[ZEKIA, P., VASSILIADES, TRIANTAFYLLIDES, MUNIR, JOSEPHIDES, JJ.] IN T H E MATTER OF ARTICLE 146 OF T H E CONSTITUTION SOFOCLES SOFOCLES DEMETRIADES, Applicant, and 1. T H E GREEK COMMUNAL CHAMBER, 2.

Article 87

.1 (

1. f)of the Constitution) but income tax, and that such mode of taxation, therefore, being outside the competence of a Communal Chamber under Article 87.\(
2. f)is unconstitutional; (
3. ii)that paragraph 1 of Article 24 and Article 28 of 608 the Constitution have been contravened in that under Law 18/62 the contributions towards meeting part of the expenditure in question in the 1962BudgetoftheGreekCommunalChamber are made, not in accordance with the total means of each of the members of the Greek community, but onlyonthebasisofoneaspectofsuchmeans, namely, income and that a discrimination (

Article 28

) has thus been made between persons who earn "income" (as defined in Law 18/62)and thosewho do not earn such "income"; (/•») that Law 18/62,ineffect, amountsto the imposition of taxation retrospectively, contrary to paragraph 3 of Article 24, in that during 1962 some of the members of the Greek Community are taxed with reference to their income, from emoluments in 1962 and their income, from other sources, backto

1. Counsel for Applicant also submitted that the provisions inparagraph 5oftheSecond Scheduleto Law 18/62,whereby co-operative societies were placed in a privileged position regardingthepayment ofthetaxinquestion under Law 18/62 also contravened the principle of equality laid down in Article 28 of the Constitution and, in contravention of that Article, discriminated in favour of co-operative societies. This point does not, however, appear to have been pressed by counsel for Applicant and it is not, therefore, considered necessary to deal with this specific point in thisjudgment. As, to the amount of the assessment itself, counsel for Applicant has stated at the outset, and in the circumstances quite rightly soin our opinion, that there isnodispute inthis Case as regards the actual amount with which the Applicant has been assessed but only as regards the constitutionality of the legislative provisions under which such assessment has been made. Before dealing specifically with the above-mentioned three grounds on which counsel for Applicant has submitted that Law 18/62 is unconstitutional, the Court will first deal with a general submission which has been made by counsel for Applicant and which appears to be common to all the above mentioned three specific grounds, namely, that the facts and circumstances of this Case, which concerns Law 18/62, 609 1965 Oct. 12, 20 Dec.9 SOFOCLES DEMETRIADES and
2. THE GREEK COMMUNAL CHAMBER,
3. THE REPUBLIC OF CYPRUS THROUGH THE MINISTER OF FINANCE 1965 Oct. 12,20 Dec. 9 SOFOCLES DEMETRIADES and
4. T H E G R E E K COMMUNAL CHAMBER,
5. T H E REPUBLIC OF CYPRUS T H R O U G H THE MINISTER OF FINANCE should be distinguished from the facts and circumstances of the case of In re. Tax CollectionLaw No. 31 of 1962 and Hji Kyriacos & Sons Ltd., 5 R.S.C.C. 22 (hereinafter referred to as "the Hji Kyriacos Case") which concerned Law 16 of 1961 of the Greek Communal Chamber. The Court has given careful consideration to this submission and has come to the conclusion that, although it is true that Law 18/62 may differ in form and detail from the said Law 16 of 1961, the two Laws are so similar in substance and in all material particulars as regards the method and type of tax imposed as to make the principles and statements of law contained in the Decision of the Supreme Constitutional Court in the Hji Kyriacos Case also applicable to the Case now under consideration. The Court has considered the said Decision of the Supreme Constitutional Court and, to the extent to which the issues of constitutionality which have been raised in this Case are the same as those raised and decided in the Hji Kyriacos Case, the Court sees no reason for differing from the opinions expressed and conclusions reached in the Hji Kyriacos Case. Further reference will be made in this judgment to specific opinions which have been expressed in the Hji Kyriacos Case when the particular points of constitutionality raised in this Case are dealt with specifically. The Court will now deal with the above-mentioned specific grounds on which counsel for Applicant has submitted that Law 18/62 contravenes the Constitution, and with the counter submissions which have been madein reply thereto by counsel for both Respondents. These specific issues may be dealt with as follows;— (/) Alleged contravention of Articles 87.1(/) aw/88.1 of the Constitution by Law 18/62:— The relevant part of Article 87 reads as follows:— " 1 . The Communal Chambers shall, in relation to their respective Community, have competence to exercise within the limits of this Constitution and subject to paragraph 3 of this Article, legislative power solely with regard to the following matters:— (/) imposition of personal taxes and fees on members of their respective Community in order to provide for their respective needs and for the needs of 610 bodies and institutions under their control as in Article 88 provided; The relevant part of Article 88 reads as follows:— " 1 . The power of imposing taxes under sub-paragraph {f) of paragraph 1of Article 87 of a CommunalChamber shall be exercised for the purposes of meeting the part of its expenditure provided in its budget in each financial year which is not met by the payment made to such Communal Chamber in respect of such financial year by the Republic out of its Budget as provided in para­ graph 2 of this Article or by any other revenue which such Chamber may have in that financial year". The Court must now consider the precise meaning to be given to theterm "personal taxes" which occurs inthe English text of paragraph \{f) of Article 87 of the Constitution. In Hji Kyriacos Case the Court held, for the reasons given by it in its Decision (p.27), that "the expression 'προσωπικών εισφορών' in the Greek text should be understood in a wide sense, as corresponding to the expression 'personal taxes' and not in the sense in which the expression 'εισφορά'isused in Article 24.2 as denoting 'rate'", and this Court sees no reason to differ from that conclusion or from the reasoning on which it is based. Having thus decided that the termused in Article
6. \{f) of the Constitution does in fact mean "personal taxes" the question which next falls for-determination is whether the particular form of taxation which has been imposed by Law 18/62 amounts to the imposition of "personal taxes",

