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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(1989) 3A CLR 250
1989 February 24
[SAVVIDES, J.]
IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION
NICOS PSATHRIS AND OTHERS,
Applicants,
v.
THE MINISTRY OF FINANCE,
THE COMMISIONER OF INCOME TAX,
Respondents.
(Case No. 322/87)
Executory act - Taxation - The collection and Assessment of Taxes Law.1978-79, section 20- Failure to file an objection within the time limited - Upon expiration of the time limit, the decision becomes executory - Objecting by using method unknown to the Law - Does not prevent the decision in question from becoming executory.
Executory act - confirmatory act - Re-examination of matter from the legal aspect only of the case - Does not. amount to a new inquiry resulting to a new executory decision.
The applicants were, at all material times, serving with the Ports Authority. Due to the manner in which the authority calculated the amount of income tax to be collected from the monthly salaries of the applicants, the applicants found themselves,. owing to the revenue substantial sums of income tax. The respondent Commissioner demanded payment with interest.
Instead of filing a written objection against the assessment raised by the Commissioner, the applicants protested through their trade unions, demanding equal treatment with public officers. Their case was eventually reconsidered, but only as far as the legal aspect of the case was concerned, namely whether interest was in law payable or not.
Finally, the Commissioner reached the same decision and demanded payment of the interest. Hence this recourse.
The principles applied by the Court, in dismissing the recourse, sufficiently appear in the hereinabove Headnotes.
Recourse dismissed. No order as to costs.
Cases referred to:
Christofides v. Republic (1971) 3 C.L.R 302
Razis and Another v. Republic (1979) 3 C.L.R. 127,
Spyridaki and Another v. Republic (1986) 3 C.L.R. 1935,
Papasavvas v. Electricity Authority of Cyprus (1986) 3 C.L. R. 2194.
Recourse.
Recourse against the refusal of the respondents to return or delete the interest imposed on and collected from applicants in respect of their income tax for the years 1977-1980.
A. papacharalambous, for the Applicants.
A. Evangelou. Senior Counsel of the Republic, for the Respondents.
Cur. adv. vult.
SAVVIDES, J. read the following judgment. The applicants, whose names appear on the attached appendix, challenge the decision of the respondents contained in their letter dated the 23rd February, 1987, whereby they refused to return or delete the interest imposed on and collected from the applicants in respect of their respective income tax for the vears 1977-1980.
Before the 30th September, 1977, the applicants were public officers, serving in the Department of Ports. On the 1st October, 1977, the applicants were transferred to the Ports
Authority of Cyprus (to be referred to as the Authority) on the basis of s.35 of the Cyprus Ports Organization Law (Law No. 38/73).
The applicants, besides their salaries, receive additional remuneration from overtime work with the Authority. Whilst in the service of the Department of Ports the applicants were not paving any interest on the balance of income tax due by them and assessed after the end of the year and, which was deducted from their salaries by monthly instalments. This was a standard practice for all public officers. After they were transferred to the Authority, the Authority used to deduct from their overtime allowances a standard sum for each pound they earned without actually calculating the exact amount of tax payable. The result was that the applicants owed substantial amounts of income tax in respect of their overtime work.
The applicants were assessed to income tax in respect of the years 1977-1980 and were notified accordingly by notices sent to them between 1979 and 1981. As it seems from a letter of the respondents to the Attorney-General's office dated the 12th June. 1986, the applicants objected through their trade unions to the mode of payment and the imposition of interest on the amounts due, after the expiry of the date fixed for payment on the notices. As a result the respondents informed the applicants by letter dated the 9th April 1980, that he consented to the payment of the amounts due b instalments but that he was not entitled to relieve them from the payment of interest thereon.
Following other subsequent meetings of the respondent Commissioner with the applicant's trade unions, the former sent another letter, on the 18th November, 1980, informing the applicants that instructions were given by him to the District Income Tax Offices to accept payment by instalments and to leave the matter of interest pending in view of the fact that certain matters concerning them were being discussed with the Government.
The applicants kept asking for relief from payment of interest and claiming that they should have the same treatment as public officers. The respondent Commission sought the advice of the Attorney-General's office, by letter dated the 12th
June. 1986, setting out his view, which was confirmed by letter of the Attorney-General's office dated the 21st July, 1986.
