The Inland Revenue Department’s failure to process an ex officio tax assessment for 27 years was yesterday ruled to be in violation of a firm’s right to access the courts and its fundamental right to a fair hearing within a reasonable time.
However, the Constitutional Court, which delivered the judgment on appeal, annulled the €30,000 that the first court had awarded to the company, John Geranzi Ltd, in compensation.
The IRD had issued the ex officio tax assessment in 1973, claiming an additional Lm7,912 (€18,434) in tax from the company as well as an administrative fine.
John Geranzi Ltd had appealed but it took the Commissioner of Inland Revenue 27 years to dismiss the objection.
It was only when the refusal was issued that the company was entitled to have recourse to the courts.
The First Hall of the Civil Court had awarded the company €30,000 in compensation for the delay.
The Commissioner then appealed to the Constitutional Court, composed of Chief Justice Silvio Camilleri, Mr Justice Giannino Caruana Demajo and Mr Justice Noel Cuschieri.
He said the delay in processing the company’s objection was due to its own failure to submit the necessary documentation at the appropriate stage.
The Commissioner also argued the law did not impose a time limit for processing an objection.
The Constitutional Court said it was true that the company might have contributed to the delay but this did not exonerate a Government department from the obligation of deciding a case with speed and efficiency.
A delay of 27 years could never be considered reasonable.
If the Commissioner thought the company was not cooperating, he ought to have issued a refusal of the objection so that the company could have recourse to the courts.
As the company’s right of recourse to the courts only came into being when the refusal was issued, it was tantamount to preventing it from accessing the courts.
The court noted that the Commissioner was requesting payment of €18,434 together with additional tax described as an administrative fine.
However, it annulled the award of €30,000 as well as the Commissioner’s ex officio assessment.
No interest was to run on any tax that might be deemed to be due by the company.