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Prasad v Commissioner of Inland Revenue [1997] FJHC 190; HAA0074D.1997S (28 November 1997)

IN THE HIGH COURT OF FIJI
AT SUVA
APPELLATE JURISDICTION

CRIMINAL APPEAL NO. HAA0074 OF 1997

Between:

DIVEN PRASAD
Appellant

And:

COMMISSIONER OF INLAND REVENUE
Respondent

Counsel: Mr S Chandra for Appellant
Mr I Blakeley for Respondent

Hearing: 28th November 1997

Decision: 28th November 1997

ORAL DECISION OF PAIN J

This is an appeal against sentence.

The Appellant pleaded guilty in the Magistrate’s Court to fourteen (14) charges of failing to furnish VAT returns on due date. The period of default was said to range from 13 months to 2 months. The learned Magistrate imposed fines on a monthly basis ranging from $80.00 to $50.00 for each month of default. However. for some reason, he sentenced the appellant on counts 1 to 12 only. No penalty was imposed in respect of counts 13 and 14. The total fines imposed on counts 1 to 12 was $6,370.00. The Appellant appeals against those fines.

The principles to be applied for sentencing in these cases were considered by me in Commissioner of Inland Revenue v Baljit Singh & Sons Ltd. (Appeal No. 54 of 1994). Other High Court decisions of relevance are Commissioner of Inland Revenue v Automart Ltd. (Sadal J, Criminal Appeal No.4 of 1994 at Lautoka) and Comissioner of Inland Revenue v Bula Investments Ltd. (Lyons J, Criminal Appeal No. 14 of 1994 at Lautoka).

I do not intend to repeat what has been said in those cases. It is abundantly clear in this case that an adequate summary of facts was not given to the learned Magistrate and the learned Magistrate did not make sufficient inquiry himself before imposing the fines. In the light of the principles in the cases I have mentioned, the fines in this case are manifestly excessive. That is properly conceded by Counsel for the Respondent.

With the agreement of both Counsel, I have been given details of the facts of this offending and heard submissions in mitigation. Rather than remit the case back to the Magistrate’s court for sentence, I will impose the fines that ought to have been imposed in that Court.

I deal only with Counts 1 to 12. The Petition of Appeal is only in respect of those counts.

There are some relatively serious aspects to this case. The period of default is substantial. The appellant did not heed the warnings and default assessments. One return was filed during the first 12 months of trading. The appellant must have had some knowledge of his obligations. Significantly, that sole return although late, was for a refund of $2,000.00 that was duly paid.

However, the business of the appellant is not substantial. Gross turnover is only in the region of $37,000.00 per annum with net earnings being considerably less. The appellant had just commenced operating his first business. On average, his VAT payments are only $100.00 per month. All tax had been paid prior to the appellant being sentenced. As is often the case, he blames his Accountant for not attending to the matter, but this does not absolve him of his responsibility.

In fixing the penalty, I agree with Lyons J. in Commissioner of Inland Revenue and Bula Investments (Supra) that $50.00 per month is generally a satisfactory starting point. However, each case must be determined on its own facts and consideration must be given to the totality principle. The fines imposed must be appropriate for the total criminality represented by all offences. As Counsel for the Appellant said the sentence must be to penalise and not to financially cripple the offender.

The periods of default on the 12 charges range from 15 months on count 1 to 4 months on count 2. The default on these counts does not range from 13 months to 2 months as calculated by the learned Magistrate. Both Counsel agree that the default periods range from 15 months to 4 months.

I intend to impose a sentence on this basis which is an increase in the periods of default found by the learned Magistrate. These periods of default in each case are for the period from the day after the return was due (namely the first day of the appropriate month) until the filing of the information in the Magistrate’s Court. It has not been argued or determined whether the period of default in this case should more appropriately be calculated until the actual filing of the returns in September 1994. That issue is left open.

Finally, on count 3, for which a return was filed in August 1993 the period of default should only be for 2 months.

Having regard to all the factors I have mentioned, the fines in this case must be substantially reduced. However, this persistent default over a long period must still attract a penalty that properly reflects the intention of the Legislature.

A fine of $25.00 per month will be imposed for each month of default in respect of each charge. According to my calculation, that will reduce the total fines to $2,575.00.

The costs awarded are quite substantial but I see no reason to interfere.

Accordingly, the appeal is allowed. The fines imposed in the Magistrate’s court are quashed and in substitution therefore, the following fines are imposed:

The order for payment of costs of $180.00 is confirmed.

The cost of $180.00 are be paid within 14 days. The total fines of $2,575.00 at be paid by instalments of not less than $430.00 per calender month, the first payment due in one month’s time.

JUSTICE D B PAIN