clr/1987/1987_3_111.pdf

(3)—Powers of Ministerof Finance under section 46—The two sec honsshould be readtogether—Inexercisinghispowers under section46 the Ministerhas no power toimpose conditionsoutside thescope ofRegulations made by the CouncilofMinistersunder section 52

(3)The applicant, who is a holder of a certificate of the London Chamber of Commerce inHigherAccounting andhadworked withRussel andCo , a firm of accountants and auditors from 1972 till 1983, applied to the respondent Minister for an authorization to exercise the profession of an approved auditor By letterdated24 9 84* theActing Director-Generalof the Ministry of Finance informed the applicant that the possibility of granting to him a limited and conditional authorization would be considered, provided beforehand, he passes certain examinations descnbed inthesaid letter As a result theapplicant filed thepresent recourse Counsel for the respondent raised the preliminary objection that the sub judiceactisnotexecutory, butadmittedthatifsuchobjection isnotsustained, theactshouldbeannulledashaving beentakeninabuse orexcessof power Held, annulling the sub judice decision

(1)Executory administrative acts are,asdefined intheConclusionsfromtheCaseLaw oftheGreekCouncilof State (1939-1959) page 237 those «by means of which the will of the administration is expressed, aimirfg attheproductonof legal consequences 'Quotedatpageρ 114post 111 Demetriou v. Republic

(1987)regarding those governed and entailing its immediate administrative enforcement The main element of the notion of executory act is the immediate production of legal consequences» This definition has been adopted in a number of cases by this Court In this case the sub judice act expresses the definite willof therespondentnottogrant totheapplicantthe ^ authonsation mquestion unless he participates tnthe examinations referred intheaforesaid letter (loannidou ν TheRepublic

(1965)3 C LR564 andon appeal

(1966)3 C L R 480, Pavhdes ν TheRepublic

(1977)3 CL R 421, Tanisν TheRepublic

(1978)3C LR 314, andKitromilidesν The Republic

(1984)3CLR 1279, distinguished) Itfollowsthatthepreliminary objection ™ fails

(2)Therelevant law empowenngtheMinisterof Financetoissue authonsa­ tion toaperson toprepare accountsandassessments forincometax purposes isLaw 58/61,asamendedbytheIncomeTaxLaws 4/63-24/81 andinparte ularsection46* Thepower of theMinisterthereunderistoimposeconditions 1 5 for«ensunng preparationandsubmission ofaccounts»andtowithdraw aper­ mitif«theability orconductofanaccountantinthepreparationofaccounts justifies such anaction » Thissectionshouldbe readinconjunctionwithsec­ tion 52

(3), empowenng the Councilof Ministers tomake regulations gover­ ning the grant or withdrawal of authonsationfrom independentprofessional 2 0 accountants undersection 46 TheMinisterhas nopower toimposeanycon­ ditionsfor the issue of authonsationwhichare outsidethescope ofthe regula­ tions made by the Councilof Ministers As thisiswhat happenedinthiscase, the sub judice decision has to be annulled as having been taken inabuse or nr excess of power Sub judice decision annulled £50 costsinfavour ofapplicant ?asesreferred to loannidou ν Republic

(1965)3 CLR664 and on appeal

(1966)3 C L R 480 30 Pavhdes ν Republic

(1977)3 C LR 421, Taws ν Republic

(1978)3 C L R 314, Kitromilidesν Republic

(1984)3 CLR 1279, Republic ν Dememou and Others

(1972)3 C LR 219, HjiPanayi ν Municipal Committee ofNicosia

(1974)3 C LR 366, Kynakidesv Municipality ofNicosia

(1976)3 C L R 183, Vassiliadou and Another ν Republic {\985) 3 C L R 1296, Previouslysection 53 re numbered to 46 by Law 60/69 112 35 3 C.L.R. Demetriou v. Republic Decision 1194/1957oftheCreek Councilof State Recourse. Recourse against the refusal of the respondent toauthorise the applicant to prepare accounts and assessments of income for the 5 purposes of the Income Tax Laws Th Ioannides, for the applicant St Theodoulou, for the respondent Cur adv vult SAWIDES J read the following judgment The applicant by 10 thisrecourse praysfor the following relief Adeclaration oftheCourtthattheactand/ordecision oftherespondent communicated tothe applicant byletter dated the 24th September, 1984, whereby hisapplication forthe issueto himof authonsation to prepare accounts and assessments of income for 15 the purposes ofthe Income Tax Lawswasdismissed bytheMinister of Finance, isnulland void and of no legal effect The groundsoflawon whichtherecourse isbased arethe following

