It was a violation of fundamental human rights for an appellant from a VAT assessment to have to pay five per cent of the tax in dispute to file his appeal, a court has ruled.
Mr Justice Joseph R Micallef delivered this judgment in a constitutional case filed by Neil Carter against the Prime Minister, the Attorney General and the Commissioner for Value Added Tax.
Mr Carter told the court that he had wished to appeal from a VAT assessment raised against him by the VAT Commissioner for the period between May 2003 and October 2004.
But to file the appeal, he had to pay five per cent of the tax in dispute together with an administrative fee of €58 for each appeal. The tax not in dispute also had to be paid.
He claimed that these charges were tantamount to a violation of his right to access to a court and that he was being deprived of possession of his property.
The court held that the fact that Mr Carter had to pay the tax which was not in dispute was not a violation of his right to property. The tax consisting in VAT that Mr Carter had collected was not his property for he had collected it on behalf of the government.
However, the law stipulating the administrative cost of filing an appeal had come into effect after Mr Carter had filed his appeal in 2009. It was only in 2010 that a legal notice was enacted which stipulated the cost of filing an appeal.
Consequently, when Mr Carter had filed his appeal there was no law that regulated the costs of an appeal. Mr Carter had, therefore, been deprived of his property without any legal provision.
When referring to Mr Carter's claim that he was deprived of access to a court, Mr Justice Micallef said that the law provided for an appeal from a VAT assessment raised by the VAT Commissioner.
But Mr Carter's complaint was primarily based on the fact that he had to pay five per cent of the tax not in dispute to lodge his appeal.
This percentage had been reduced from the former percentage of 25 per cent, but it still constituted a violation of Mr Carter's human rights.
The imposition of this condition meant that in order to file an appeal, an appellant had to pay part of the tax he was contesting and which formed part of the merits of his appeal.
The payment had to be made before a decision on whether or not the tax was due had been delivered. This was tantamount to a violation of the right to access to the courts.
After declaring that the Prime Minister ought not to have been a party to the suit, the court ruled that Mr Carter's human rights had been violated.
The Commissioner of VAT was ordered to refund to Mr Carter the administrative fee that had been levied for the filing of the appeal as well as the five per cent tax in contestation that Mr Carter had paid.