Article 87

.1 (

1. f)of the Constitution, or whether it amounts to some form of taxation other than the imposition of "personal taxes" in the said sense. In this connection the Court agrees with the submission made on behalf of the Republic that both incometax, and the method of taxation, based on income,which has been adopted by Law 18/62, are "personal taxes" in the sense that they are not taxes imposed on property or things (e.g. immovable property tax) but are taxes imposed on person directly. Also, as has been pointed out, income tax and the form of taxation, based on income, imposed by Law 18/62, are also personal taxes in the sense that they are "direct taxation" as distinct 611 1965 Oct. 12, 20 Dec. 9 SOFOCLES DEMETRIADES and 1. T H E GREEK COMMUNAL CHAMBER, 2. T H E REPUBLIC OF CYPRUS THROUGH THE MINISTER OF FINANCE 1965 Oct. 12,20 Dec. 9 SOFOCLES DEMETRIADES and 1. T H E G R E E K COMMUNAL CHAMBER, 2. T H E REPUBLIC OF C Y P R U S T H R O U G H THE MINISTER OF FINANCE from "indirect taxation" (e.g. tax or excise imposed on commodities such as cigarettes, beer, etc.). In support of this argument the Court has been referred to various authorities, including the book on "Principles of Public Finance" by Hugh Dalton (a former Chancellor of the Exchequer of Great Britain), 4th Edition, pp. 26-27 and a Decision (No. 597) of the Greek Council of State, which is reported in the 1951 volume of Svolos and Vlachos, volume 1p. 224. This same issuewasconsidered and decided by the Supreme Constitutional Court in Hji Kyriacos Case with regard to the form of tax, which was likewise based on income, which had been imposed by Law 16/1961 of the Greek Communal Chamber. In that case (at p. 27) the Court expressed the following opinion:— "It is, indeed, clear from the whole of the provisions of the Annex to Law 16/61 that the 'tax' referred to in section 3 of such Law is a tax imposed on the basis of income. Such tax, however, by its very nature is a personal tax and is one of the most usual and universally recognized modes of personal taxation and theCourt is, therefore, of the opinion that it is not contrary to, or inconsistent with, the provisions of paragraph 1(
2. f)of Article 87". This Court agrees with the above opinion and isof the view that it applies equally to the tax imposed by Law 18/62 as it does to the tax imposed by its predecessor, Law 16of 1961. As regards the requirements of Article 87.\{
3. f)that the imposition of such personal taxes and fees must be for the purpose of providing for the respective needs of the Communal Chamber and for the needs of the bodies and institutions under the control of the Communal Chamber, and the question of whether or not such "needs", as budgeted for by the Communal Chamber in respect of the year in question, are reasonable, this point has not been fully argued before the Court in this Case and the Court does not consider it necessary, for the purpose of this judgment, to dwell upon this point. Likewise, with regard to the alleged contravention by Law 18/62 of Article 88.1,the Supreme Constitutional Court also considered a similar issue, which had been raised in the Hji Kyriacos Case in connection with Law 16 of 1961 of the 612 Greek Communal Chamber, and came to the conclusion (vide page 28, letter G) that what was done in that case was "both within the letter and spirit of paragraph 1 of Article 88". The reasoning on which this conclusion was based, and which need not be repeated here, is set out in full in the passages of the Court's Decision which commence between letters F and G on page 27and which end at letter G on p.28. Here again this Court agrees with this conclusion, and the reasoning on which it is based, and considers that it applies equally to the facts and circumstances of Law 18/62. It follows, therefore, that Law 18/62 is not contrary to, or inconsistent with, Articles^7.J_(/)_ and 88.1 (//) Alleged contravention of Articles 24.1 and 28 of the Constitution by Law 18/62:— On this issue the gist of the argument of counsel for Applicant appears to be tothe effect that thecontributions towards meeting part of the expenditure in the budget of the Greek Communal Chamber have been made, not in accordance with the total means of each of the members of the Greek Community, but only on the basis of one aspect of such means, namely, income. He submitted, furthermore, that in this way the burden of the taxwas not evenly distributed amongst all the members of the Greek Community but only amongst those who earned income, with the result that those who had to pay the tax in question, such as Applicant, had to pay a greater amount than they would otherwise have had to pay if every member of the Community had been made liable to contribute. By leaving out non-income-earners from the scope of Law 18/62, and by thus discriminating between themand income-earners, the said Law, counsel for Applicant submitted, also contravened the principles of equality laid down in Article 28, as well as the requirements of paragraph 1 of Article 24 which provides that "Every person is bound to contribute according to his means towards the public burdens". In reply to this argument the Attorney-General of the Republic, after going into the history of provisions such as those contained in paragraph 1 of Article 24 of the Constitution, submitted that it is clear from the Greek and Turkish texts of paragraph 1of Article 24that the principle embodied in the said paragraph is not that everybody should actually 613 1965 Oct. 12, 20 Dec. 9 SOFOCLES DEMETRIADES and 1. T H E GREEK COMMUNAL CHAMBER, 2. THE REPUBLIC OF CYPRUS THROUGH THE MINISTER OF FINANCE 1965 Oct. 12, 20 Dec. 9 SOFOCLES DEMETRIADES and 1. T H E GREEK COMMUNAL CHAMBER, 2. T H E REPUBLIC OF CYPRUS T H R O U G H THE MINISTER OF FINANCE contribute according to his means in the strict sense but according to his capacity to contribute. In this connection reference was also made, interalia,to Article 53of the Italian Constitution which, it was stated, was to the effect that it required all persons to assist in meeting public expenses "in proportion to their capacity to contribute". In support of this argument the Court was also referred to the book "An Expenditure Tax" by Nicholas Kaldor

