to the extended discussions between the Accountants and the proposed respondent on the recurring issue of the disallowance of deductions for the said sums, the absence of a final determination by the Proposed respondent on these discussions and the time required to instruct our legal advisers on this protracted and complicated matter which extended over eight (8) years of income to bring same to a conclusion under the jurisdiction of this Honourable Court.”
The letter of 2nd March, 1978, reads as under –
“I refer to your letter of 11th January, 1978 and write to advise that I have reviewed your letter to the Chairman, Board of Inland Revenue dated 10th March, 1967 and have not been able to agree with your contention that the letter is in reference to Esso Standard Oil S.A. Limited, nor with your client's that the position outlined therein is accurate and remains unchanged.
An examination of the returns and supporting documents submitted for the years 1968 – 1975 revealed no evidence of Research Expenses for Commissions received, nor was it possible to identify Advertising charges paid to any U.S. Advertising agency.
Further, to substantiate your contention that the payment of Commissions to non-resident companies is not subject to Withholding Tax under the provisions of Section 23A (1)(b), I requested that you furnish documentary evidence to support the fact that the payment arose outside Trinidad and Tobago (my letter to you of 30th November, 1976 refers) and to date no reply has been received.
I would like to have your views on this matter as early as possible, as the Board is prepared to confirm the objection of the 1971 Year of Income and to proceed, if your client so decides, to the Appeal Board for a final determination in this matter.
I would like to add, that the statutory period for determining your objection to the 1969 Year of Income has expired and that the objection, in accordance with Section 42(8), shall be deemed to have been determined in your favour. Since this objection is in respect of the same issues raised for the Years of Income 1970 and 1971, please indicate whether you would be prepared to have this objection determined on the basis of whatever is decided in respect of the Years 1970 and 1971.”
He further submitted that in respect of each of the years of income, the letters filed with the affidavit disclosed that there had been one common issue under discussion, that is, the question whether commissions, fees and licences paid to non-residents were subject to withholding tax, and appeals for the years of income 1970 to 1973 had not been filed earlier, as discussions between Andrews and Barbour had proceeded on the understanding that at the end of these the final decision would be applicable to all the years to 1976.
Counsel referred to section 43D (3) of the Income Tax Ordinance (hereinafter referred to as “the Ordinance”) and stated that the...
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