ICXJL 1988May5 (A.LOEOU.Ρ,MALACHTOS,SAWtDES,STYUANIDES,KOURRB.JJ.) THE DIRECTOR OFSOCIAL INSURANCE SERVICES, v. THRASYVOULOS GEORGHIADES, Accused. (QuestionofLaw ReservedNo. 251). 5 ConstitutionalLaw —Additionalduespayablebyreasonoffailuretopay in timesocialinsurancecontributions— TheSodal InsuranceLaws 1980-1984. sections 73(im, 80
(1)(2K4). 81,84 and 90
(1)and the SocialInsurance(Contribution)Regulations, Regs. 22 and24 —Not inconsistentwithArt. 12orArt. 24.1 orArt.24.4 oftheConstitution. Sodal Insurance—Additional duesforfailure topaysocial insurance contributionsin time— Natureof. 10 Constitutional Law— Public burdens— Constitution Art. 24.1 — Additional dues for Mure topay socialinsurance contributions in time— Such dues are notcontributions topublicburdens. 15 Thequestionreservedfortheopinionof theSupremeCourtinthis case iswhether the aforesaid provisions, whereby additional dues areimposed forfailure topay intimesocialinsurancecontributions areinconsistentwith Art 12
(1)
(2)
(3)ofthe Constitutionorwith Art 24UH4) thereof. Held,:
(1)AdoptingtheratioofLoizouv. SewageBoardofNicosia
(1988)1 C.L.R.\22,theCourt reached the conclusion that the aforesaidprovisions are notinconsistentwithArt 12. 20
(2)Art 24.1 does not come into play at all as this is not a contributiontowardspubBe burdens.
(3)Art 24.4isalsonotapplicable astheadditional chargeisan administrative sanctionprescribed by law, in order topromptthe taxpayertopayintimeamatterconducivetoproperadministration. • Opinionasabove. 2 5 (Note:ThisisanEnglish translation ofthe Judgment in Greekappearing at PP. 74-78ante). 79 Dlr. of Social Insurance v. Georghiades
(1988)Cases referred to: Loizou v.Sewage BoardofNicosia
(1988)1C.L.R. 122. Question ofLaw Reserved. Question of law reserved by the District Court of Limassol (Hadjihambis, D.J.) for the opinion of the Supreme Court under 5 section 148of the Criminal Procedure Law, Cap. 155 relative to a rulingof thesaid DistrictCourtmade inthecourseofthehearing of Criminal Case No. 18171/84 filed by the Director of Social Insurance against the respondent, for omitting to pay the additional dues contrary to sections 73(l)(i), 88
(1)
(2)
(4), 81, 84 10 and 90
(1)of the Social Insurance Laws 1980-1984 and Regulations 22 and 24 of the Social Insurance (Contributions) Regulations 1980-
- Chr.loannides, fortheDirector ofSocial Insurance. Accused appeared inperson. Cur.adv. vult A.LOIZOUP.readthefollowingjudgment ofthe Court.Thisis a Question ofLawReserved fortheopinion oftheSupreme Court under section 148of theCriminal Procedure Law, Cap.
