James Ramsahoye v Guyana Revenue Authority

JurisdictionCaribbean States
JudgeAnderson,Justice Saunders,Barrow,Mr Justice Barrow,Mr Justice Wit,Mr. Justice Burgess,Mr Justice Barrow, JCCJ
Judgment Date17 May 2022
CourtCaribbean Court of Justice
Docket NumberCCJ Appeal No GYCV2021/006
Between
James Ramsahoye
Appellant
and
Guyana Revenue Authority
Respondent

[2022] CCJ 10 (AJ) GY

Before

The Honourable: Mr Justice A Saunders, PCCJ

Mr Justice J Wit, JCCJ

Mr Justice W Anderson, JCCJ

Mr Justice D Barrow, JCCJ

Mr Justice A Burgess, JCCJ

CCJ Appeal No GYCV2021/006

GY Civil Appeal No 60 of 2005

IN THE CARIBBEAN COURT OF JUSTICE APPELLATE JURISDICTION

Practice and Procedure — Appeals — Judgment — Execution of — Quashing order granted by the High Court — Respondent appealed decision of High Court to quash decision — Quashing order upheld by the Court of Appeal — Erroneous order of the Court of Appeal that appeal allowed in part — Enforcement of Quashing Order — Application to Court for payment out of court of a sum of money paid into court pending the determination of the appeal.

Income Tax — Tax unlawfully levied — Unjust enrichment — Whether Damages for breach of contract of employment are exigible to Income Tax — Whether taxpayer can enforce the return of a sum of money unlawfully deducted by a taxing body — Whether taxpayer entitled to Interest — Income Tax Act Cap 81:01, s 5b.

Appearances

Mr C V Satram, Mr R Satram and Mr Ron Motilall for the Appellant

Ms Judy Stuart-Adonis, Ms Hessaun Yasin-Nandlall and Ms Maritha Halley for the Respondent

REASONS FOR DECISION of The Honourable Justice Saunders, President and The Honourable Justices Anderson and Barrow

Delivered by The Honourable Mr Justice Barrow And of The Honourable Mr Justice Wit And of The Honourable Mr. Justice Burgess

17

th May 2022

REASONS OF THE HONOURABLE Mr Justice Barrow, JCCJ :
1

On the day following the hearing, the Court gave judgment in favour of the appellant, James Ramsahoye (‘the taxpayer’) and stated that it would give reasons for its decision. These are the reasons for allowing the appeal and ordering the payment to the taxpayer of the sum of money due to him from his former employer, Linden Mining Enterprise Ltd (‘Linmine’) which the respondent, the Guyana Revenue Authority (‘the Revenue’) had garnished.

The Assessment and Garnishment
2

In separate proceedings, in a judgment delivered on 2 March 2004 the Court of Appeal had awarded damages to the taxpayer of approximately G$78 million together with interest and costs to be paid by Linmine for wrongful termination of his employment. By a letter to Linmine dated 29 September 2004 the Revenue, pursuant to ss 93 and 102 of the Income Tax Act, Cap 81:01 (‘the Act’) directed Linmine to garnish or deduct from the damages and pay over to the Revenue the sum of G$45,132,975 as tax due and owing by the taxpayer. Linmine complied with the demand. The letter to Linmine from the Revenue stated:

Mr. Ramsahoye was in receipt of a salary of US$4330.00 and a taxable allowance of US$750.00 per month from 9 th January, 1990 to the 31 st May, 1998… [on which Linmine omitted to deduct tax.]

His total income and taxable allowance for this period was US$513,080: and his taxable income after deducting his allowance … of US$75,750: would be US$437,330. The income tax payable on this sum is US$167,065.

Mr. Ramsahoye was awarded the sum of US$174,032.49 being salary for 41 months. Income Tax is also payable on the sum less allowance of G$240,000: (US$1,188) for the period of 3 years and 5 months.

The taxable sum is therefore US$503,942 and the income tax payable is US$223,431: its equivalent being G$45,132,975.

3

The Revenue did not notify the taxpayer of the assessment, if indeed the letter may properly be regarded as an assessment, or of the demand, and the taxpayer was totally denied the right given by law to dispute the assessment. 1 The High Court quashed the assessment on the ground of that violation of the taxpayer's rights but stayed execution of its judgment for three weeks.

4

The Revenue appealed against the quashing order, thus staving off payment to the taxpayer of the garnished amount. In an interim order, the Court of Appeal ordered the money be paid into court, and this was done. Even after the Court of Appeal upheld that quashing order, there was no order for the money to be paid out of court to the taxpayer. This continuing denial to the taxpayer of his money helps to explain what the objective of the taxpayer's appeal to this Court was, since there should have been no need for him to appeal given that the order quashing the assessments and garnishment of the money remained standing.

