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Commissioner of Inland Revenue v Wendt [1991] FJHC 36; Haa0076.90s (26 April 1991)

IN THE HIGH COURT OF FIJI
APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 76 OF 1990

Between:

COMMISSIONER OF INLAND REVENUE
Appellant

And

EDMUND ALLEN WENDT
Respondent

Ms N. Shameem for the Appellant
Mr I. Fa for the Respondent

JUDGMENT

In this case the respondent was charged in the Magistrates Court of Suva on 3 counts of having failed to deliver to the Commissioner of Inland Revenue on or about the 29^th of February 1988 and on other days between that date and 10^th of April 1989 (1) return of income for 1986 (2) statement of assets and liabilities in respect of that year and (3) analysis of drawings account in respect of that year as demanded by the Commissioner of Inland Revenue by letter dated 28^th January 1988 contrary to section 50(1) and 96(1) of the Income Tax Act (Cap. 201).

The respondent pleaded guilty and after adjournments for compliance the learned Magistrate convicted him on 31^st January 1990 and discharged him on condition that he does not re-offend for 3 months and ordered him to pay $35.00 as costs.

The Commissioner of Inland Revenue has appealed on the grounds that the learned Magistrate has erred in law by discharging the accused whereas he should properly have convicted him and sentenced him under section 206(2) of the Criminal Procedure Code. The appellant also complains that the punishment is grossly inadequate.

It seems to me that Section 44 of the Penal Code under which the learned Magistrate presumably acted is wide enough to cover all cases whatever provided all circumstances including the nature of the offence and the character of the accused are apposite for an order under that section.

Are the circumstances and nature of the offence in this case such as to permit the invocation of section 44 of the Penal Code? There may well arise situations where there has been a technical or trivial non-compliance with the requirements of legal provisions. Can the omission of the respondent in the instant case be regarded as such?

The respondent had refused and/or neglected to send the required returns to the Commissioner of Inland Revenue for 1 year and 2 months before the charges were laid against him. He did not comply even at that stage. According to the file he had complied only on 31^st January 1990 i.e. over 2 ½ years later. I can find nothing in mitigation or any extenuating factors. If taxpayers like the respondent adopt this lethargic and lackadaisical - if not defiant - attitude towards the tax collecting authorities serious repercussions would occur to revenue. In my view this is not a case for the application of Section 44 of the Penal Code.

It is useful to recall what Hammett CJ said in regard to the parallel provision in the earlier Act and a delay of 53 days in Attorney-General v Hari Chand (14 FLR 245 at 246):

“The maximum fine prescribed by the legislature for this offence is £20 a day for each day during which default continues which for a 53 day default amounts to more than £1000. This is a clear indication of the gravity with which the offence is regarded by the legislature offending, as it does, the uniform collection of one of the government’s main sources of revenue, namely income tax. A wide discretion is left to the court in imposing the penalty for such offences. In the exercise of its discretion the court must of course have due regard to the means of the offender but the penalty imposed must also have some reasonable bearing on the gravity of the offence.”

The emphasis is mine.

It has to be emphasized that the instant offence is a continuing offence and a daily fine of $40.00 is prescribed by statute in Section 96(1) of the Income Tax Act.

It appears that this type of offence is on the increase judging by the number of cases that come up before this court. A deterrent sentence is therefore called for. However I have taken into consideration that over one year has elapsed since the date of the order which may have lulled the respondent into some sort of security that he will not be again ordered to pay. I also note that the respondent’s default has been only in respect of one income tax year, 1986.

In any case although his lapse covers a period of 1 year and 2 months I confine the penal period to 6 months from the date of laying of the charges in view of Section 219 of the Criminal Procedure Code. This was so decided by Grant ACJ in Mohammed Hakim Dean v Reginam (19 F.L.R. 158).

Taking all the circumstances into consideration therefore I set aside the order of the learned Magistrate and impose on the respondent a fine of 50 cents per day for 180 days i.e. $90.00 on each of the 3 counts in default 2 weeks’ imprisonment on each count. The respondent will therefore pay $270.00 on all 3 counts. I also order him to pay $50.00 as costs in default 2 weeks’ imprisonment. I give the respondent one month from today to pay the fines and costs.

The appeal is allowed.

M. D. Jesuratnam
JUDGE

At Suva
26^th April, 1991.

HAA0076.90S