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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(1989) 3A CLR 620
1989 May 30
[SAVVIDES, J.]
IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION
MANOLIS K. STAMATIOU,
Applicant,
v.
THE REPUBLIC OF CYPRUS, THROUGH THE COMMISSIONER
OF INCOME TAX,
Respondent,
(Case No. 721/86)
Executory act-confirmatory act-Assessment of income tax-Recourse impugning the assessment dismissed -Letter demanding interest as from original assessment-Since in any event the original assessments carry interest as from the day of their issue, the letter did not amount to an executory, but to a confirmatory act.
Time within which to file a recourse - Constitution, Art. 146.3-Letter demanding payment on interest on assessed income tax-Objection filed after the expiration of 6 months-Insistence by respondents on the payment of interest-Recourse out of time.
In this case the applicant was assessed to pay income tax in respect of the years of assessment 1977(76), 1978(77) and 1979(78). He impugned the assessment by recourse to this Court. The recourse was dismissed. Following the dismissal, the respondent wrote to the applicant demanding payment of interest in accordance with the original assessment. Nearly 6 months later the applicant disputed his obligation to pay the interest. The respondent did not accept applicant's contention and replied to the applicant accordingly. Hence this recourse The grounds of dismissing the recourse appear sufficiently in the hereinabove Headnotes.
Recourse dismissed. Costs £100 against the applicant.
Case referred to:
Stamatiou v. Republic (1986) 3 C.L.R. 391.
Recourse.
Recourse against decision of the respondent to demand from applicant the payment of interest on the income tax assessed on him for the years 1977-1979.
Chr. Triantafyllides, for the Applicant.
Y. Lazarou, Counsel of the Republic B, for the Respondent.
Cur. adv. vult.
SAVVIDES, J. read the following judgment. The present recourse is directed against the respondent's demand for payment of interest on the income tax to which applicant was assessed to pay in respect of the years of assessment 1977(76), 1978(77) and 1979(78) totalling to £1,694.-.
The applicant during the years 1977, 1978 and 1979 was employed by the "Sol Maritime Services Ltd", as an Inspector on board the ferry-boat "Sol Phryne". He also carried a business of livestock breeding.
On 1st August, 1980, the respondent issued to the applicant notices of Assessment of Income Tax for the years of assessment 1977 to 1979 against which he objected by a letter dated 27th August, 1980, addressed to the respondent by his accountant, on the ground that such assessments were not in accord with applicant's declarations of income and were excessive.
On 17th November, 1980, the respondent issued to the applicant notices of Assessment for the years of assessment 1977 to 1979, by which applicant was requested to pay the tax assessed amounting to £657.30 for the year 1977 plus interest at 6% as from 1st July 1978, £1,592.65.- for the year 1978 plus interest at 9% as from 1st July 1979, and £497.50 for the year 1979 plus interest at 9% as from 1st July 1980. The claim for payment of interest was based on section 42(2) of the Assessment and Collection of Taxes Laws, 1978 - 1979.
Applicant filed to the Supreme Court recourse No. 36/81 challenging the said assessment. The Supreme Court by its decision delivered on 25th February 1986, dismissed applicant's recourse (see Stamatiou v. The Republic (1986) 3 C.L.R. 391). The Supreme Court found at p. 400 that:
"In the circumstances I should say that the sub judice decision was reasonably open to the respondent and was properly and correctly reached in accordance with the laws and regulations in force."
No appeal was lodged against the aforesaid decision of the Supreme Court which became final and conclusive.
Following the Supreme Court's decision the respondent on 15th March, 1986, demanded payment of the tax and interest due under the assessments the subject-matter of Recourse No 36/81 by forwarding to the applicant "Assessment Notices" under Code 8, which according to Note 7 thereon were "final assessments following Court Order or settlement after appeal to the Supreme Court."
Nearly six months later applicant through his tax consultants addressed the following letter to the respondent dated 5th September 1986:
"With reference to the notices of Assessment under Code 8 which were sent for the year of assessments 1977, 1978 and 1979 we wish to observe that the demand for payment of interest as from the 1st of July of each of the respective years of assessments is unjust, once the said assessments were subject to a recourse to the Court which was finally decided in March, 1986.
2. As the question of assessment of the said income was a question of law which was submitted to the Court and as the issue of the decision of the Court delayed for a period of more than five years, you are requested to write off the claim for interest and claim interest as from 1st May 1986."
The respondent replied to the above request by letter dated 9th October 1986, the contents of which are as follows:
"I refer to your letter, File No 1374, dated"5th September,1986, and wish to inform you that the notices issued to your said client on 15th March, 1986, are not new assessments but in fact they are notices for the payment of the amount of tax which had been assessed under the assessments against which recourse No. 36/81 was filed.