The Order Appealed
5

In the course of the hearing, the Court inquired of counsel whether there truly had been a need for the taxpayer to appeal the order of the Court of Appeal to this Court. It is apparent that the taxpayer thought he needed to appeal because he did and that was the course of prudence. But the matter was uncertain. It is an uncertainty that was appreciated by counsel for the Revenue, who rightly accepted that perhaps the release of the garnished sum could have been obtained by an application to the Court of Appeal for an order to pay it out of court.

6

The uncertainty is understandable in the following context. In a High Court order entered on 8 June 2005, Persaud J had issued an order absolute of certiorari quashing: (i) the two purported assessments of tax 2 due from the taxpayer upon which the garnishment was based, and (ii) the direction by the Revenue to the employer to deduct certain sums from an award of damages due from the employer to the taxpayer.

7

As stated in the High Court quashing order, the sums the Revenue had directed to be deducted were (a) US$167,065 as tax payable for the period 9 January 1990 to 31 May 1998, and (b) US$56,366 as income tax on the damages awarded to the taxpayer as compensation for loss of earnings for 41 months.

8

As the order stated, it was made:

… [O]n the ground that the said purported assessments of tax and the order directing the … [employer] to deduct and remit were made without or in excess of jurisdiction, are unreasonable, unlawful, unconstitutional, arbitrary, capricious, in breach of natural justice, ultra vires, null and void and of no legal effect … (Emphasis added)

9

It is emphasised that what the High Court quashed were the purported assessments — in the plural — as the quashing order identified its target.

10

The Revenue appealed the decision. Having upheld the quashing order as its decision of the appeal, the Court of Appeal subsequently issued a formal order, the relevant parts of which are as follows:

IT IS ORDERED THAT this Appeal be and is hereby allowed in part.

IT IS FURTHER ORDERED THAT the provisions of the Income Tax Act Chapter 81:01 as to notice of assessment, objection and Appeal must be complied with in relation to the Respondent.

With respect, the making of an Order in these terms, along with the failure to even mention payment to the taxpayer of the money wrongfully withheld from him, would naturally have produced uncertainty and, indeed, confusion.

11

In addition, the second limb of the order, which stated that it is further ordered that the procedural provisions of the Act must be complied with in relation to the taxpayer, strongly suggests that it remained open to the Revenue to cure its procedural breaches. That proposition contains the notion that the Revenue remained entitled to retain the taxpayer's money that had been unlawfully taken because the Revenue could comply with the procedural steps it had previously violated and thereby lawfully keep the taxpayer's money.

Construing the Order of the Court of Appeal
12

In the Decision of the Court dated 21 December 2020, the Court of Appeal had laid out the steps and reasoning that led to the making of the formal order, and a closer reading of the Decision produces an appreciation of the confusion that the Order generated. The part of the Decision in favour of the Revenue that inspired authorship of the minute that the appeal was ‘allowed in part’, appears at [28], where the Court of Appeal decided that:

[28] … [T]he Commissioner was entitled, in principle to assess income tax on the award … of damages for loss of earnings for 41 months. (Emphasis added)

13

The expression emphasised in that passage from the court's reasoning makes clear that the court was not deciding on the actual assessment, in this case. The court was pronouncing, in principle, on the liability to tax of the award of damages. So, the Revenue ‘succeeded’, in principle, in relation to this ground of appeal, by obtaining a decision of the Court of Appeal that the Commissioner, in principle, was entitled to assess income tax on the damages awarded as compensation for lost salary. The Court of Appeal made no contrary pronouncement, in its Decision, on the decision of the High Court to quash the assessment of income tax of US$56,366. Therefore, if the expression may be forgiven, the assessment/s of income tax due from the taxpayer remained quashed.

14

Where the Revenue's appeal did not succeed, even in principle, was in relation to the assessment of tax for the period 1990–98. The Court of Appeal mentioned two issues with regard to this assessment, at [29]. These were whether the Commissioner had power under s 72 of the Act, to deduct income tax for this period and, more particularly, whether the statutory procedure for dealing with disputes and providing for review and appeals were afforded to the taxpayer.

15

In its discussion that followed, of the liability to tax under this head, the Court of Appeal made no further mention of the s 72 provision, which establishes a time limit of seven years for the Commissioner to assess a person to tax for a given year of assessment. In combination with s 7 of the Act, the limitation period is effectively cut down to six years. The assessment, in this case, had been made in 2004 for the years 1990–98. As later was accepted by the Revenue, the assessment for the stated years was time barred when it was made.

16

However, as noted, the Court of...

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