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Friday, 25 January 2013 12:00

Appeal Bench reduces fines for non payment of VAT

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The Appeal Court, having on the bench the Senior Puisne Judge, Keshoe Parsad Matadeen, and Justice Prithiviraj Fekna, has allowed the five appeals lodged by Nurjandoa & Ramchurn Enterprise Ltd contesting the fines, three times the value of the VAT due, imposed by the Intermediate Court in five separate appeals.
These appeals are consolidated for one judgment only to be filed in each appeal case, given that they raise the same issue. The appellant company, which operates in the field of Building and Civil Engineering and is VAT registered since December 1998. It was prosecuted on five separate information, containing three counts each, for failing to pay tax due to the defunct Commissioner of Income Tax, now the Mauritius Revenue Authority (MRA) in respect of a number of taxable periods.

In the first appeal, it was alleged that the company failed to pay tax due to the Commissioner in the following sums: Rs 161,005.00 in respect of taxable period quarter ending 30 June 1999, Rs 134.074.80 in respect of taxable period quarter ending on 30 September 1999 and Rs 188,830.70 in respect of taxable period quarter ending 31 December 1999. The appellant pleaded guilty to the charge and the Magistrate sentenced him to pay a fine of (1) Rs 804,488.60 under count II. This represents 3 times the tax that was originally due, plus 3 times the 100% penalty imposed previously by the commissioner.

The appeal was originally based on 3 grounds. Ground 2 was dropped so that the bench is left with ground 1 and 3, which read as follows: (1) The learned magistrate was wrong to impose the penalty prescribed by section 60 (3) (a) of the Value Added Tax 1998 (as amended) in as much as it violates (i) the principal of proportionality and (ii) the independence of the Court of law with regards to its sentencing power, and therefore, is in breach of Section 1,3 and 7 of the Constitution. Ground 3 “Having regards to all the circumstances of the case the sentence is manifestly harsh and excessive.” In its conclusion the appeal bench allowed the five appeals and substituted for the fine imposed by the trial Court. The new sums represent 3 times the initial tax that was owed by the accused company.
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