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Lochan v Comptroller of Fiji Islands Revenue and Customs Authority [2013] FJCOR 1; Income Tax Appeal 10.2009 (16 January 2013)

IN THE COURT OF REVIEW
AT SUVA


INCOME TAX APPEAL NUMBER: 10 OF 2009


BETWEEN:


ROHAN LOCHAN
APPELLANT


AND:


COMPTROLLER OF FIJI ISLANDS REVENUE AND CUSTOMS AUTHORITY
RESPONDENT


Appearances: Mr. Nilesh Prasad and Mr. Amani Bale for the Appellant.
Ms. T. Rayawa for the Respondent.
Date / Place of Judgment: Wednesday 16 January, 2013 at Suva.


Coram: The Hon. Justice Anjala Wati.


RULING
(Striking Out)


CATCHWORDS:
COURT OF REVIEW – JURISDICTION TO HEAR APPEALS- DECISIONS FROM WHCH APPEALS MAY BE HEARD.


LEGISLATION:


The Customs Act Cap. 196 Rev. 2009 ("CA").


The Cause


  1. The respondent applies to have the appellant's appeal struck out pursuant to order 18 rule 18(1) (d) of the HCR.
  2. The respondent contends that the Court of Review does not have jurisdiction to hear the appeal and the appeal machinery is an abuse of the process of the Court.

The Appeal


  1. The appellant's appeal is against the decision of the Comptroller of Customs and Excise of 27 November 2009 where the Comptroller condemned the goods belonging to the appellant under s. 157(2) of the CA. The appellant is asking for the orders of the Comptroller to be revised or set aside on the grounds that:-

The Injunction


  1. On 4 December 2009 the appellant obtained an ex-parte order against the respondent by which the respondent was restrained by itself, its officers, servants, or agents or otherwise howsoever from condemning and selling or disposing new electrical and household goods belonging to the appellant until the determination of the appeal.

Grounds/Submissions


  1. Ms. Rayawa, appearing for the respondent set out the background of the case and raised issues of law to support her case for striking out. She stated that this case is about sale of condemned goods which were detained and seized from Pacific Tools Trading Co. Ltd. from Main Street, Nadi Town and from the residence of one Rajendra Kumar of Nasau Sigatoka on or about 3 December 2008. The notice of detention was served at Nasau, Sigatoka and Pacific Tools Trading shop in Nadi.
  2. The respondent then issued a notice of seizure against the appellant on or about 10 June 2009 which was sent to the former solicitors namely Samusamuvodre & Sharma of Sigatoka and also by registered mail to address PO Box 1442, Castle Hill, NSW 1765, Australia.
  3. Under s.157 (1) of the CA the owner of the goods must within a period of 3 months lodge a notice of claim in writing with the Comptroller of Customs claiming the goods. The appellant did not do so at anytime and has still not done the same till today.
  4. Under s. 157(2), upon expiry of 3 months, any seized goods are deemed condemned to the State and is placed on public sale to recoup any duties and/or liabilities owed to the State. The Comptroller had notified the appellant of this and of its intention to place the goods on public sale to redeem the outstanding duty and liabilities owed by the appellant to the State. The appellant then instituted this proceeding in its attempt to stop the sale and in order to discuss further with the respondent on the payment of the outstanding duty and liabilities.
  5. Ms. Rayawa argued that the appellant has instituted these proceedings in the High Court sitting as the Court of Review under Part 23 of the CA. Part 23 states that the decisions which are amenable to appeal is listed in the schedule of the CA. She contended that the appellant's appeal does not contain any ground which can be constituted as a prescribed decision. She stated that in its amended notice of appeal at paragraph 1, the appellant based its appeal on Part (iii) of the schedule, that is, on the penalty imposed by the Comptroller under s.137A. However, the appellant was never charged under s. 137A so there cannot be appeal under the said section for any penalty imposed.
  6. Ms. Rayawa also stated that the appellant has requested that this case be compounded with the Comptroller of Customs under s.155 of the CA. The Comptroller had agreed to the compounding of the offences. The respondent had sent the appellant the penalties and duty liability payable to the State. The appellant is now prohibited under s. 155(e) from appealing against the orders of the Comptroller after asking for a settlement of the case.
  7. Ms. Rayawa argued that as a result, the Court of Review does not have any jurisdiction to hear the appeal in its current form. The proper procedure for the appellant was to have filed a judicial review. The appeal is an abuse of the process of the Court and must be struck out without being dealt with.
  8. In respect of the issue of the Courts jurisdiction to hear the appeal Mr. Prasad did not contradict Ms. Rayawa's submission that Schedule 1 specifies the decisions from which the Court of Review has jurisdiction to hear appeals from. His argument however was qualified in two folds. He first submitted that the Court must start by analysing the word "may" in the title of the schedule of the CA which reads "Matters in respect of which appeals may be heard by the Court of Review". Mr. Prasad stated that the use of the word "may" gives the Court a very wide discretion in determining whether or not to hear any kind of appeal brought before it. Mr. Prasad argued that he is fortified in his view when he looks at s. 174 which actually authorises the Court of Review to hear appeals as assigned under the provisions of the CA. He argued that the Court of Review has powers to hear appeals under s. 94 (2) (a) as well. Mr. Prasad argued that s. 94(2) in particular envisages a wide variety of disputes between an importer of goods and the Comptroller to be decided by Court of Review. This section, he argued, provides jurisdiction and the appropriate procedure and remedy for the resolution of the appellant's appeal.
  9. In opposing the argument that this case ought to be properly brought as a judicial review, Mr. Prasad submitted that the Court of Review is a creature of the legislature constituted to deal with specialist tax and customs law matters. It is a more convenient and easily accessible forum for determination of the various breaches by the respondent. If other means of redress are conveniently and effectively available to a party, it ought ordinarily to be used before judicial review is resorted to. This is the reason why he chose to appeal the decision of the Comptroller instead of applying for judicial review.
  10. On s.137A, Mr. Prasad argued that s.137A was an "amendment" to the Act by Customs (Amendment) Act 1998 (Act No. 57 of 1998). Mr. Prasad submitted that the appellant was charged under s. 137(c) and (d). The meaning and effect of section 137(c) and (d) and 137A are the one and the same. Both provisions have a common intention of targeting importers who provide wrong statements or documents to the Customs Department. The appeal thus does fall under s.137A.
  11. Mr. Prasad also argued that he has a meritorious appeal as specified in the grounds and thus the application for striking out must be dismissed.

