1987 February 14 [A LOIZOU J] INTHEMATTEROFARTICLE 146 OFTHECONSTITUTION FRANCOUDI & STEPHANOULTD. Applicants. v. THE MUNICIPALITY OF LIMASSOL. Respondent (Case No 598/S4) The Municipal Corporations Laws 1964-1984—Annual fee for carrying onbusi ness—Sub-paragraphs 1(d)and 1(
- e)0)(ccjof Pan Iof the 10thSchedulea* amended by Law 62/84—Applicant company earned on the businessot 'Shipping and travelagent and other related business·—In the lighr of the 5 pnnciple thatincaseof doubt asto the meaning of ataxingstatutetheinter pretationmost favourableto the taxpayer should be adopted the applicant company ought to have been taxed under para 1(
- e)(
- cc)and not under pa ra 1(
- d)10 Constitutional Law—Taxation—Constitution, An 24—Retrospecttvity of afating statute—A taxingstatuteenactedinayear isnot retrospectiveifitimpo-esla xation regardingthepenod startingon the firstdayof the same ιear interpretation of statutes—Taxation—In cate of doubt the meaning most favoura ble to the taxpayer should be prefened 15 20 25 By means of this recourse the applicants a private company with limiifd liability, carrying onthebusiness uf shipping and travpl agentsandother rfla ted business, impugn the validity of the decision whereby an amount ut £500 - was imposedonthemasanannualfee for carrying onbusiness forthf year 1984 Thesubmissions of theapplicantsaretwo,namelythatthesaidtaxationwas imposedretrospectively incontraventionofArt 24oltheConstitution Iwcrtii se Law 62/84, amendingtherelevant scales was published on30 6 84 whe reasthesub-judice taxationrelatedtothewhole year 1984 and thatthrΙΛΧΟ tion inquestion ought tohave been made undersub-paragraph 1(e)(i)(a1 ol Part 1 of the 10th Schedule of the said laws, in accordance with whith sub paragraph the annual fee cannot exceed £275. and not as it was actually done, undersub-paragraph 1(d)*thereof 'Sub-paragraphs 1(
- e)0) (
- cc)and 1(d)arequoted atρ 44post 41 Λ-LolzouJ. Frangoudi & Stephanon v. LssolMHtv
(1987)Held,annullingthesub-judicedecision.
(1)Ataxing Law enactedwithinthe year inrespect of whichtaxation isimposed isnotretrospective asregards the penod starting onthefirstday of theyear tothedate of itsenactment
(2)As it is obvious from the definitions given invarious dictionanes of the words «ατμοπλοία» and «ατμοττλοικώς» (by ship-adverb), «shipping», -shipping agent·,«businessorwork»(intheplural),therearealternative mea ningsandinanyevent somedoubtastotheirexact meaning,which becomes greater, if one examines the ordinary meaning of theotherbusiness referred toinpara. l{d), namely«insurance, airtransportorbanking business». 5
(3)TheCourtisinclinedtotheviewthatthewords «shipping»and«shipping 10 business»refer inthecontexttheyare used tothetransportationby ashipand by ashipping agent andnottothebusiness of ashipping agent,who normally transactsbusiness for the owner.
(4)Itis a cardinal rulethatininterpretinga taxing statutetheCourt prefers incase of doubt outof tworeasonably possible alternative meanings theone 1 5 more favourable to the taxpayer The Court, therefore, came to the con clusion thattheapplicants'business (ashipping andtravel agentandotherre latedbusiness) donotbnngtheapplicantswithin theambitof thesaid sub-pa ragraph 1(d). Sub-judicedecisionannulled. 2 0 No orderas to costs Casesreferredto: Hadjikynakos v. The Republic, 5 R.S.C.C. 22, Anshdou v. TheImprovement BoardofAyia Phyla
(1965)3 C.L.R. 686, SergriicwAnfoniades andOthers v. TheRepublic
(1979)3 C.L.R 641; 25 Vita Ora v. TheRepublic
(1973)3 C.L.R.
