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clr/1989/1989_3A_620.pdf

(1989)19S9 May 30 [SAWIDES J ] INTHE MATTER OFARTICLE 146OFTHECONSTITUTION MANOLIS Κ STAMATIOU Applicant, ν THE REPUBLIC OFCYPRUS,THROUGH THECOMMISSIONER OFINCOMFTAX, Respondent. (Case No 721ββ) Executory act — Confirmatory act — Assessment of income tax — Recourse impugning the assessment dismissed — Letter demanding interest as from originalassessment— Since m <iny event the original assessmentscarryinterest astromthe dayof theirissue, theletter didnot amount to an executory, but to a confirmatory act 5 Time within whichto file a recourse — Constitution,Art 1463 — Letter demanding payment on interest on assessed income rax — Objection filedafter the expirationot 6months — Insistence by respondentson the payment of interest — Recourseout of time \Q In this case theapplicant was assessedtopay incometax inrespect of the years of assessment 1977
(76), 1978
(77)and 1979
(78)He impugned the assessment by recourse to this Court The recourse was dismissed Following thedismissal, therespondentwrote totheapplicant demanding 15 paymeni of interest in accordancewith theonginal assessment Nearly 6 monthslater theapplicant disputedhis obligation topay the interest The respondent did not accept applicant's contention and replied to the applicant accordingly Hence this recourse The grounds of dismissing the recourse appear sufficiently inthe hereinabove Headnotes. 20 Recourse dismissedCosts £100againsttheapplicant 620 3 C.L.R. Stamatiou v. Republic Case referredto: Stamatiou v.Republic(19S6) 3C.L.R.
  1. 5 Recourse. Recourse against decision oftherespondent todemand from applicant thepayment ofinterest ontheincometax assessedon him forthe years 1977-
  2. 10 Chr. Triantafyllides, forthe Applicant. Y. Lazarou.Counsel ofthe Republic B,fortheRespondent. 15 20 25 30 Cur.adv.vuit. SAWIDES. J. read the following judgment. The present recourse is directed against the respondent's demand for payment of interest ontheincome taxtowhich applicant was assessed topayinrespect of the years of assessment 1977
(76), 1978
(77)and 1979
(78)totalling to £1.694.-. The applicant during the years
  1. 1978 and 1979was employed by the "SolMaritime Services Ltd",asanInspector onboard theferry-boat "Sol Phrvne".Healso carrieda business of livestock breeding. On 1stAugust, 1980, the respondent issued tothe applicant notices of Assessment of Income Tax for the years of assessment 1977to 1979against which heobjected by a letter dated 27th August, 1980,addressed to the respondent byhis accountant, ontheground that such assessments were not in accord with applicant's declarations of income and were excessive. 35 40 On Τ7th November, 1980, the respondent issued to the applicant notices of Assessment for the years of assessment 1977 to 1979, by which applicant wasrequested topaythe tax assessedamountingto£657.30 fortheyear 1977 plus interestat 6%as from 1st July 1978, £1,592.65.- for theyear 1978plus interest at 9%as from 1stJuly 1979, and £497.50 for the year 1979 plus interest at 9%as from 1st July
  2. The claim for 621 Savvides, J. Stamatiou v. Republic
(1989)payment of interest was based on section 42
(2)of the Assessment and Collection ofTaxes Laws, 1978- 1979. Applicant filed to the Supreme Court recourse No. 36/81 challenging the said assessment. The Supreme Court by its 5 decision delivered on 25th February 1986,dismissed applicant's recourse (see Stamatiou v.TheRepublic
(1986)3C.L.R.391). The Supreme Court found atp.400that: "In thecircumstances Ishouldsaythatthesubjudicedecision 10 wasreasonablyopen totherespondent andwasproperly and correctly reached inaccordancewiththelawsandregulations in force." No appeal was lodged against the aforesaid decision of the 15 Supreme Court which becamefinal andconclusive. Following the Supreme Court's decision the respondent on 15th March,
  1. demanded payment of the tax and interest ~• due under the assessments the subject-matter of Recourse No. 20 36/81 by forwarding to the applicant "Assessment Notices" under Code
  2. which according to Note 7 thereon were "final assessments following Court Orderorsettlement after appeal to the Supreme Court." 25 Nearlysixmonths later applicant throughhistax consultants addressed the following letter to the respondent dated 5th September 1986: "With reference to the notices of Assessment under Code 8 30 which were sent for the year of assessments 1977, t978 and 1979 we wish to observe that the demand for payment of interest asfrom the 1stofJulyofeach oftherespective years of assessments is unjust, once the said assessments were subject to a recourse to the Court which wasfinally decided 35 - • in March,
  3. •
  4. As the question of assessment of the said-income was a question of law which wassubmitted to theCourt andasthe issue of the decision of the Court delayed for a period of 40 more than"five years;you arerequestedto'write off theclaim for interest andclaim interest asfrom 1st May 1986." 622 3 C.L.R. Stamatiou v. Republic Savvides, J. The respondent replied to the above request by letter dated 9th October 19S6,the contents of which are as follows: 5 "I refer to your letter, File No. 1374,dated 5th September, 1986,and wish to inform you that the notices issuedto your saidclienton 15thMarch, 1986,arenot newassessmentsbut infact they arenotices for thepayment ofthe amount of tax whichhadbeen assessedundertheassessments againstwhich recourse No.36/81 was filed. 10 15
  5. The sub judice assessments as issued on 17th November
  6. were affirmed by the decision of the Supreme Court. The question of payment of interest was not raised in the recourse and no mention is made in the judgment of the Court in this respect. Therefore, the sub judice assessments are in force as originally issued, including the dates of the calculation of interest. 20 '
