Major amendments to tax laws may have to be passed after the Constitutional Court ruled, not for the first time, that VAT legislation is in breach of the fundamental right not to be tried twice for the same offence.
The judgment, which is subject to appeal, was sent to the Speaker of the House of Representatives for action to be taken by lawmakers. It joins similar rulings that have pronounced VAT and income tax laws unconstitutional.
“It is too early to say what the repercussions could be, although one could predict that the article that was deemed anti-constitutional would have to go,” said the lawyer behind the case, Robert Attard.
The arguments revolve around the ne bis in idem rule – that a person cannot be tried and punished twice for the same offence
Dr Attard’s legal arguments revolve around the ne bis in idem rule – that a person cannot be tried and punished twice for the same offence.
The court ruled that the VAT enforcement process does exactly this, as legal action can be taken against defaulters, who risk prison, even after they have been slapped with an administrative fine. Dr Attard, a leading tax lawyer, has raised the issue successfully in a number of other legal cases.
In two of them, the courts have reached a final decision, upholding his arguments.
He says it is possible that some of the people who have been made to serve effective prison terms did so “in terms of laws which violated the ne bis in idem principle”.
When contacted, he referred to the Constitutional Court’s decisions in cases instituted by John Geranzi Ltd and Angelo Zahra both of which, unlike the most recent judgment, are final.
However, neither of these judgments was sent to the Speaker for the law to be amended. The judges limited themselves to revoking the judgments of the Criminal Courts and awarding financial compensation.
In the latest case, a first-tier decision subject to appeal, Anthony Farrugia argued that article 83 (3) of the Value Added Tax Act infringed upon his human rights, because he was being punished twice for the same crime.
The article states that the institution of proceedings or the imposition of a penalty “do not relieve the person from prosecution and liability to the payment of an administrative penalty”.
Mr Justice Joseph R. Micallef confirmed that this article impinged on fundamental human rights and notified the Speaker, Anġlu Farrugia, of his decision.
The European Court of Human Rights has also ruled on the ne bis in idem principle in a number of judgments delivered in 2014 and 2015, which were connected to cases in other countries.
In all cases the court ruled that a person who infringes tax law cannot be subjected to two penalties for the same offence.