The applicants wrote, through their advocate, a letter to the Commissioner, dated the 10th February, 1987, requesting either:
(a) The return of interest on tax paid for the years of assessment 1977-1980, or
(b) Waiving of payment of such interest.
The applicants were informed by letter dated the 23rd February, 1987, that such interest could not be returned or waived "since it was imposed on the basis of section 42 of the Income Tax Laws, 1978 and 1979". (Obviously meaning the Assessment and Collection of Taxes Laws. 1978 to 1979).
It is evident from a subsequent letter of the respondents dated 27th March, 1987, addressed to the Income Tax Officers of Larnaca and Limassol that the matter was not settled by then, and that the Director-General of the Ministry of Finance decided to seek the advice of the Attorney-General's office once again. By letter dated the 4th 1987, the Attorney-General,s office advised, once again, that Public Officers are not exempted from the provisions of the Law and that interest was payable.
In the meantime, the present recourse was filed on the 24th April, 1987, challenging the decision contained in the letter of the 23rd February, 1987.
Counsel for applicant argued that the respondent acted contrary to the provisions of section 35(3) of Law 38/73 on the basis of which the applicants, who were public officers before their transfer to the Authority have a right to be treated as all other public officers, who pay their income tax by instalments without any interest.
Counsel for the respondent submitted that the sub judice decision is confirmatory of a previous one, the executory one being the assessments raised on the applicants, who neither objected to them within the prescribed period nor did the file a recourse within the time specified by Article 146 of the Constitution. He further argued that the applicants have no legitimate interest to file the recourse since they accepted the sub judice decision unreservedly and paid the tax due.
In respect of the substance of the case counsel for the respondents argued that the respondents acted properly on the basis of section 42(1) of the Assessment and Collection of Taxes Laws, 1978-1979, and that there is no room for the exercise of any discretionary power under the provisions of the said section.
Further counsel argued that the provisions of section 35(3) of The Ports Authority Law, No. 38/73. do not apply in cases of income tax which is not governed by the provisions of The Public Service Law but by an entirely different Law.
Before proceeding to the merits of the case I will consider first the objections raised by counsel for the respondents.
It is not disputed that the decision of the respondent to impose interest on the tax payable by the applicants was known to them at the time they received the assessments raised on them. The applicants, instead of objecting in the way prescribed by the Law (s.20 of the Assessment and Collection of Taxes Laws, 1948 to 1949), that is in writing within the time prescribed, protested orally, through their trade unions, on an unknown date and started negotiations between the trade unions, and the respondents as to the mode of payment of the taxes due and whether interest should be paid thereon. This method of objection is not in accordance with the provisions of the Law. The assessments became executory when the time prescribed by the Law for filing objections elapsed without any objections being filed. Although the respondents did in fact reconsider their decision in this respect this was done by way of concession after the original decision became executory.
Now coming to the reconsideration of the matter by the Commissioner, this was not done as a result of new material put forward by the applicants which was not known to the Commissioner at the time be took his original decision but was a reconsideration from the legal aspect of the case. This, according to our case law, does not amount to a new inquiry resulting to a. new executory decision. (See, in this respect, Christofides v. The Republic(1971). 3 C.L.R. 302; Razis and Another v, The Republic (1979)3 C.L.R.127, Spyridski and Another v. The Republic (1986) 3. C.LR. 1935; Papasavvas v. Electricity Authority of Cyprus (1986) 3 C.L.R. 2194). As a result the decision contained in the letter dated the 23rd February,.1987, which is the one challenged by the present recourse, is not an executory but a. confirmatory one Since this recourse has: been filed a long time after the executory decision, that is the assessments of income tax raised on the applicants, it is out of time and cannot be entertained and. must be dismissed in view of my finding as above I find it unnecessary to examine the other issues raised.
In the result this recourse fails and it is hereby dismissed with no order for costs.
Recourse dismissed No order as
to costs.
APPENDIX
1. Nicos Psatharis
2. Panaylotis Elia
3 Anastasis Charalambous
4. Andreas Louca
5. Demetris Tabakis
6. Anthimos Gavriel
7. Elias Andreou
8. Vasos Petrides
9. Theocharis Theocharous
10. Panayiotis Antoniou
11. Stefanos Sortini
12. Georghios Mikellides
13. Christakis Hambou
14. Christakis Diakos
15. Andreas Georghiades
16. Georghios Hadjioudis.