090-NLR-NLR-V-63-R.-G.-W.-NILAWEERA-Appellant-and-COMMISSIONER-OF-INLAND-REVENUE-Respondent.pdf
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Niiaweera v. Commissioner of Inland Revenue
Present : Gunasekara, J.
R.G. W. NILAWEERA, Appellant, and COMMISSIONER
OF INLAND REVENUE, Respondent
S.G. 1SS—Application in Revision in M. G. Badutta, 25321
Income tax—Proceedings for recovery of tax before Magistrate—Certificate ofCommissioner—Evidential value thereof—Right of alleged defaulter to showthat he was not duly assessed—Income Tax Ordinance (Cap. 188 of LegislativeEnactments, 1938 ed.), ss. 65, 80.
In proceedings taken under section 80 of the Income Tax Ordinance for therecovery of income tax it is open to the Magistrate to consider whether theassessment was time-barred. The provisions of subsections (1) and (2) ofsection 80 do not have the effect of preventing an alleged defaulter fromsatisfying the Magistrate that he was not duly assessed.
Application to revise an order of the Magistrate’s Court, Badulla.
G. E. Ghitty, Q.C., with E. A• G. de Silva, for Petitioner.
M.Kanagasunderam, Crown Counsel, for Respondent.
Cur. adv. vult.
486
GXJNASEKARA, J.—Nilaxoeera v. Commissioner of Inland Revenue
January 8, 1962. GmsTASEKAKA, J.—
This is an application for the revision of an order made by theMagistrate of Badulla under the Income Tax Ordinance, directing thata sum of Rs. 1015, alleged to be tax in default, be recovered as a fineimposed on the petitioner and sentencing him to simple imprisonmentfor 3 months in default of payment of this sum as a fine.
The order was made in proceedings that were taken upon a certificatedated the 11th April 1960, which was issued by an assistant commissionerof inland revenue in terms of section 80 (1) of the Income Tax Ordinance,Cap. 188 of the 1938 edition of the Legislative Enactments.1 (In orderto avoid confusion I shall refer to the Ordinance as it appears in thisedition of the Enactments.) The certificate stated that the petitionerhad made default in the payment of Rs. 1015, being income tax duefrom him, and gave particulars of this amount. It consisted of theamount of an additional assessment of the tax for the year 1952-53and a penalty for non-payment. The petitioner maintained that theassessment was time-barred, inasmuch as it was not made within thetime prescribed by section 65, and was therefore invalid, and thatconsequently there was no tax in default. The learned magistrateheld that it wrs not open to him to investigate this defence and thatin any event the assessment was not time-barred. He said :
I do not think that it is open to me to initiate an inquiry as towhether the claim in question is time-barred or not as this will involveme in a reconsideration of matter which should have been consideredby the Commissioner of Inland Revenue. The assessment in theinstant case appears to me in any event to have been made within3 years and it is not time-barred. I therefore hold that the defaulterhas not showed sufficient cause why further proceedings for therecovery of tax should not be taken against him.
The learned magistrate’s view that it was not open to him to considerwhether the assessment was time-barred is based on the proviso tosection 80 (1), where it is enacted that nothing in that section shallauthorize or require the magistrate in any proceeding thereunder toconsider, examine or decide the correctness of any statement in thecertificate. The matters that are required to be stated in the certificateare the particulars of the tax in default that is sought to be recoveredand the name and last known place of business or residence of thedefaulter. These statements would assume that the alleged defaulterhas been duly assessed to income tax, but there is nothing in the provisoto prevent him from proving that the assumption is incorrect. Thereal purpose of the proviso, as was pointed out by Gratiaen, J. in deSilva v. The Commissioner of Income Tax2, is to prevent a defaulterwho has been duly assessed to income tax for which he is properly
1 Section 85 (1) of Cap. 242 of the 1956 edition.
* (1951) 53 N. It. R. 280 at 282.
Marthelis Pererd v. Jayasekera
487
chargeable from re-agitating, in the coarse of proceedings taken tindersection 80 (1) for the recovery of such tax, the correctness of theassessments served on him. Subsection (2) of the section providesthat in any proceeding under subsection (I) the Commissioner’scertificate shall be sufficient evidence that the tax has been duly assessedand is in default. It must be noted that the certificate is to be merelysufficient, and not conclusive, evidence of these facts. Moreover, theprovision that it shall be evidence connotes that an issue as to whetherthe tax has been duly assessed can arise for decision in such a proceeding.With respeot, I agree with the view taken in de Silva’s case (supra) thatthe provisions of these subsections do not have the effect of preventingan alleged defaulter from satisfying the magistrate that he was notduly assessed.
The learned magistrate’s finding that in any event the assessmentwas not time-barred is not based on any evidence but on a statementmade by the Commissioner’s counsel that the assessment in questionwas made on the 26th March 1955.
In my opinion the petitioner is entitled to be given an opportunityof satisfying the magistrate that he was not duly assessed. I set asidethe order made by the magistrate and direct that the case be remittedto the Magistrate’s Court so that the petitioner may be given such anopportunity.
Order set aside.