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clr/1989/1989_3A_250.pdf

(1989)19S9Februan 24 ISAVVIDES.J] INTHE MATTER OFARTICLE 146OFTHE CONSTITUTION NICOS PSATHARIS AND OTHERS. Applicants. v. THE MINISTRY OF FINANCE. THE COMMISSIONER OF INCOME TAX. Respondents. (Case So. 322/87) Executory act—Taxation—TheCollectionandAssessment of TaxesLaw. 197S-79. section20—Failure toTile an objection withinthetimelimited — Uponexpiration of thetimelimit,thedecision becomes executory — Objectingby usingmethod unknowntotheLaw—Doesnotprevent the decisionm questionfrom becomingexecutory. 5 Executory act— Confirmatory act — Re-cxamination of matter from the legal aspect only of the case — Docs not amount to a newinquiry resultingtoanew executor} decision. 10 The applicants were, at all material times, serving with the Ports Authority Due to the manner m which the authonn calculated the amount of income tax to be collected from the monthh salaries of the applicants, the applicants found themselves, owing to the revenue substantial sums of income tax. The respondent Commissioner 15 demanded payment with interest Instead of filing a written objection against the assessment raised b\ the Commissioner, the applicants piotested through their trade unions. demanding equal treatment with public officers. Their case was 2 0 eventually reconsidered, but onlyasfar asthelegal aspect of thecasewas concerned, namely whether interest wasin law payable or not. 250 3 C.L.R. Psathans & Others Λ . Mm. of Finance Finalh the Commissioner reached the same decision and demanded payment of the interest Hencethis lecourse 5 The principles applied b\ the Court in dismissing the recourse sufficienth appear mthe hereinabove Headnotes Recourse dismissed \ o order as to costs 10 Cases referredto Chnsiohdes ι Republic
(1971)3CLR 102 Razii andAnothei \ Republic
(1979)?CLR 121 15 Spy ndaki and Anotherι Republic(19S6) 3 CLR Ι93Ϊ Papasax ιas \ Elecincm Authority of Cyprus(19S6) 3 CLR 2194 20 Recourse. Recourse against the refusal of the respondents to return or delete the interest imposed on and collected from applicants in respect of their income tax for the years 1977-19S
  1. 25 A Papacharalambous. for the Applicants A hvangelou. Senioi Counsel of the Republic, ior the Respondents 30 Cur. adv wit. 35 40 SAWIDES. J read thefollowing judgment The applicants. whose names appear on the attached appendix, challenge the decision of the respondents contained in their letter dated the 23rd February 19S
  2. \\hereb\ the\ refused to return or delete the interest imposed on and collected from the applicants in respect of their respective incometax for theyears 1977 - 1980 Before the 30th September.
  3. the applicants were public officers, serving in the Department of Poits On the 1st October.
  4. the applicants were transferred to the Ports Savvides. J. Psatharis &Others v. Min. of Finance
(1989)Authority of Cyprus (to bereferred to astheAuthority) on the basis of s.35 of the Cvprus Pons Organization Law (Law No. 3S/73). The applicants, besides their salaries, receive additional 5 remuneration from overtimework withtheAuthority. Whilstin the service of the Department of Pons the applicants were not paying any interest on the balance of income tax due by them and assessed after the end of the year and. which was deducted from their salaries by monthly instalments. Thiswasastandard 10 practicefor allpublicofficers. After theyweretransferred tothe Authority, the Authority used to deduct from their overtime allowances a standard sum for each pound they earned without actually calculating theexact amount oftax payable. The result was that the applicants owedsubstantia!amounts of income tax 15 in respect of their overtime work. The applicants were assessed to income tax in respect of the years 1977-19S0 and were notified accordingly by notices sent to them between 1979and 19S
  1. Asitseemsfrom aletterofthe 20 respondents to the Attorney-General's office dated the 12th June. 19S6.theapplicants objectedthrough theirtrade unions to the mode of payment and the imposition of interest on the amounts due.after the expiry of the date fixed for payment on thenotices. Asaresult the respondentsinformed theapplicants 25 by letter dated the 9th April. 19S
  2. that he consented to the payment of the amounts duebyinstalments but that hewas not entitled to relieve them from the payment of interest thereon. Following other subsequent meetings of the respondent 30 Commissioner with theapplicants'tradeunions,theformer sent another letter, on the ISth November.
  3. infonning the applicants that instructions were given by him to the District Income Tax Offices to accept payment by instalments and to leave the matter of interest pending in view of the fact that 35 certain matters concerning them were being discussed with the Government. The applicants kept asking for relief from payment of interest and claiming that they should have the same treatment 40 as public officers. The respondent Commission sought the advice of the Attornev-General's office, bvletter dated the 12th 3 C.L.R. Psatharis &Others v. Min. of Finance Savvides, J. June. 1986.setting out his view, which wasconfirmed by letter of theAttorney-General's office datedthe21st July.
