Supreme Court
Appeal No. 10 of 1978
19th March, 1979
Dickson, J.

Mr. R. Rajasingham, Q.C., for the Appellant
Mr. D. B. Courtenay for the Respondent

Appeal - Recovery of Income Tax - Recovery of Revenue Ordinance - Income Tax Ordinance - Whether matter was within competence of magistrate - Whether proceedings could be brought after expiration of period of 3 years - Appeal allowed - Matter was within magistrate's competence - Judgment of magistrate set aside - Case remitted to magistrate's court for rehearing.

J U D G M E N T

This is an appeal by the Commissioner of Income Tax from a judgment of a magistrate sitting in the Belize Judicial District, wherein the learned magistrate ruled that he had no jurisdiction to entertain the claim of the Appellant.

The magistrate was of the opinion that as the claim was in excess of $500, the matter was outside the competence of a Magistrate's Court, section 3 of the District Courts (Procedure) Ordinance, Chapter 11 (as amended by Ordinance 8 of 1970) indeed limits the jurisdiction of a Magistrate's Court in a civil action to any amount not in excess of $500. In his judgment the magistrate went on to say that, "had the claim been within the limit of $500.00 this Court would have entertained it provided proceedings were commenced before the expiration of (3) years from the day on which such sum became payable, as provided in section 12 of Chapter 42 (The Recovery of Revenue Ordinance)". It was conceded at the hearing before the magistrate and before this Court that the tax at the relevant time was in arrears for over a period of three years.

In summary Mr. Derek Courtenay, Counsel who appeared for the Respondent both before the magistrate and in this Court, contended that the Commissioner of Income Tax was seeking to recover arrears of taxes over a period of ten years after the taxes became payable, and that since section 67 (1) of the Income Tax Ordinance did not specify the time within which the Commissioner can bring proceedings, he was therefore debarred by section 12 of the Recovery of Revenue Ordinance which dealt with the method of recovering taxes by summary proceedings where a specified time is not stated in which to bring such proceedings. In brief, the Solicitor General who appeared for the Appellant, contended that section 12 of the Recovery of Revenue Ordinance did not apply to proceedings for the recovery of income tax.

It is quite clear that there were two issues before the magistrate. The first was whether the matter was within his competence. The second was whether the proceedings could be brought at that time after a period of three years had elapsed.

Section 61 of the Income Tax Ordinance, Chapter 38, provides:

"All taxes, penalties, costs or other amounts payable under this Ordinance, or under Rules made thereunder, are debts due to the Crown and recoverable as such in any court of competent jurisdiction or in any other manner provided by this Ordinance."

It is appropriate at this stage to refer to section 66 of Chapter 38. Subsection (1) reads:

"The Chief Collector shall, from time to time, issue to any person whom he may employ in the several districts as bailiffs for this purpose (hereinafter referred to as "bailiffs"), warrants directing and authorizing them in a manner hereinafter provided to make a levy upon the goods of all defaulters for the payment of taxes and fines thereon remaining unpaid for more than sixty days from the issue of the notice of assessment."

That section clearly gives the Chief Collector power to issue warrants against goods for the recovery of taxes. Section 67 provides for the suspension of a warrant issued under section 66, and in lieu thereof, for the Chief Collector to apply to the magistrate of the district in which the person in default is staying for a Summons directing the defaulter to show cause why he should not be ordered to pay the amount for which the warrant was issued. It appeared that the Respondent came before the magistrate by the operation of section 67.

It is also clear that the magistrate was not saying only that the claim was outside his competence for the reason that it was in excess of $500.00, but also that although the Statute of Limitation did not apply, in view of section 12 of Chapter 42, in as much as the Respondent was in arrears for a period of over three years prior to the application, the procedure under section 67 was not open to the Chief Collector. Section 12 reads:

"When by any legislation now or hereafter in force, it is provided that any tax, rent, fee or other sum payable to the Government or to any Government institution or officer or to the Belize City Council or any District Town Board or other local authority shall be recoverable in a summary manner, then, unless a specific time is stated in such legislation within which summary proceedings shall be commenced, such proceedings may be commenced at any time before the expiration of three years from the day on which any such sum became payable."

It is true that the Recovery of Revenue Ordinance is older in time than the Income Tax Ordinance. Opening words of section 12 of Chapter 42, "When by any legislation now or hereafter in force, it is provided………..", purport to apply to legislation enacted before or after Chapter 42. The Solicitor General quite rightly said that he was not going to argue that section 12 does not apply to income tax claims purely because it came earlier, for it was not necessary for the purposes of this case. But in my view, he correctly stated that section 12 does not apply to the procedure set out in section 67 of the Income Tax Ordinance. He gave his reason for saying that. After due consideration I find it compelling. He submitted that section 12 of Chapter 42 does not state a particular Court, it states the procedure. It does not say "a Magistrate's Court" or "the Supreme Court". All it does is to refer to recovery "in a summary manner". As I see it, on a proper construction it applies to wherever tax is recoverable in a summary manner, and if there is no time specified in any law for the recovery of tax, then the three years limit applies. In short, there are two prerequisites:

(1) it applies to the recovery of tax in a summary manner;

(2) under a law which does not have a time limit.

