002-NLR-NLR-V-45-VALUE-v.-COMMISSIONER-OF-INCOME-TAX.pdf
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Value v. Commissioner of Income Tax.
1943Present: Jayetileke J.VALUE v. COMMISSIONEH OE INCOME TAX.
In the Matter of an Application for a Writ of Mandamus.
Income Tax Ordinance {Cap. 188) s. 2—Power of Commissioner to appointauthorised representative—Rightto revokeapproval—No publicinquiry
necessary—Writ of Mandamus.
The definition ofthe expression “ authorisedrepresentative” in
section 2 of the Income Tax Ordinance implies that the Commissioner haspower to approve or disapprove of a person as an authorised representative.
The Commissioner has also power to revoke his approval if the personapproved subsequentlybecomes unfitto continueas an approved
representative.
"Wherean application is madefor his approval thereisalegal duty
imposeduponhim to exercisehis discretion judiciallyand his decision
is notliableto be controlledby the Supreme Courtifhehas acted
fairly and honestly.
The Commissioner is not bound to frame a charge and hold a publicinquirybeforehe withdraws hisapproval of a personasanauthorised
representative.
T
HIS was an application for a writ of Mandamus on the Commissionerof Income Tax.
Suntheralingam in support.••
' H. H. Basnayake, G.G., for Attorney-General, respondent.
Cur. adv. vult.
JAYETH/EKE J.— Value o. Commissioner of Income Tax.
f
November 25, 1943. Jayetideke J.—
The petitioner obtained from this Court a rule for a mandamus tocompel the Comrhissioner of Income Tax ‘ ‘ to withdraw His decision ascommunicated by his letter dated December 23,1941 By that
letter the Commissioner informed the petitioner that for the reasonsstated by him at an interview he had decided to withdraw the petitioner’sapproval as an authorised representative under .tbe Income Tax Ordinancefor the year 1942-1943 and subsequent years.
In 1932 the petitioner was approved by the Commissioner as anauthorised representative and he functioned as such till 1941. On March.20, 1941, Mr. Paulusz, an assistant assessor in the Department of IncomeTax, made an assessment on A. S. S. Sangaralingam Chettiar for theyear 1937-1938. On April 16, 1941, the assessee appealed against theassessment. Thereupon the Commissioner made an order under section76 (2) of the Ordinance that payment of the tax be held over pending theresult of the appeal. On August 1, 1941, the Commissioner cancelledthe said order as the appellant failed to take the necessary steps toprosecute the appeal.
On December 15,1941, the petitioner had an interview with
Mr. Paulusz on behalf of the assessee in connection with the appeal.Mr. Paulusz says that at the end of the interview the petitioner said—“ If you like any little thing—this is not from me but they asked me toask you—they w.ill let you have it.”
Mr. Paulusz understood this to be an inquiry whether he would acceptan illegal gratification from the assessee and he promptly reported thematter to his immediate superior, Mr. Burah, who called up the petitionerand asked him for an explanation. Mr. Burah says that the petitionertold him that he could not recollect the exact words used by him butwhat he wanted to convey was that he was willing to give any furtherinformation. Mr. Burah was satisfied as to the truth of Mr. Paulusz'scomplaint and he reported the matter to the Commissioner.
Exhibit C is a note of an interview the Commissioner had with thepetitioner about the complaint. It is dated December 23, ’ 1941, and itreads: —‘ ‘ I inquire from him what his explanation is of the complaintmade by Mr. Paulusz. He states that this case had been previouslydealt with by another accountant and that after he was engaged theassessor worried the client a great deal and there was great delay insettling the case. His client had said that perhaps it may be becausethe assessor wants money from them. When he saw Mr. Paulusz hementioned this but before he could finish what he was saying Mr. Pauluszgot excited and took him to Mr. Burah.”
The Commissioner referred to the file and found that there was nodelay on the part of .the assessor but it was the petitioner who was delayingand asking for time. He also found that there.was nothing to indicatethat the assessor was in any way worrying the assessee and that he wasonly inviting his attention to the appeal and asking for figures.