  4. The applicants wrote,through their advocate, aletter to the 5 Commissioner, dated the 10th February, 1987, requesting either: (a) The return of interest on tax paid for the years of assessment 1977-1980.or 10 (b) Waiving of payment of such interest. The applicants were informed by letter dated the 23rd February.
  5. that such interest could not be returned or 15 waived "since it was imposed on the basis of section 42 of the Income Tax Laws. 1978 and 1979". (Obviously meaning the Assessment and Collection ofTaxes Laws. 1978to 1979). It is evident from a subsequent letter of the respondents 20 dated 27th March. 1987.addressed to the Income Tax Officers ofLarnacaand Limassolthatthematter wasnot settledbythen. and that the Director-General of the Ministry of Finance decidedtoseek theadviceoftheAttorney-General's office once again.Byletterdatedthe4thMay. 1987.the Attorney-General's 25 office advised,onceagain,thatPublicOfficers arenot exempted from the provisions of the Law andthat interest waspayable. In the meantime, the present recourse was filed on the 24th April. 1987.challenging the decision contained in the letter of 30 the 23rd February.
  6. Counsel for applicant argued that the respondent acted contrary tothe provisions ofsection 35
(3)of Law 38/73on the basis of which the applicants, who were public officers before 35 their transfer to the Authority have a right to be treated as all other public officers, who pay their income tax by instalments without any interest. Counsel for the respondent submitted that the sub judice 40 decision is confirmatory of a previous one, the executory one being the assessments raised on the applicants, who neither objected tothem within theprescribed period nor didthey file a Savvides, J. Psatharis &Others v. Min. of Finance
(1989)recourse within the time specified by Anicle 146 of the Constitution. He funher argued that the applicants have no legitimate interest to file the recourse since they accepted the sub judice decision unreservedly and paidthetax due. 5 In respect of the substance of the case counsel for the respondents argued that the respondents acted properly on the basis ofsection 42
(1)oftheAssessment andCollection ofTaxes Laws. 197S-1979. and that there isno room for the exerciseof any discretionary power under the provisions of the said 10 section. Funher counsel arguedthattheprovisions of section 35
(3)of The Pons Authority Law. No. 3S/73. do not apply in cases of income tax which is not governed by the provisions of The 15 Public Service Lawbut by an entirely different Law. Before proceeding to the merits of the case I will consider first the objections raised bv counsel for the respondents. 20 It is not disputed that the decision of the respondent to impose interest on thetax payablebytheapplicants wasknown to them at the time they received the assessments raised on them. The applicants,instead ofobjecting intheway prescribed by the Law (s.20 of the Assessment and Collection of Taxes 25 Laws. 194S to 1949), that is in writing within the time prescribed, protested orally, through their trade unions, on an unknown date and staned negotiations between the trade unions, and the respondents asto the mode of payment of the taxes due and whether interest should be paid thereon. This 30 method of objection isnot inaccordance with theprovisions of the Law. The assessments became executory when the time prescribed by the Law for filing objections elapsed without any objections being filed. Although the respondents did in fact reconsider their decision in thisrespect thiswasdonebywayof 35 concession after theoriginal decision became executory. Now coming to the reconsideration of the matter by the Commissioner, thiswasnot doneasaresult ofnewmaterial put forward by the applicants which was not known to the 40 Commissioner atthe time betook his original decision but was a reconsideration from the legal aspect of the case. This, 254 3 CL.R. Psatharis &Others v. Min. of Finance Savvides. J. according to our case law. does not amount to a new inquiry resulting to a new executory decision. (See. in this respect. Christofides v.TheRepublic
(1971)3CL.R. 302:Razis and Another v.TheRepublic
(1979)3CL.R. 127; Spyridaki and Another v. TheRepublic
(1986)3CL.R. 1935:Papasavvas v. Electricity Authority of Cyprus
(1986)3CL.R. 2194). Asa result the decision contained in the letter dated the 23rd February,
  1. which is the one challenged by the present recourse,isnot anexecutory butaconfirmatory one. Sincethis recourse hasbeen filed alongtime after theexecutory decision. that isthe assessments of incometax raised on theapplicants,it isout of time and cannot beentenained and mustbe dismissed. In view of myfinding asabove Ifind itunnecessary to examine the other issues raised. In the result thisrecourse fails anditishereby dismissedwith no order for costs. Recourse dismissed.No orderas tocosts. APPENDIX
  2. Nicos Psatharis
  3. Panayiotis Elia
  4. Anastasis Charalambous
  5. Andreas Louca
  6. Demetris Tabakis
  7. Anthimos Gavriel
  8. Elias Andreou
  9. Vasos Petrides
  10. Theocharis Theocharous
  11. Panayiotis Antoniou
  12. Stefanos Sonini
  13. Georghios Mikellides
  14. Christakis Hambou
  15. Christakis Diakos
  16. Andreas Georghiades 16.Georghios Hadjioudis. 255

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