- Recourse. Recourse against the decision of therespondenttoimpose on applicants the amount of £500.- as annual fee for carrying on business for theyear
- 3Q G.Michaelides,for theapplicants. J.Potamitis,for therespondent. Cur.adv. vult. A. LOIZOUJ. read the following judgment. By the present recoursetheapplicantCompanyseeksadeclarationof theCourt 35 thatthedecisionoftherespondentMunicipalitycommunicatedto them by letter dated 28th August 1984, (Appendix A),by which therewas imposedonthemtheamountof£500asannualfee for 42 3 C.L.R. Frangoudi & Stephanon v-Lssol Mllty A. Lolzou J. carrying onbusiness for theyear 1984 isnullandvoidandwith no effect whatsoever. The applicant Company is described in paragraph 1 of their application as «a private Company with limited liability with an 5 issued share capital of £159,080 and carrying on the business of shipping and travel agents and other related business» (και διε-" ξάγουν την εργασίαν των ναυτιλιακών και ταξιδιωτικών πρακτόρων και άλλων συναφώνεργασιών). Therespondents inparagraph 1of thestatementof facts intheir 10 noticeof opposition describe themas «carryingonshipping andor other related business with permanentoffice within the municipal limits of Limassol, (ατμοπλοϊκές και ή άλλες ουναφείς εργα σίες με μόνιμογραφείο μέσα στα δημοτικάόρια Λεμεσού). The contentions of the applicant Company are two. Firstly that 15 thesaid taxation was made incontravention of the MunicipalCor porations Laws 1964-1984, and particularly of DartI of the 10th Schedule thereof astheycome,itisclaimed,within sub-paragraph 1(e)(i)(cc)inaccordance with which theannualfee cannot exceed the amount of £275, that it is arbitrary and not based on correct 20 and reasonable criteria and that it is null and void as made in excessand orabuse of power. Secondly thatthesaid taxation was imposed retrospectively incontravention of Article 24 of theCon stitution. Ifeel thatίcanbriefly dispose first of thislatterground on which 25 thereisample authority tothecontrary. Itiswellsettled thataTax ing Law enacted within the year in respect of which taxation is imposed is not retrosoective as regards the period starting on the firstday of theyear tothedate of itsenactment.See Hadjikynakos v. The Republic, 5 R.S.C.C. p.22 at pp.29-30; Anstidou v. The 30 Improvement Board of Ayia Phyla
(1965)3 C.L.R. 686 at pp 689-690; and Serghios Antoniades and Others v. The Republic
(1979)3 C.L.R. 641. Thefact thatLaw^io. 62 of 1984 which amended thebasic Law by thereplacement of F*artIof the 10th Schedule with a new one 35 introducing new scales, published in the official Gazette of the Republic on the30thJune 1986,does notrenderthetaxationim posed thereunderinrespect of thewhole year 1984 retrospective. Even inrespect of the first half year, itsenactmenton the last day ofJune,brings itwithintheprinciples enunciatedinthe aforemen 43 A. Lolzou J. Frangoudi & Stephanouv. Lssol Mlity
(1987)tioned cases as regards the firstsix monthsof theyear, ifsuchadif ferentiation could at allbe made. As regards the first ground of Law relied uponreference need be made to paragraphs (
- d)and (
- e)(
- i)(cc), of Part Iof the 10th Schedule, as amendedby Law 62 of 1984. 5 «(δ) Εταιρείες περιορισμένης ευθύνης που ασκούν ασφαλιστικές, ατμοπλοϊκές, αεροπορικές ή τραπεζιτικές και λοιπές εμπορικές εργασίες, καθώς καιοργανισμοί χρηματοδοτήσεως (ε) Εταιρείες περιορισμένης ευθύνης που δεν εμ-10 πίπτουν στηνπ α ρ ά γ ρ α φ ο (δ) ανωτέρω: (ι) ιδιωτικές εταιρείες: είτε ημεδαπές, είτε αλ λοδαπές, είτε ελεγχόμενες από αλ λοδαπούς είτεόχι- 15 (γγ) με εκδοθέν μετοχικό κεφάλαιο πέραν των £10,000 ή με κύκλο εργασιών πέραν των £100,000 ή με αριθμό υπαλλήλων πέραν των10» And in English: «(
- d)Companies with limited liability which carry on insur- 20 ance, shipping, air or banking and other commercial business, as wellas finance organisations (
- e)Companies with limited liability which do not fall within paragraph (d)above: (
- i)private companies: either local or foreign, eithercon- 25 trolled by foreigners ornot (
- cc)with issued share capital over £10,000 or with a business turnover over £100,000 or with a number of employees over 10:» Underparagraph (