paragraph I of Article 24; income as basis for taxation on a large scale is a sufficiently reasonable and equitable criterion so as to ensure that the principle of equality is not infringed. Thus the Court is of the opinion that paragraph 1 of Article 24 has not been contravened". The above interpretation of Article 24.1,which this Court 614 adopts, is, in the Court's view, in accordance with the trend of modern theories and doctrines on the interpretation and application of such constitutional provisions, as the autho­ rities cited to the Court would appear to indicate. The Court is satisfied from the evidence of Mr. Nicos Ionides and Mr. Panos Adamides that the form of "personal tax" adopted by Law 18/62, namely, a tax based on income, was not, in the light of the history of previous attempts to impose other forms of taxation and in all the circumstances, an unjust or unreasonable method of taxation to adopt. It was in the discretion of the Communal Chamber to adopt the form of "personal tax" which it considered to be the most equitable and reasonable to adopt and once the legislature has properly exercised such discretion, the Court should not interfere with it. It follows, therefore, that Law 18/62 is not contrary to, or inconsistent with, Articles 24.1 and

1. (Hi)Alleged contravention of Article 24.3 of the Constl· tution by Law 18/62:— The same importance does not appear to have been attached to this issue by counsel as to the previous two issues considered in this judgment. Here again, this issue was fully considered by the Supreme Constitutional Court in Hji Kyriacos Case and this Court, after considering the respective submissions made by counsel on this issue, and in particular the submission of counsel for Applicant that this Case should be distinguished on this issue also from the Hji Kyriacos Case, is of the opinion that the reasoning of the Supreme Constitutional Court for holding that the impo­ sition of the tax in question under the aforesaid Law 16 of 1961 of the Greek Communal Chamber did not amount to the imposition of retrospective taxation in cotravention of paragraph 3 of Article 24 of the Constitution,applies, mutatis mutandis equally to the facts of the case now before the Court and to the facts and circumstances pertaining to Law 18/
2. The relevant passage of the Decision of the Supreme Constitutional Court in Hji Kyriacos Case commences at letter Η on page 29 and ends at letter Ε on page 30, and need not be repeated here. It follows, therefore, that Law 18/62 is not contrary to, or inconsistent with, Article 24.
3. 615 1965 Oct. 12, 20 Dec. 9 SOFOCLES DEMETRIADES and
4. T H E GREEK COMMUNAL CHAMBER,
5. T H EREPUBLIC OF CYPRUS THROUGH THE MINISTER OF FINANCE 1965 Oct. 12, 20 Dec.9 SOFOCLES DEMETRIADES and
6. THE GREEK COMMUNAL CHAMBER,
7. THE REPUBLIC OF CYPRUS THROUGH THE MINISTEROF FINANCE Thus, for all the reasons given above, the Court is of the opinion that Law 18/62 is not unconstitutionalvis-a-vis Articles 87.1(0 and 88.1, Articles 24.1 and 28, and Article 24.
8. This being so it follows that the assessment which is the subject-matter of this recourse and which has been made under Law 18/62 is also not unconstitutional. This Application cannot, therefore, succeed and is dismissed accordingly. Having regard to all the circumstances there will be no order as to costs. Application dismissed. No order as to costs. 616