042-SLLR-SLLR-2003-1-CREST-GEMS-LTD.-v.-THE-COLOMBO-MUNICIPAL-COUNCIL.pdf
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CREST GEMS LTD.v
THE COLOMBO MUNICIPAL COUNCIL
COURT OF APPEAL .
TILAKAWARDANE, J. (P/CA)
CA No. 41/2002SEPTEMBER 16 ANDNOVEMBER 18 2002 ANDJANUARY 29. 2003
Municipal Councils Ordinance, sections 247(A), 247(B), 247(C), 247(10)A,247(1) and 247(C)( 1) – Levy ot tax in respect ot maintaining an otfice for buy-ing, selling and exporting gems and jewellery – Recoveriy of taxes -Inconsistency between English and Sinhala versions, which prevails ?Karmanthaya (Industry) and Veladama (Trade).
The petitioner is a company buying and exporting gems and engaging in otherexport related activities. The respondent sought to levy and impose tax for car-rying on an office for trading activities and a place for the sale of gems and dia-monds. The petitioner refused to pay the purported tax on the ground that theMunicipality had no jurisdiction to levy the tax, and sought to quash the noticerelating to the recovery of tax.
Held.
Section 247B empowers a Municipal Council to impose and levy taxon any trade carried on within its administrative limits; the Sinhalaversion of the Ordinance empowers a Municipal Council to imposeand levy such tax on any KaramanthayeT.
If there is an inconsistency between the English and Sinhala versions,then the Sinhala version prevails.
(iiij The activity of the petitioner is a trade or “Veladama" in Sinhala and. does not fall within the meaning of the word “Karmanthaya”; since thepetitioner does not manufacture in the said place, no tax under sec-tion 247B could be levied.
(iv) Section 247(C) empowers a Municipal Council to impose and levy taxon businesses and professions.
It is clear that Parliament never intended sections 247(A), 247(B) and247(C) to overlap but to be mutually exclusive.
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(v) The Municipal Council could recover under section 247(A)(1) and247(C)(1) and not under section 247(B).
APPLICATION for writs of certiorari and mandamus
Cases referred to:
Ramsay v C.I.R. -54-TC 101,1981 1 All ER 872AL
Rawlings v Elibeck – (1980) 2 All ER 12
Faisza Markar for petitioner.
Upul Jayasuriya for respondent.
Cur, adv, vult.
May 05, 2003
SHIRANEE TILAKAWARDANE, J.
Parties have agreed that the Judgment will be delivered byHon. Shirane.e Tilakawardane, J.
The petitioner has preferred this application seeking a man-date in the nature of a writ of mandamus compelling the respondentto act in terms of the Municipal Council Ordinance when recoveringtaxes thereunder from the petitioner.
The petitioner (Crest Gems Ltd) is a company for buying andexporting gems arid other export related activities. The respondent,Municipal Council of Colombo, sent notices (marked P1a and P1b)dated 08/08/2001 to the petitioner purporting to levy and imposetax for carrying on an office for trading activities and a place for thesale of gems and diamonds. The petitioner by letters dated15/08/2001 refused to pay the purported tax on the ground that theMunicipality had no jurisdiction to levy this tax in respect of main-taining an office for buying, selling and exporting gems and jew-ellery and engaging in other export related activity under section247B of the Municipal Councils Ordinance.
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The only issue is whether the Municipal Council has thepower to impose and levy tax under section 247B.
“A Municipal Council may impose and levy a tax on any tradecarried on within the administrative limits of that council.”
This particular section empowers a Municipal Council toimpose and levy tax on any trade carried on within the administra-tive limits. However the relevant section of the Sinhala (official lan-guage) version of the said Ordinance empowers a MunicipalCouncil to impose and levy such tax on any “karmanthaya” carriedon within the administrative limits thereof.
“247 CfO (1) C3@ @50 25)S)d £3503025) 03(325) $®0 2£<§ 25)d 6025) 025) OcD25)8®325fe)c3255 60g602j52§?0@ <325)30 ^O 2§8© d @20 25)S)d £35030
Sfi2rf 25)® c»O.”