The word "shall" in the fifth line of section 12 is, in my opinion, mandatory and not permissible. It comes to this, that section 12 applies when any law says that the tax will only be recoverable in a summary manner, and therefore would not apply to any law in which a tax is recoverable both in a summary manner or in some other manner. It is patent from section 61 of the Income Tax Ordinance that the Commissioner can sue in any Court as a civil debt or recover "in any other manner provided for" in the Income Tax Ordinance.

It seems that when section 12 of Chapter 42 speaks of "summary manner", that it is referring to a particular procedure available under the law, namely the procedure available under the Crown Proceedings Ordinance, Chapter 17 and not to the colloquial understanding of "summary manner"; and where there is in our law a procedure for recovery in a summary manner of the very self same tax, it is that procedure that is being described by section 12. The words "in any other manner provided by this Ordinance" in section 61 should not, as submitted by the Solicitor General, be understood as exclusive of proceedings in Court for it is only by giving it a wider meaning that the proceedings in section 67 will make sense. Section 67 reads:

"Notwithstanding the name of a person who has made default in the payment of the tax shall have been included in a list to any warrant authorizing a levy as provided in the last section, it shall be lawful for the Chief Collector at any time that such tax remains unpaid to cause the operation of the said warrant to be suspended as against such defaulter and in lieu thereof to apply to the Magistrate of the district in which the person in default is for the time being staying or residing, for a summons directing the defaulter to attend before such Magistrate, at a time to be named in the summons, to show cause why he should not be ordered to pay the amount aforesaid, as a judgment debt, and it shall be lawful for the Magistrate to issue such summons and cause the same to be served and to deal with the defaulter in such manner as is next hereinafter provided."

Section 67 speaks of the Chief Collector making an application to the magistrate at any time. If it is interpreted to mean that he can apply to the magistrate for only $500 or less, there is no other way in which he can apply to another Court for more than $500 under that section. The Legislature could not have intended that limitation when sections 66 and 67 are properly construed. There is no mention of any limit in both these sections. If the Legislature had intended that the proceedings were to be limited to the magistrate's jurisdiction, it means in effect that they were saying that if tax is $500.00 and under, you can seize the man's goods or bring him before the Court and have him imprisoned, but if over $500.00, you cannot do any of those things. There is nothing in section 67 which justifies that restrictive construction. Indeed, the competence of the court is given by that section. It is abundantly clear from the provisions of section 67 that no limitation is placed on the quantum; and furthermore, the self same section says, "it shall be lawful at any time that such tax remains unpaid to cause the operation of the said warrant to be suspended." The phrase "at any time" is significant in the context of the section. By saying that the Chief Collector may make an application at any time, and therefore, being an Ordinance passed later in time than Chapter 42, it excludes the application of the time limit in section 12. To place a limitation on time within which the Commissioner may invoke section 67, and similarly a limitation on the quantum would do violence to the provisions of the section. Such restrictions cannot be implied from the tenor of its provisions. If section 67 is to be read as meaning within three years, then we get this curious position: it would mean that under section 66 the Chief Collector could avail himself of the remedies stated therein after three years had elapsed, but cannot do so through the Court as stated in section 67. If tax is unpaid for three years or more, he can seize the goods of the defaulter but cannot come to the court under section 67. That is the effect of Mr. Courtenay's submission. The legislature could not have intended such a ridiculous situation.

Section 9 of Chapter 42 reads:

"All dues and taxes, other than import duties, imposed or to be imposed by any law, shall and may be recovered upon summary conviction on information laid by the Financial Secretary or any person to him duly authorized."

The phrase "All dues and taxes" suggests that there is no limit as to what can be recovered in a summary manner. Secondly, it suggests that the tax may be recovered by proceedings which are in effect criminal proceedings.

I am attracted by the submission that the procedure set out in sections 67 to 70 inclusive of Chapter 38 is not that of a magistrate acting in his civil jurisdiction, but acting within his criminal jurisdiction or his jurisdiction relating to enforcement. In the District Courts (Procedure) Ordinance, Chapter 11, "Action" is defined as meaning "any proceedings commenced by a plaint in the Court". It is self-evident that the proceedings under section 67 are not commenced by a plaint. When one reads sections 66 to 70, it portrays an execution or enforcement procedure, in particular section 69 (3).

For the reasons stated above, the application under section 67 of Chapter 38 was within the magistrate's competence. The appeal is therefore allowed, and the judgment of the magistrate is set aside. It is ordered that this case be remitted to the Magistrate's Court for rehearing under the provisions of section 67 of the Income Tax Ordinance in accordance with the terms of this judgment. As the magistrate who heard the application is now in private practice, any magistrate designated by the Chief Magistrate will rehear the case.

----------OO----------