(1)The respondent acted inviolation and/or misinterpretation 20 of the Income Tax Laws 58/61-24/8)

(2)The respondent based his decision on Regulations which were invalid and/or not dulypublished or approved

(3)The respondent acted unlawfully and/or in abuse or excess of power 25

(4)He exercised hispowersundertheIncomeTaxLawswrongly.

(5)Theapplicantwastreated inadiscnminatory mannerinviolation of the Constitution

(6)The subjudice decision isnot duly reasoned and 30 (?)The respondent acted under a misconception of fact Counselfortherespondentbyhisoppositionraisedthepreliminaryobjection that thesubjudice decision isnot an executory administrative act in the sense of Article 146 of the Constitution 113 Sawidee J. Demetriou v.Republic

(1987)Subject tosuch objection, he submitted thatthesubjudicedecisionwasproperlytakenaccordingtothelawandtheRegulations andintheproperexerciseofthepowersvestedintherespondent anditisdulyreasoned. Thefactsofthecasearebrieflyasfollows: 5 TheapplicantistheholderofacertificateoftheLondonChamber ofCommerce inHigherAccounting, (L.C.C.AccountingHigher), since 1970.From 1972till 1983heworkedwith Russel & Co.afirmofaccountantsandauditors.Duringsuchperiod,accordingtoacertificate issuedbysuchfirmhehadbeenengagedinac- 10 countingdutiesandwaspreparingaccountsandcomputationsof incomeforthepurposesoftheIncomeTaxLaws. Onthe22ndMarch,1984theapplicantappliedtotheMinister ofFinanceforanauthorisationtoexercisetheprofessionofanapprovedauditor,placingbeforehimallnecessaryinformationcon- 15 ceminghisqualifications andexperience. TheActingDirector-GeneraloftheMinistryofFinance,byletter dated the24th September, 1984,repliedtothe applicant asfollows: «Iamdirectedtorefertocorrespondenceendingwithmylet- 20 ter under reference M.F.601/72/8 dated 5.4.84inconnection with your request for authorization toprepare accounts andcomputationsforincometaxpurposes. Iwould liketoinform you that we would be prepared to considerthepossibilityofgrantingtoyoualimitedandcondi- 25 tionalauthorization,fortheaforesaid purposesprovided,beforehand, you passsuchexaminationsasmaybe prescribed bytheCommissionerofIncomeTax. Presently the required written examinations consistoftwo papersonthefollowing topics: 30 (i)ASpecialpaperontaxlegislation. (ii)ASpecialpaperinauditing. Pleasenotethatthesaidexaminationsareheldtwiceayear, on the 1stJune and 1stDecember and atleastone month's noticemustbegivenbytheinterestedapplicants.» Asaresult,applicanttiledthepresentrecourse. 114 35 3 C.L.R. Demetriou v. Republic S a w i d e s J. Counselforapplicantbyhiswrittenaddressindealingwiththe preliminary objection of counsel for the respondent contended that the sub judice decision is an executory administrative act producive oflegaleffects tendingtoprejudice theposition ofthe 5 applicantintheexerciseofhisprofession.Hewentontoexpound onthegroundsoflawadvancedbyhim.Hesubmittedthattheonlycompetentorgan,whichcanmakeregulationsimposingconditionssubjecttowhichauthorisationmaybegrantedtoaccountants and auditors, isthe Council of Ministers under the provisionsof 10 section52