Therefore there is an inconsistency between the English andSinhala versions of the said Ordinance and where there is aninconsistency between the English and Sinhala language versionsthe Sinhala language version prevails.
It has been submitted that the notices of the respondentseeking to recover from the petitioner the tax under section 247B ofthe Municipal Councils Ordinance for carrying on activities of main-taining an office for trading is ultra vires for the reasons that thepetitioner maintains an office only for buying and selling of gemsand jewellery. This activity is a trade or “velandama” in Sinhala anddoes not fall within the meaning of the word “karmanthaya” sincethe petitioner does not manufacture in the said place.
Sections 247A(1) and 247C(1) read as follows:
247(A)(1) “A Municipal Council may impose and levy a dutyin respect of licences issued by the Council.”
247(C)(1) “A Municipal Council may by resolution imposeand levy annually on every person, who within the adminis-trative limits of such Council, carries on any business forwhich no license is necessary under the provisions of thisOrdinance or any by-law made thereunder or any tax ispayable under section 247B, a tax according to the taking ofthe business for the year proceeding the year in which suchtax is payable.
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Crest Gems Ltd v. The Colombo Municipal Council
miakawardane. J.)
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For the purposes of this section:
(a) business includes any trade or profession or calling or thebusiness of a manufacturer, or of any person taking com-mission or fees in respect of any transaction or services ren-dered or the business of an independent contractor butdoes not include the occupation of maintaining any educa-tional establishment or school to which.grants from statefunds are paid or to which such grants were earlier paid butat present are not paid.”
Section 247(C) of the Municipal Councils Ordinance empow-ers a Municipal Council to impose and levy tax on businesses andprofessions. It is clear that Parliament never intended sections247(A), 247(B) and 247(C) to overlap but to be mutually exclusive.In other words, no person shall be liable to pay a duty, tax or levyfor the same business under the above sections.
As has been submitted the Department of Official Languageshas prepared a glossary of standard legal terms and the word“industry” is such as “trade” “industry” and “business” are used inlaw with very specific meaning and have achieved a legal clarity.
The learned counsel for petitioner has submitted that in the
case of K. Kaggodaarachchi v Perera the learned High CourtJudge held that the word “karmanthaya” in section 247(B) means“industry” and the person carrying on “trade” does not fall withinthat section.
S. Balaratnam in “Income tax, wealth tax and gift tax in SriLanka” (2nd edition) quoted Lord Justice Clerk as having held:
“No subject can be taxed unless the crown can find a clearlycharging section and once that is found, the subject cannotescape taxation unless he can find a clearly exempting sec-tion.”
The cases of Ramsay v CIFf(1) and Rawlings v Elibeck<2)have been cited by the author in page no. 1 of the said book where-in Lord Wilberforce reviewed the principles adopted by the court in
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interpreting taxing statutes and identified four basic rules of con-struction in interpreting the taxing statutes. One such rule is as fol-lows:
“A subject is only to be taxed upon clear words, not upon
intendment or upon the “equity of an act….”
Therefore in the absence of clear words in the statute or dueto the inconsistency between the Sinhala and English, versions ofthe said Ordinance the notice issued by the respondent to the peti-tioner purporting to recover tax on trading activities is deemed asnull and void.
Accordingly this Court issues a writ of certiorari quashing thenotice dated 08/08/2001 issued by the respondent to the petitionerrelating to the recovery of tax for the year 2000 for the carrying onof an office for trading activities and sale of gems and diamonds at142A, Kollupitiya Road, Colombo 3, in terms of section 247B of theMunicipal Councils Ordinance and issues a writ of mandamus forrecovery only in terms of the Municipal Councils Ordinance as setout above.
The petitioner’s application is allowed with costs in a sum ofRs. '5000/-.
Notice issued under section 247B only quashed; writ of man-damus issued to act in terms of the Municipal Councils Ordinance.