  7. For the above reasons you are requested to advise your client"to settle the payment of the'tax"due and interest the soonest possible". 25 After the rejection of applicant's request his consultants addressed another letter to the respondent dated 24th October, 1986, repeating their request. Respondent by letter dated 6th November 1986,replied repeatingthecontentsof paragraphs1, and2of his previous letterto whichheadded the following: 30
  8. Your contention as per your letter that the Income Tax Office of Limassol refuses to issue new notices in respect of thepayment oftaxandinterestthereon isnot founded forthe reason that such notices were sent on 15.3.1986, in 35 accordance with the practice followed by this office notwithstanding that such assessments were the subjectmatter oftheassessments issuedon 17.11.1980andapproved • bythe Court on25.2.1986." 40 Counsel for the respondent by his opposition raised, inter alia,the following preliminary objections: 623 Savvides, J. Stamatiou v. Republic
(1989)"
  1. The act and/or decision complained of does not amount to anadministrative actor decision ofanexecutorynaturein the sense of Article 146.1of the Constitution as it ismerely confirmatory ofanearlier decision whichwascommunicated to the applicant on 17th November 1980, and as such it 5 cannot be made the subject of arecourse. 2.The present recourse isout of time as it was filed after the lapseoftheperiodof75daysprovidedbyArticle 146.3ofthe Constitution." In the course of theproceedings it wasagreed upon between the parties that such objections be dealt with preliminary to the hearing as their determination if in favour of the respondent, would decidethe fate of the present recourse. 15 Counsel for respondent in support of his preliminary objections submitted that the demand for the payment of tax and interest made under the Assessment notices sent to the applicant after the decision of the Supreme Court in Recourse 20 No. 36/81 dated 15th March, 1986,does not amount in fact to an administrative act or decision of an executory nature but is merely confirmatory of the original assessments issued on the 17thNovember 1980andassuch cannot bemadethesubject of a recourse. He further submitted that the present recourse 25 violates the doctrine of res judicata as the adjudication of the Court in the previous recourse of the applicant was an adjudication on the merits of thesubjudice assessments. Finally he submitted that in any event the present recourse is outside the time limits prescribed by the Constitution as the final 30 assessments were made on the 17th November,
  2. Counsel for applicant on the other hand submitted that Recourse No. 36/81 dealt only with the substance of the assessments and did not deal with the question of interest. He 35 further contended that thedisputeofinterestarose subsequently and the applicant's demand for its deduction was raised subsequently tothedecision oftheSupremeCourt and therefore the sub judice assessments could not be confirmatory of previous assessments nor the decision of the Court could be 40 treated as amounting to res judicata in so far as the interest is concerned. 624 10 3 C.L.R. Stamatiou v. Republic Savvides, J. From the material before me it isclear that the assessments of income plus interest on such assessments are the same both as appearing in the notices of Assessment of November, 1980, which were thesubject-matter ofRecourse No.36/81 aswellas 5 mentioned inthe"Assessment Notices"underCode8forwarded to the applicant on 15th March, 1986,demanding payment and described as "Final assessments following Court Order or settlement filter appeal totheSupreme Court".The assessments made in November 1980,which included both tax and interest 10 were affirmed bythe Court inRecourse No. 36/81 as "properly and correctly reached in accordance with the Laws and regulations in force." Though inthe judgment of theCourt nospecific reference is 15 made to interest, such interest wasin any event part and parcel ofthe assessments whichwerebefore theCourt,the correctness of which was approved. Iagreewithcounsel for therespondent that the"Assessment 20 notices" of March 1986, do not contain any new element or embodyanynewdecision buttheyaremerelyarepetition ofthe contents of the previous assessments. Assuch they are nothing more than confirmatory of the previous assessments and therefore, bythemselves donoamount to an administrative act 25 or decision of an executory nature in thesense of Article 146.1 of the Constitution. Furthermore once the original assessments whichwerechallengedbyRecourseNo.36/81werefound bythe Court as correct, the confirmatory assessments in respect thereof cannot be challenged once again as same became final 30 andconclusive bythedecision ofthe Court which inthisrespect became ares judicata. My above finding disposes of the present recourse as being untenable. 35 I shall proceed further however, on the assumption that the Assessment notices of 15th March. 1986,are new assessments. Such assessments were in any event final assessments. The applicant failed to challenge them within the period of 75 days 40 prescribed by the Constitution and after the expiration of six months he came forward requesting a deletion of the claim for interest.The respondent byhis letters dated 9th October, 1986, 625 Savvides. J. Stamatiou v. Republic
(1989)and 6th November 1986 informed the tax consultants of the applicant as to the legal position and requested them to advise theirclient to paythe amounts due.Itisclearfrom the contents ofsuchlettersthattheyaremerelyexplanatory and informatory of the position as it finalized as a result of the decision of the 5 Court in Recourse No. 3I/SO and do not embody any new decision.Therefore, assumingthatthenoticescommunicatedon the 15th March, 1986. were new final notices, the present recourse which was filed onthe26th November, 1986,isin any event out of time. In view of my above findings the present recourse cannot proceed andhas to be dismissed. In the result the recourse is dismissed with £100.- costs 15 against the applicant. Recourse dismissed with £100.· costsagainstapplicant. 626 10

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