(3)oftheLaw.Nosuchregulationshadeverbeenmade bytheCouncilofMinistersorpublished intheofficial Gazetteof the Republic inthisrespect.Therefore, thedecisionoftheMinister to invite the applicant to participate in examinations before authorisation was granted to him, wasinthe circumstances null 15 andvoid.Counselforapplicantfurtherarguedthattherespondent InreachingthesubjudicedecisionactedinviolationofArticles25 and28oftheConstitutioninthatsimilarauthorisationsweregranted tootherpersons holdingthesamequalifications astheapplicantwithoutrequestingthemtoundergoanyexaminations. 20 Counsel for therespondentbyhiswrittenaddressfrankly conceded thatifthecourtrejected hispreliminaryobjection thatthe sub judice decision isnot of an executory nature, then, the sub judicedecisionhastobeannulledasheagreesthatitwastakenin abuseand/orinexcessofpower.Asimilarstatementwasmadeby 25 counselinthecourseofthehearing. Inexpoundingonhispreliminaryobjection, counsel fortherespondentsubmittedthattheactinquestionismerelyapreparatoryact for enabling the Ministerto reach hisfinal decision on the matterandassuchcannotbechallengedbyarecourse.Herelied, 30 inthisrespect,onthedictaofthisCourtinthecasesofloannidou v.Republic

(1965)3C.L.R.664and on appeal

(1966)3C.L.R. 480,Pavhdesv. Republic

(1977)3C.L.R.421,Tanisv.Republic.

(1978)3C.L.R.314, andKitromilides v. TheRepublic

(1984)3 C.L.R.1279. 35 Inloannidou v.TheRepublic

(1965)3C.L.R.664,itwasheld byTriantafyllides,J.ashethenwas,thatthedecisionofthePublic ServiceCommissiontoholdawrittenexaminationforcandidates intheprocessofselectionofthemostsuitablecandidatesforappointmentwasapreparatorysteptotheprocessofselection and 40 notafinalexecutoryactwhichcouldbechallengedbyarecourse. 115 S a w i d e s J. Demetriou v. Republic

(1987)The decision was affirmed on appeal

(1966)3 C.L.R. 480). The cases of Paviides (supra) and Tanis(supra) were in respect of grading and general assessments of the applicants' work inre­ spect of particularyears andinbothof themthecourtheld thatthe general assessment of the work of the educationalists in question 5 contained in a confidential report and the outcome of inspection orspecial inspection madeby virtue oftheregulations andthe law, are preparatory actstothecompilation of thelistsof those suitable for promotion and to the actual acts or decisions of promotions and as such they did not produce any direct legal consequence 10 and couldnotbe madethesubject of arecourse underArticle 146 of theConstitution. InKitromilidescase(supra)theFullBenchheld thattheconside­ ration as such of candidates for promotionwas only a preparatory step and did notamounttoan executory act which could be chal- 15 lenged by means of a recourse under Article 146 of the Constitution. I find myself unable to agree with counsel for the respondent thatanyone of the above cases canbe of any assistance inthepre­ sent case. Inalltheabove cases thequestion inissuewas theselec­ tion of the best candidate for appointmentor promotion out of a number of candidates and the acts complained of were rightly found tobe preparatory acts.Thepresent case is clearly distingui­ shable from theabove cases as itdoes notconcernany process for the selection of one candidate out of a number of candidates but 25 concerns the admission of the applicant into a certain calling, the requirements for which are contemplatedby law. Executory administrative actsare,asdefined intheConclusions from the Case Law of the GreekCouncil of State (1929-1959)at p. 237: «...εκείναι δι' ω ν δηλούται βούλησις διοικητικού οργά­ νου, α π ο σ κ ο π ο ύ σ α ειςτηνπ α ρ α γ ω γ ή ν εννόμου αποτε­ λέσματος έναντι των διοικούμενων και συνεπαγόμενη την άμεσον εκτέλεσιν αυτής δια της διοικητικής οδού. Το κύριον στοιχείον της εννοίας της εκτελεστής πρά- 35 ξεως είναι η άμεσος π α ρ α γ ω γ ή εννόμου αποτελέσμα­ τος, ...» («...acts by means of which thewillof theadministrationis ex116 30 3 C.L.R. 5 Demetriou v. Republic S a w i d e s J. pressed, aiming at the production of legal consequences re­ garding those governed and entailing its immediate admini­ strative enforcement The main element of the notionof exe­ cutory act is the immediate production of legal consequences »). This definition has been adopted by our courts in a number of cases (see The Republic ν Demetriou & Others