He thereupon made the following Order:—“ I have no doubt thatMr. Paulusz’s version is the correct one, and that Mr. Value had attemptedto make a suggestion that his client was willing to give a present to theassessor if he would settle the appeal in their* favour. I consider this a
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JAYETILEKE J.—Value t>. Commissioner of Income Tax.
very serious offence. An approved accountant who coqld make such asuggestion is totally unsuitable to be kept on the list. In File 21/96this same accountant made an improper request to an assistant assessorthat he should make an estimated additional assessment on a clientso that the accountant may be given the opportunity of recovering hisfees. I consider Mr. Value unfit to be continued as an approved account-ant and accordingly withdraw approval.”
On December 23, 1941, by his letter quoted in para 7 of the petitioner’spetition the Commissioner informed the petitioner that he had decidedto withdraw his approval and that no accounts prepared by him for1942-1943 or subsequent years would be accepted and that he will notbe permitted to represent his clients for Income Tax purposes.
Thereafter the petitioner did nothing till May 29,1942, when he
wrote the letter marked D to the Commissioner. In that letter he states : —
‘ ‘ I took your decision, Sir, and, without appearing to question it now,
would respectfully urge on you that it was made on the uncorroboratedtestimony of one person, in each instance, in respect of two allegedstatements made by me. I do not say, Sir, that it is not competent foryou .to do so. I only pray that you will consider the possibility of amisunderstanding on the part of Mr. Paulusz who first complainedagainst me
This letter contains an ad mis ericordiam appeal to the Commissionerto reconsider his decision. It seems to me that what the petitionerwanted the Commissioner to do was to make a fresh order approving himin view of his long connection with the Department. That is the onlyreasonable interpretation that can be placed on the letter having regardto the fact that the petitioner stated that he accepted the Commissioner’sdecision.
The Commissioner presumably refused to accede to the petitioner’srequest and the latter thereupon interviewed the Commissioner withCounsel. The note of the interview, X, shows that the attitude takenup by the petitioner at the interview was different from that taken -upby him in the letter D. Counsel seems to have urged that a formalcharge should have been framed against the petitioner and a full andproper inquiry held.
The Commissioner considered the points raised and decided to adhereto .the order made by him on December 23, 1941. The petitioner madethe present application on November 3, 1942. At the very outset Imay say that one of the principal general rules applicable to mandamusis that the Court will refuse to grant it unless the application is made inproper time. In my opinion there has been in this case an unreasonabledelay in making the application. The order complained of was madeby the Commissioner on December 234 1941, and the present applicationwas made on November 3,- 1942.
The writ of mandamus is a high prerogative intended for the purposeof supplying defects of justice. It is founded upon a passage of MagnaCarta that “ the Crown is bound neither to deny justice to any man norto delay any man in justice.”
JAYETILEKE J.—Value v. Commissioner of Income Tax.9
In re Application for a Writ of Mandamus on the Assistant GovernmentAgent, Uva1, Abrahams C.J. said: —
“ the petitioner must show that the officer against whom the remedyis prayed for has infringed a right or, to put it another way, that anofficer who is under a duty to do something on his behalf has refusedto do so.”
The petitioner alleges in his petition that what he told Mr. Pauluszwas that ‘‘his client wished to know whether by withdrawing the stand-over order the officer concerned expected something”. His complaintseems to be that the Commissioner did not give him an opportunity ofestablishing his defence by cross-examining Messrs. Paulusz and Burah.
At the argument before me Mr. Suntheralingam contended that theCommissioner had no power to revoke his approval and that if he hadthe power he could only exercise it after a proper inquiry.
There is no express provision in the Ordinance which confers on theCommissioner the power to approve or disapprove a person as a*>authorised representative.But the definition ofthe expression
“authorised representative” in section 2 presupposes such a power,which, in the absence of an express provision, must be taken to beimplied.