2. The sub judice assessments as issued on 17th November 1980, were affirmed by the decision of the Supreme Court. The question of payment of interest was not raised in the recourse and no mention is made in the judgment of the Court in this respect. Therefore, the sub judice assessments are in force as originally issued, including the dates of the calculation of interest.
3. For the above reasons you are requested to advise your client to settle the payment of the tax due and interest the soonest possible".
After the rejection of applicant's request his consultants addressed another letter to the respondent dated 24th October, 1986, repeating their request. Respondent by letter dated 6th- November 1986, replied repeating the contents of paragraphs 1 and 2 of his previous letter to which he added the following:
3. Your contention as per your letter that the Income Tax Office of Limassol refuses to issue new notices in respect of the payment of tax and interest thereon is not founded for the reason that such notices were sent on 15.3.1986, in accordance with the practice followed by this office notwithstanding that such assessments were the subject- matter of the assessments issued on 17.11.1980 and approved by the Court on 25.2.1986."
Counsel for the respondent by his opposition raised, inter alia, the following preliminary objections:
"1. The act and/or decision complained of does not amount to an administrative act or decision of an executory nature in the sense of Article 146.1 of the Constitution as it is merely confirmatory of an earlier decision which was communicated to the applicant on 17th November 1980, and as such it cannot be made the subject of a recourse.
2. The present recourse is out of time as it was filed after the lapse of the period of 75 days provided by Article 146.3 of the Constitution."
In the course of the proceedings it was agreed upon between the parties that such objections be dealt with preliminary to the hearing as their determination if in favour of the respondent, would decide the fate of the present recourse.
Counsel for respondent in support of his preliminary objections submitted that the demand for the payment of tax and interest made under the Assessment notices sent to the applicant after the decision of the Supreme Court in Recourse No. 36/81 dated 15th March, 1986, does not amount in fact to an administrative act or decision of an executory nature but is merely confirmatory of the original assessments issued on the 17th November 1980 and as such cannot be made the subject of a recourse. He further submitted that the present recourse violates the doctrine of res judicata as the adjudication of the Court in the previous recourse of the applicant was an adjudication on the merits of the sub judice assessments. Finally he submitted that in any event the present recourse is outside the time limits prescribed by the Constitution as the final assessments were made on the 17th November, 1980.
Counsel for applicant on the other hand submitted that Recourse No. 36/81 dealt only with the substance of the assessments and did not deal with the question of interest. He further contended that the dispute of interest arose subsequently and the applicant's demand for its deduction was raised subsequently to the decision of the Supreme Court and therefore the sub judice assessments could not be confirmatory of previous assessments nor the decision of the Court could be treated as amounting to res judicata in so far as the interest is concerned.
From the material before me it is clear that the assessments of income plus interest on such assessments are the same both as appearing in the notices of Assessment of November, 1980, which were the subject-matter of Recourse No. 36/81 as well as mentioned in the "Assessment Notices" under Code 8 forwarded to the applicant on 15th March, 1986, demanding payment and described as "Final assessments following Court Order or settlement after appeal to the Supreme Court". The assessments made in November 1980, which included both tax and interest were affirmed by the Court in Recourse No. 36/81 as "properly and correctly reached in accordance with the Laws and regulations in force."
Though in the judgment of the Court no specific reference is made to interest, such interest was in any event part and parcel of the assessments which were before the Court, the correctness of which was approved.
I agree with counsel for the respondent that the "Assessment notices" of March 1986, do not contain any new element or embody any new decision but they are merely a repetition of the contents of the previous assessments. As such they are nothing more than confirmatory of the previous assessments and therefore, by themselves do no amount to an administrative act or decision of an executory nature in the sense of Article 146.1 of the Constitution. Furthermore once the original assessments which were challenged by Recourse No. 36/81 were found by the Court as correct, the confirmatory assessments in respect thereof cannot be challenged once again as same became final and conclusive by the decision of the Court which in this respect became a res judicata.
My above finding disposes of the present recourse as being untenable.
I shall proceed further however, on the assumption that the Assessment notices of 15th March, 1986, are new assessments. Such assessments were in any event final assessments. The applicant failed to challenge them within the period of 75 days prescribed by the Constitution and after the expiration of six months he came forward requesting a deletion of the claim for interest. The respondent by his letters dated 9th October, 1986, and 6th November 1986 informed the tax consultants of the applicant as to the legal position and requested them to advise their client to pay the amounts due. It is clear from the contents of such letters that they are merely explanatory and informatory of the position as it finalized as a result of the decision of the Court in Recourse No. 31/80 and do not embody any new decision. Therefore, assuming that the notices communicated on the 15th March, 1986, were new final notices, the present recourse which was filed on the 26th November, 1986, is in any event out of time.
In view of my above findings the present recourse cannot proceed and has to be dismissed.
In the result the recourse is dismissed with £100. - costs against the applicant.
Recourse dismissed with £100.-
costs against applicant.