(1972)3 C L R 219, 223, Hadppanayi ν Municipal Committee of Nicosia

(1974)3 C LR 366, 375, Kynakides ν Municipality of Nicosia

(1976)3 10 C LR 183,189) In the Kynakides case (supra) itwas held thata letter informing theapplicantthatthebuilding permitfor which she applied would only be possible if new plans were submitted complying with cer­ tain remarks concerningthe new street alignment was considered 15 as expressing thewillof the administrationnottogrant thepermit at thatstage and was thus executory Similarly in the case of Vassihadouand Another ν Republic

(1985)3 C LR 1296, a letter informing the applicants thattheir application for abuilding permitcould notbe proceeded with be20 cause itcontravened acertain regulation, amountedtoan expres­ sion of thewillof the administration and was, as a result, executo­ ry Useful reference may also be made tothe decision in Case No 1194/1957 of the Greek Council of State,whereby the results of 25 an examination held for the purpose of admission into a certain calling were held tobe of a final executory nature In the light of the above cases I find thatinthe circumstances of the case, the sub judice decision expresses the definite will of the respondentnottogranttotheapplicantauthonsationunless heta30 k e s p a r t in the examinations referred to therein and is therefore executory Irrespective of the admissions made by counsel for the respon­ dent thatthe sub judice decision was taken in exce&s andabuse of power, I feel bound, in the light of our case law on this matter,to 35 adjudicate on this issue and I shall theiefore proceed to make my findings on thevalidity of thesub judice decision The relevant law empowering the Minister of Finance to issue authonsation toaperson topreD">T'ec:(~ccjr,.*rand assessments for ι i "" Sawides J. Demetriouv. Republic