- The accused was charged before the DistrictCourt of Limassol 20 with three counts. The first one was for omitting to pay Social Insurance contributions as a self-employed person contrary to sections 3(b), 10, 12
(1), 13, 14
(2), 21, 73(l)(b)(d)(e)(f)(fl),(g), <ia), 80
(1)
(2)
(4)(5>,81,84 and90
(1)of the Social Insurance Laws, 1980 to 1984andRegulations9,18,19,21,and22oftheSocialInsurance 2 5 (Contributions) Regulations, 1980to 1984.Thethirdcountwasthat theaccusedomittedtopayspecialcontributionforthedefenceofthe ' Republic contrary to sections 2(l)(b), 3
(2)(c),
(3),
(4),
(8), 5
(1)
(2), 13
(1)
(2)
(4)
(6), 14, 15,·16of the Special Contribution (Defence of the Republic) Law 1984.Thesecond countwhich gaverisetothe 30 . question reserved and to which the accused pleaded not guilty, charged the accused of the offence of omitting to pay the additional dues contrary to sections 73(l)(i), 80
(1)
(2)
(4), 81, 84 and,90
(1)of the Social Insurance Laws, 1980 to 1984 and Regulations 22 and 24 of the Social Insurance (Contributions) 35 Regulations 1980'to 1984. The accused raised the question of constitutionality of the 80 2 C.L.R. Dlr.of Social Insurance v.Georghiades A.Loizou P. relevant lawsand regulations under which thiscount was brought totheeffect thattheimposition ofadditionalduesforfailure topay social insurance contributions in time, is contrary to Articles 12
(1)
(2)
(3)and 24
(1)
(4)of the Constitution. 5 The questions raised are as follows: Whether sections 73(l)(i), 80
(1)
(2)
(4), 81,84 and 90
(1)of the SocialInsuranceLaws1980to1984and Regulations22and24of theSocialInsurance(Contributions)Regulations 1980to1984are contrary to: 10
(1)Article 12{1)
(2)
(3)of the Constitution, and,
(2)Article24
(1)
(4)of the Constitution. Theanswertoboththeabove questionsareinthenegative.The question oftheimpositionofanadditionalcharge incaseof failure of a taxpayer .to pay in time has been considered by this Court 15 recentlyinteraliainthecaseofMeropiMichaelLoizou, v. Sewage Board ofNicosia
(1988)1 C.L.R. 122atpp. 128-129.Inthat ca.e the previous Case Law was reviewed and Stylianides J., who delivered the unanimousjudgment ofthe Co ;irthad thistosay: «Theadditionalchargeisfixedbythechallenged legislation at20% in case of non payment atthe prescribed times. 25 30 Theadditionalamount ispaid intothe FundoftheBoardto be used for the purposes of the Board. The payment of this additional charge is dependent on the objective criterion of non payment and not on any subjective criteria or the non payment for no reasonable cause. The tax payer is charged withthisadditionalburdenforthesolereasonofnon payment at the prescribed time. Thisdoes not offend the provisionsof Article24.4 of the Constitution, norisita punishment in the sense of Article 12.3oitheConstitution. Itisina senseonlya sanction prescribed bylawinordertoprompt thetaxpayerto pay in time, a matter conducive to proper administration, taking cognizance of all burdens cast on public revenue by nonpunctual payment.» Andfurther down itwassaid: «The power of the Taxing Authority to impose additional 81 A.Loizou P. Dtr.ofSocial Insurance v .GeorghUdes
(1988)chargeindefault ofpayment ofataxiswellrecognized.The taxpayernormallyisburdenednotonlywithinterestsonhis unpaid tax, but, also, additional charge. These additional charges, includinginterest,aretheresultofthefailureofthe citizen to perform his duties towards the State or a 5 Corporation of Public Law - (see Kynakopoulos, Greek AdministrativeLaw,4thEdition,PartC,p.353). A similar approach is to be found in Stassinopoulos DiscoursesonPublicFinanceLaw,3rdedition,1966,p.292. AlongtheselinesonemayseetheapproachofthisCourtin 10 IstambouliBros., v.DirectorDepartmentofCustoms&Excise
(1986)1C.L.R.465,inwhichtheforfeiture ofgoodsbrought into the Republic in violation of the relevant Customs legislation wasconsidered asan administrativemeasureand not as punishment that infringes Article 12.3 of the 15 Constitution.» We adopt fully this reasoning which sets out the principles governingtheissuesbeforeus. Needlesstosaythatparagraph 1ofArticle24,doesnotcome into play at all as this isnot a contribution towards the public 20 burden and paragraph 4 of the same Article likewise is not applicable as the additional charge is, as already found, an administrativesanction prescribedbylaw,inordertopromptthe taxpayer to pay in time a matter conducive to proper administration. ' Thecasethereforewiththeanswersabovegivenissentbackto thetrialCourt. Orderaccordingly. 82 ^