- d)theprescribed annualfee willnotexceed one thousand pounds,whereas underparagraph (e)(i)(cc),£275. 44 ^0 3 C.L.R. Frangoudi & Stephanou v. L ssol Μ lity A. Lolzou J. Ithas been argued on behalf of the applicants thattheconten tion of the respondents thattheapplicants carry on shipping busi ness andtherefore they come within the ambit of paragraph (d),is wrong, as they are shipping and travel agents who represent 5 foreign shipping firms but they do not themselves carry on ship ping business Insupport of theaforesaid contentionI was referred tothe defi nition of thewords «ατμοπλοία»and «ατμοπλοικως»which are defined in the Λεξικό της Δημοτικής, Second Edition ρ 106, 10 where «ατμοπλοία» is defined as «η συγκοινωνία με ατμό πλοιο α π ο ατμοπλοϊκήεταιρεία^^ηβροΛβΐιοη withashipby a shipping company», and «ατμοπλοικως»,«by ship» (adverb) «αυτό π ο υ αναφέρεται στην ατμοπλοία*ατμοπλοϊκή συγ κοινωνία», «thatwhich refers toshipping shipping transport» 15 On the other hand the respondent Municipality by their notice of opposition andtheiraddress sought tojustify thisannualfee im posed ontheapplicantCompany,onthesole ground thattheonly possible answer tothequestion, what business doestheapplicant Company carry out, is «ατμοπλοϊκές εργασίες», «shipping 20 business» «Shipping», is defined in the Shorter Oxford Dictionary as «A ship or ships for the use or accommodation of a person or thing Ships collectively, the body of ships that belong to a person's country's fleet, that frequent a particular port or harbour, or that 25 are used for a certain purpose Navigation—A voyage,a sailing— The action of putting persons or things on board ship or transporting themby ship » «The shipping agent» is defined in the same dictionary as «a li censed agent who transacts a ship's business for the owner» And 30 a«shipping office» is«an office where seamen signonforavoyage; an office where as -agent receives goods for shipment» The word «εργασίαι», «business orwork»(intheplural) is defi ned in the New Dictionary by Demetrakos as «ακτίς δράσεως επιχειρήσεως τινός» «the radius (range) of action of anenterpnse» 35 Itis obvious from the aforesaid definition of the matenal words of thisstatutory provision, thatthere are alternative meanings and in any event there are some doubts as to their exact meaning which becornes greater if one examines the ordinary meaning of 45 LoIzouJ. Frangoudi & Stephanou v. L e s o l M l l t y
(1987)e other business referred to in paragraph (d) herein-above set it, namely, «ασφαλιστικές, αεροπορικές, ή τραπεζικές >γασίες», (insurance, air transport, or banking business) if we ke for example the air transportbusiness, could in the ordinary :nse includea travel agentwhosecures apassageorcargo forhis 5 ients on an airplane belonging to an airways company, or does mean thatitrefers tothebusiness of an airways company?The iswer in my view is in the negative, a travel agent or an airways jent does not carry outairtransport business. In the light of the above I am inclined totake the view that «a- 10 ιοπλοϊκώς», «shipping» and «ατμοπλοϊκές εργασίες», «shipng business» refer in the context in which they are used to the importation by ship and by ashipping Companyand nottothe isiness of ashipping agent,who normallytransactsaship's busi;ssforthe owner. Inthe circumstances therefore with regard tothe interpretation a statutory provision as the one in hand, which imposes taxa>n,one should bear inmindthecardinal rule thatif there is any )ubt about the construction of a particular provision a Court, ould have preferred out of two reasonably possible alternative 20 eanings thatwhich is morefavourable tothetaxpayer. (SeeVita rav. The Republic
(1973)3 C.L.R.273, 280). Guided by the aforesaid principle, I have come to the conision thattheadmittedbusiness of theapplicantCompanyof «a ipping and travel agent and other related business» does not 25 ing them within theambit of paragraph (d)of PartI of theTenth :hedule and therefore not liable to taxation under that paraaph. Forall theabove reasons thisrecoursesucceeds.Thesub judice ;cision is hereby annulled butinthe circumstancestherewillbe 30 > order as to costs. Sub judice decision annulled. No order as to costs, 46 »5