The Law and analysis


  1. In order to decide the application to strike out I need to decide certain questions that the parties require the Court to determine.
  2. The first is whether I have the jurisdiction to hear the appeal.
  3. The Court is dealing with this matter as a Court of Review established under s.174 of the CA. S. 174 in effect states the nature of cases that the Court of Review has jurisdiction to hear:-

"The Minister may on the recommendation of the Judicial Service Commission appoint a person of legal knowledge and substantial experience for the purpose of hearing and determining appeals from the decisions of the Comptroller upon any of the matters specified in the Schedule, for dealing with other matters as are assigned to the said person under the provisions of the Act, the Customs Tariff Act 1986 and the Excise Act 198 and the person so appointed shall hold a court to be called the Court of Review, and the said Court of Review shall, for the purpose of hearing and determining the appeals under the Act referred to it, have powers and authority similar to those vested in the High Court as if such appeal were an action between the appellant and the Comptroller".


  1. S. 174 makes it very clear that the Court of Review has jurisdiction to hear appeals from decisions specified in the schedule, from any authorised provisions of the CA, and from any provisions authorised by the Customs Tariff Act 1986 and the Excise Act 1986.
  2. From the parties' submissions, I only need to analyse whether this is an appeal which is prescribed by the Schedule or s. 94. There are no other provisions brought to my attention under which this appeal could possibly fall under.
  3. Let me examine the Schedule first. It reads:-

"Schedule


(Section 174)


Matters in respect of which appeals may be heard by the Court of Review.


Decisions of the Comptroller on –


(i) The interpretation of the customs tariff;

(ii) The classification of goods under the customs tariff;

(iii) Any penalty imposed under s.137A;

(iv) Any amended assessment imposed under section 101A;

