The Constitutional Court yesterday upheld an appeal filed by a company and ruled that a provision of the Income Tax Management Act was in violation of a company's fundamental human rights.

Pig Breeding Co. Ltd filed its constitutional application in the First Hall of the Civil Court. It claimed that in 1998 it had objected to an estimate raised in respect of the years from 1994 to 1997 by the Inland Revenue Department. Its objection had been dismissed by the IR Commissioner and the company had then appealed to the Board of Special Commissioners.

In 2002 the board had dismissed the appeal on the grounds that the company had failed to pay the tax that was not in contestation prior to filing its appeal, as this ran counter to the provision of section 35(1) of the Tax Management Act.

The company submitted that this provision of the law was in violation of its fundamental human right to a fair hearing and to its right to an effective remedy. The First Hall of the Civil Court had dismissed the company's application and found that the constitutional right to a fair hearing was not applicable in respect of the state's actions to impose and collect taxes.

On the other hand, the state was bound to observe other rights of the taxpayer, including the right to have a legal basis for the imposition of a tax and freedom from discrimination.

The company appealed to the Constitutional Court composed of Chief Justice Vincent Degaetano, Mr Justice Joseph D. Camilleri and Mr Justice Joseph Filletti.

The court found in favour of the company and declared that the imposition of the condition of payment prior to submitting an appeal was in violation of the company's right to a fair hearing.

The court therefore annulled the decision of the Board of Special Commissioners and declared that the proviso to section 35 of the tax management act was null and void. The court also ordered a copy of the judgment to be remitted to the House of Representatives.

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