(1987)income tax purposes, istheIncomeTax Law 58/61 as amended by theIncomeTaxLaws4/63-24/81and,inparticular, section 46 (previouslysection 53,re-numbered to46 byLaw60/69).Section 46 providesas follows: «Λογαριασμοί καιπροσδιορισμοί τουφορολογητέου 5 εισοδήματοςπροσαγόμενοι τω Εφόρωή συνοδεύοντες φορολογικός δηλώσεις υποβαλλόμενος τω Εφόρω δυνατόν, εν τη υπό του Εφόρου ενασκήσει της διακριτικήςτου εξουσίας,ναμηληφθώσιν υπ'όψινεάν δεν ητοιμάσθησαν και επιστοποιήθησαν υπό τίνος *0 ανεξαρτήτου λογιστού ασκούντος επάγγελμα εν τη Δημοκρατία και δεόντως εξουσιοδοτημένου υπό του Υπουργού των Οικονομικών όπως ετοιμάζη λογαριασμούς και προσδιορισμούς φορολογητέου εισοδήματος δια σκοπούς επιβολής φόρου 15 εισοδήματος. Ο Υπουργός των Οικονομικώνδύναται, κατά την έκδοσιν τοιαύτης αδείας να επιβάλη τοιούτους όρους οίους ήθελε κρίνει αναγκαίους ή σκόπιμους δια την εξασφάλισιν της ετοιμασίας και υποβολής λογαριασμών δεικνυόντων την αληθή και 20 ακριβή δήλωσιν των κερδών ή ζημιών εμπορικής ή βιομηχανικής επιχειρήσεως, επιτηδεύματος ή βιοτεχνίας, ελευθερίου ή άλλου τινός επαγγέλματος: Νοείται ότι ο Υπουργός των Οικονομικών δύναται οποτεδήποτε να αφαίρεση την τοιαύτην άδειαν εκ 25 προσώπου επαγγελλομένου τον λογιστήν ή εκ τίνος μέλους ανήκοντος εις οίκον τοιούτων λογιστών, εαν η ικανότης ήσυμπεριφοράτουλογιστού εντη ετοιμασία λογαριασμών ή προσδιορισμών του φορολογητέου εισοδήματος δικαιολογεί τοιαύτην ενέργειαν εκ μέρους 30 του Υπουργού Οικονομικών: Νοείται περαιτέρω ότι οιαδήποτε απόφασιςτου Υ­ πουργού των Οικονομικών βάσει του παρόντος άρ­ θρου θαδύναταινααναθεωρηθή υπότου Υπουργικού Συμβουλίου συμφώνως τοις Κανονισμοίς τοις γενομέ- 35 νοις δυνάμει του άρθρου 52.» And inEnglish:(«46. Any accounts and any computations of chargeable in­ come produced to the Commissioner or accompanying any 118 3 C.L.R. 5 10 15 20 Demetriou v. Republic S a w i d e e J. returnofincomesubmittedtotheCommissionermay,atthe Commissioner'sdiscretion,notbeconsiderediftheyhavenot been prepared and certified by an independent accountant practising inthe Republic dulyauthorised bythe Ministerof Financetoprepareaccountsandcomputationsforincometax purposes.The Minister of Finance inissuingsuch authorisationmayimposesuchconditionsastohimmayappearnecessaryoradvisableforthepurposeofensuringpreparation and submissionofaccountsshowingatrueandcorrectstatement oftheprofitsorlossesofatrade,business,profession orvocation: ProvidedthattheMinisterofFinancemayatanytimewithdraw such authorisation from any practising accountant or memberofafirmofsuchaccountants,ifanaccountant'sability or conduct inthe matter of preparation of accounts and computations of chargeable incomejustifiessuch an action onthepartoftheMinisterofFinance; ProvidedfurtherthatanydecisionoftheMinisterofFinance underthissectionmaybesubject toreviewbytheCouncilof MinistersinaccordancewithRegulationsmadeundersection 52.») The power of the Minister under section 46, when issuing authorisation isto impose conditions ashe deems necessary for «ensuring preparation and submission of accounts.» He is also 25 empowered towithdraw apermitif«theabilityorconduct ofan accountant in the preparation of accounts.... justifies such an actiononthepartoftheMinisterofFinance.» Section 46 should be read in conjunction with section 52

(3)whichprovidesthat: 30 «TheCouncilofMinistersmaymakeregulationsfortheapplication oftheprovisionsgoverningthegrantorwithdrawalof authorisation from independent professional accountants undersection46.» Itisclearfrom theabove provisionsthattheorganvestedwith 35 thepowertomakeregulationsastothegrantorwithdrawalofan authorisation istheCouncilofMinistersandtheorgan delegated withthepowertoissueorwithdrawsuchauthorisationistheMinisterofFinance. 119 SawidesJ. Demetriou v. Republic

(1987)Reading the two sections together, it is apparentthatthe Mini­ ster has nopower toimpose anyconditionsfor theissueof authoiisation which are outsidethescopeof theregulationsmadebythe Council of Ministers TheMinistercanrefuse tograntauthorisation if an applicant does not satisfy the minimum qualifications requued for thedischarge of hisduties,but hecannotimposeanycon­ ditions notcontemplatedby the regulations 5 Itiscommonground thatnoregulations have been madebythe Council of Ministers mthisrespect '•i the present case the qualifications of the applicant for the 10 f. rpuse for which authorisationwas applied forwerenotdisputed η*, being unsatisfactory TheMinister by imposing upontheappli­ cantaconditionof success inwrittenexaminationsbefore granting MUthonsation to him has acted in excess and/orabuse of hispowfis and thesub judice decision must therefore be annulled 15 Inthe result this recourse succeeds and thesubjudice decision is hereby annulled with £50 - towards costs infavour of theappli­ cant Sub judice decision annulled with£50 - costs 20 in favour of applicant 120