(v) The Water Tax Promulgation 2008".
  1. I will need to revisit the grounds of appeal to see whether it can be constituted as a prescribed decision. Before I do that, I must say that Mr. Prasad's reading of the word "may" in the heading is not correct. The use of the word "may" does not import extraneous decisions other than that prescribed under the schedule. The word "may" is confined to decisions expressly stated by the statute.
  2. Ground 1 states that "The Comptroller erred in law by construing the appellant to be the owner of the goods under s.137A of the Act when the title in the goods had passed to Rajend Kumar trading as Pacific Tools Trading upon deliver". This ground complains that the Comptroller is wrong in construing the appellant as the owner. The complaint is not against any penalty imposed under s.137A. The ground thus is not an appeal against the prescribed decisions.
  3. The complaint in ground 2 is that "the Comptroller erred in law in failing to comply with s.155(4) of the Act when he proceeded to obtain a plea from the appellant in respect of the alleged charges in light of the penalty notice under s.137A(1). I find the appellant to be complaining of improper use of the compounding procedure by the Comptroller under s. 155 when such is not allowed by s. 155(4). This is not an appeal against penalty imposed under s.137A.
  4. Grounds 3 to 5 reads:-
  5. I find that grounds 3 to 5 complains that the Comptroller acted outside the requisite procedure and that it did not comply with the legislated procedure. The complaints in the grounds do not fall under any of the decisions mentioned in the schedule.
  6. I therefore find that the appeal does not fall within the prescribed decision under the Schedule.
  7. I agree with Mr. Prasad that s. 94 (2) (a) of the CA also gives the Court of Review jurisdiction to hear appeals but I do not agree with Mr. Prasad that the section is of any assistance to him. s. 94 (2) is a provision which allows for appeals against duties already paid. S. 94 (2) (a) allows for appeal to the Court of Review, if the dispute relates to the decision of the Comptroller, upon any of the matters specified in the schedule, within 3 months after the date of payment of the duty. S. 94 (2) (b) allows for appeal in any other case, in any Court of competent jurisdiction, within 3 months after the date of payment of the duty, for the recovery of the whole or any part of the sum paid.
  8. There is no duty paid in this case and so the jurisdiction of the Court of Review under s. 94 (2) (a) cannot be invoked.
  9. Mr. Prasad argued that in a nutshell the charges in s. 137(c) and (d) and s.137A are the same. It is true that the appellant was not charged under s. 137A but under s. 137 (c) and (d). The question is not about the similarity of these sections as Mr. Prasad makes it out. It is about challenging the decision against the penalty imposed under s.137A. Firstly, there is no penalty imposed under s. 137A and secondly, none of grounds is complaining against any penalty imposed under s. 137A. Where then does the Court of Review get a prescribed power to hear the issues on the appeal? I find that there is no provision.
  10. I must also look at s. 155. Much has been said about this section. The sections states that comptroller has powers to settle the case and order such person to pay the penalties. The Comptroller can only exercise his powers if the person had admitted the offence and requests for a settlement. The Comptroller has the powers to make an order for the penalty payable and when that power is exercised, s. 155(e) states that such order is final and not subject to appeal. It is prudent that I recite the section in full:-

"155(1) Subject to such procedure as may be prescribed, the Comptroller may, where he or she is satisfied that a person has committed an offence against this Act in respect of which a pecuniary penalty is provided or in respect of which any goods are liable for forfeiture, compound such offence and may order such person to pay such sum of money, not exceeding the maximum amount of the pecuniary penalty to which such person would have been liable if he or she had been prosecuted and convicted for the offence, as he or she may think fit, and he or she may order any goods liable to forfeiture in connection therewith to be condemned;


Provided that the Comptroller shall not exercise his or her powers under the provisions of this section unless such person in writing admits that he or she had committed the offence and requests the Comptroller to deal with such offence under the provisions of this section.


(2) Where the Comptroller makes an order under the provisions of subsection (1) then-


(a) Such order shall be put in writing and shall have attached to it the request to the Comptroller to deal with the matter;


(b) Such order shall specify the offence which such person committed and the penalty imposed by the Comptroller;


(c) A copy of such order shall be given to such person if he or she so requests;


(d) The person against whom this order is made shall not be liable to any further proceedings or prosecution in respect of the offence, and if he or she is in custody he or she shall be discharged;


(e) Such order shall be final and shall not be subject to appeal; and


(f) If the sum of money so ordered to be paid or any part thereof is not paid, it shall be lawful for the Comptroller to a send a copy of his or her order to a court of competent jurisdiction which shall thereupon make an order for enforcement thereof in the same manner as if the penalty had been imposed by the court.


(3)...


(4) This section does not apply to any offence based on a statement which has been the subject of a penalty notice under section 137A (1)".


  1. On 11 August 2009, the applicant had written to the respondent and entered a plea of guilty and requested for a settlement of his case. He stated that the plea is based on commercial reasons. The offences were compounded by the Comptroller on 8 October 2009. The effect of the settlement is that the appellant is barred under s. 155 (e) from appealing the orders. Section 155(4) states that s. 155 does not apply to any offence based on a statement which has been the subject of a penalty notice under s. 137A(1). I have perused the charges and I find that none of penalty was issued under s. 137A(1) so the appellant is faced with another statutory bar under s. 155(e) from appealing the decision of the Comptroller.
  2. This is not a proper case where the statute allows for appeal. The machinery is improperly used. In light of this decision, Mr. Prasad's argument on appeal being an alternative convenient procedure to that of judicial review is not applicable and need not be considered any further.

Costs


  1. This is a matter which should not have ended up in the Court of Review in its current form. The question of jurisdiction was from the outset very clear. The respondent has been put to expense of preparing affidavits and submissions to have the interlocutory application argued. It is thus entitled to its costs.
  2. I must say that there were court appearances, filing of affidavits and submissions which all involved costs.

Final Orders


  1. I find that the Court of Review does not have jurisdiction to hear the appeal filed by the appellant and as such it will not hear the same.
  2. The respondent shall have costs of the proceedings summarily assessed in the sum of $550.00.
  3. The injunctive orders are thus dismissed.
  4. Ordered accordingly.

Anjala Wati
Judge
16.01.2013

__________________________________________
To:

  1. Mr. Nilesh Prasad & Mr. Amani Bale, solicitors for the appellant.
  2. Ms. T. Rayawa, solicitor for the respondent.
  3. File: Suva Income Tax Appeal No. 10 of 2009.

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