Having regard to the general scheme of the Ordinance and the natureof the work an authorised representative is permitted to do, which isspecified in sections 71 and 73 (2) of the Ordinance, I am inclined to theview that the Legislature did not intend that the Commissioner shouldgive his approval for all time but only for the particular year of assess-ment. A fresh approval is therefore necessary for the subsequent year.
As the Ordinance does not provide that the approval should be givenin a particular form a person who hais been previously approved is]entitled to assume that he has been approved for the subsequent yearunless the Commissioner informs him that he has decided to withhold hisapproval.
The question arises whether the Commissioner has no power to revokehis approval if the person approved subsequently becomes insane or isfound to be incompetent or guilty of fraudulent or corrupt practices orotherwise becomes unfit to continue as an authorised representative.
think such a power is inherent in the absence of anything to thecontrary in the Ordinance. The approval amounts to no more thanpermission given by the Commissioner to an accountant to represent ataxpayer for the purposes mentioned in sections 71 and 73 (2) of theOrdinance.
The word used in the Ordinance is “approved” and that impliesthat the Commissioner is invested with a discretion to approve or not.The taxpayer is given the right by sections 71 and 73 (2) to do certainahts through the medium of an authorised representative.When an
application is made to the Commissioner for his approval I think there isa legal duty imposed on him to exercise his discretion judicially. Inthe words of Lord Mansfield in Rex v. Askew2, “ the discretion must beexercised in a manner fair, candid and unprejudiced and not arbitrary,1 39 N. Tj. R. 450.* 4 Burr. 2189.
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JATETIXjBKE J.— Value v. Commissioner of Income Tax.
capricious and biassed, much less coupled with, resentment or personaldislike”.
tr
His decision is not liable to be controlled by this Court if he has actedfairly and honestly.
In Smith v. Chorley Rural Council1, Hopes L.J. said: —
“ The rule applicable to such a case is that the exercise of thediscretion of a tribunal, however erroneous it may be, upon a questionjvithin its jurisdiction and when honestly exercised, cannot bequestioned. Any other conclusion would lead to this—that althoughthe Legislature has entrusted to a local tribunal a discretion as to aparticular matter which they consider, and as to which they honestlyexercise their discretion, still the Court would direct them to exercise'their discretion in a different way-—aresult which in my opinion
would be absurd.”
The only other question is whether the Commissioner should haveframed a charge against the petitioner and held a public inquiry. Thisquestion was considered in the King v. Archbishop of Canterbury2, wherethe right of approving a fit and proper person to an endowed lectureshipwas by statute vested in the Bishop of the Diocese. Lord Ellenborough
J. said: —
‘ ‘It has been urged, however (and much stress was laid upon itin the argument), that it was the duty of the bishop to have institutedhis inquiry upon the subject, in the manner and by the means usuallyadopted in Courts of Law, that is, by the formal production of thecharges made against the applicant in a judicial course, and by apublic and solemn hearing of the several parties, their proofs andwitnesses. But in the first place, what power has the bishop to compelthe attendance of parties and witnesses? What power has he toadminister an oath ? or what word is there in the Act of Parliamentthat prescribes the mode by which he shall attain a conscientioussatisfaction on the subject ? It only requires him first to approve,that is, before he licenses; and in so doing, it virtually requires him toexercise his conscience duly informed upon the subject; to do whichhe must duly, impartially, and effectually inquire, examine, deliberate,and decide”.
The same view has been taken by the House of Lords in Board ofEducation v. Rice3, and Local Government Board v. Arlidge4.With this
view I am in respectful agreement.
On the materials before me I am unable to say that the opinion formedby the Commissioner was not fair and honest, or that he did not give thepetitioner a fair hearing before making his order. Whether it wasproper for the Commissioner to withdraw his approval was a questionfor him and not for me to determine. The Legislature has left the decisionof that question to him. All I have to decide is whether he has honestlyexercised his discretion and I am of opinion that he has.
The rule is discharged with costs.
Rule discharged.
1 (1897) Q.B.D. 678.3 (1911) A. C. 179.
* 15 East. 789.* (1915) A. C. 120.