T v The Board of Inland Revenue

JurisdictionTrinidad & Tobago
JudgeBarnes, S.C.
Judgment Date24 June 1994
CourtTax Appeal Board (Trinidad and Tobago)
Docket NumberNo. V4 of 1993
Date24 June 1994

Tax Appeal Board

Barnes, Mem.; Burke, Mem.; Dean-Maharaj, Mem.

No. V4 of 1993

The Board of Inland Revenue

Mrs M. Robinson-Walters for appellant.

Mr. N. Mohammed for respondent.

Revenue law - Statutory interpretation — Item 5 of Schedule 2 of the Value Added Tax Act, no. 37 of 1989 — Zero rated items — “Preparations formulated for agricultural use including fertilizers, insecticides, herbicides and fungicides” — Appellant appeal against decision of the respondent wherein Value Added Tax was claimed from the appellant in respect of VAT supplies — Whether manure and fibre bast were zero — rated items under the Act — Finding of the court that manure and fibre bast were not in the view of the court encompassed within the words “preparations formulated” — Appeal dismissed.

Barnes, S.C.

The appellant filed twelve Notices of Appeal against decisions of the respondent wherein Value Added Tax was claimed from the appellant in respect of VAT supplies. When the appeals first came up for hearing on 24th March, 1994 it was submitted by the parties that inasmuch as the facts were identical and the point of law the same in all the appeals they were seeking to proceed with one appeal only — V 4 of 1993 and the others would follow the determination of that appeal. The twelve tax periods covered by all of these appeals fall within the time span 1st January, 1990 to 30th November 1991.


The court agreed and the hearing of Appeal V4 of 1993 took place on 6th May, 1994.


The facts are not in issue. Indeed the parties filed of 5th May, 1994 an Agreed Statement of Facts. For the purposes of this judgment we need only be concerned with paragraphs 9, 10, and 11 of a that agreed statement:–

  • “9. The respondent included in taxable supplies amounts received from sale of fibre bast and manure. These supplies had been considered to be zero-rated by the appellant.

  • 10. Fibre and fibre bast are produced at the say time by grinding coconut husk in a machine. Fibre bast is mixed with dirt and manure for propagating plants of any type. It improves the quality of plant growth and is extensively purchased by the Ministry of Agriculture for use in its propagating stations.

  • 11. The respondent concluded that the appellant was entitled to a reduced refund of $2,633.84. It claimed taxes in the amount c $3,484.62.”


The sole point of law to be considered is the interpretation of Item 5 of Schedule 2 of the Value Added Tax Act, No. 37 of 1989 which lists zero-rated items and reads as under–

“5. Preparations formulated for agricultural use including fertilizers, insecticides, herbicides, and fungicides except where imported or supplied in containers for retail sale.”


and in particular the words “preparations formulated for agricultural use including fertilizers, insecticides, herbicides, and fungicides.”


Attorney-at-law for the Appellant submitted that in order to discover whether manure and fibre bast were caught within the meaning of Item 5 of Schedule 2, the primary rule of statutory interpretation i.e. the literal rule should be applied. She pointed out that the Schedule which deals with zero-rated items has twenty-two (22) items; that it was not technical legislation but ordinary tax legislation expressed in normal language.


She referred to Maxwell on The Interpretation of Statues and to the dictionary meanings of the words “formulated,” “fertilizer” and “agriculture.”


Mrs Robinson-Walters pointed out that the use of the word including” extended the meanings of the words being defined, giving as authority for her submission P.R. v. Income Tax Commissioner 2 W.I.R. 149.


She suggested that doubt may have arisen in the mind of the draftsman whether manure is a fertilizer or whether a person who produces insecticides does so for agricultural use or for general use, but she added that that doubt would have been removes by the use of the word “including.”


Mrs. Robinson-Walters submitted that though taxing statutes are to be strictly construed the principle of beneficial construction which allowed the person intended to benefit so to do should not be forgotten.


She said it was for the court to determine whether manure and fibre bast were zero-rated but in that determination the policy of the legislation could not be forgotten. This she said could be determined by the schedule itself and she suggested that the policy of the Act in items 1 — 5 is to reduce the cost of living of basic food items and commodities needed by the farmer to produce that food, and that to exclude manure and fibre bast from this Schedule of zero-rated items would be contrary to that policy, and would be discriminatory against the poor farmer who is unable to afford the more sophisticated chemical fertilizers which are zero-rated.


Mr Mohammed, for the Respondent contended that the respondent did not dispute that manure and fibre bast were fertilizer nor that they were for agricultural use. What was disputed, he said was that manure and fibre bast did not fall within the meaning of the words “preparations formulated” and suggested that the ordinary grammatical meaning of these words would exclude manure and fibre bast.


He urged the court to give the provisions of Item 5 Schedule 2 their grammatical meanings and he referred to Bennion's “Statutory Interpretation” and suggested that to do otherwise would be to give the words a strained meaning. Mr. Mohammed pointed out that Bennion recognised that there were instances when strained meanings were necessary –

    Where there was repugnance in the ordinary grammatical meaning. 2. Where, the consequences of a literal construction are manifestly undesirable. 3. Where there is an error in the text. 4. Where having referred to the passage of time, the literal meaning could no longer be applied.

None of these circumstances was applicable and so there was no...

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