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Fish farm loses challenge against retroactive tax

Payment under protest of €117,645 will now stand

A fish farming company has lost its bid to attack the validity of a legal notice ordering the payment of €117,645 in retroactive fees on tuna catches, since such subsidiary legislation did not qualify for administrative review before the Courts.

Malta Fish Farms Ltd (MFF) had filed civil proceedings against the Minister for Sustainable Development, Environment and Climate Change and the Director General of the Department of Fisheries and Aquaculture back in April 2016.

The action was sparked off by a letter from the Department in October 2015 ordering the fish farm operator to pay €117,645 in retroactive fees on some 511 tonnes of tuna in terms of subsidiary legislation introduced under the minister’s hand.

In spite of forking out the said sum, the company did so under protest, arguing that the relevant legal notice was ‘ultra vires’ (beyond the minister’s powers) since it had been issued under a law which had since been repealed.

The law gave no power to the minister to issue pecuniary regulations in a retroactive manner, the company argued, in line with a fundamental principle that taxes could not be retroactive.

For this reason, MFF Ltd filed a civil suit claiming a refund of the money paid to the department which, in turn, countered that the article of law permitting administrative review could not serve as a valid basis to attack this legal notice.

The First Hall, Civil Court, presided over by Mr Justice Mark Chetcuti, observed that such subsidiary legislation, though issued by the Minister, did not qualify as a ministerial order but was a legislative instrument enacted under the authority of Parliament.

Reference to English jurisprudence - "although a wealthy source, could not be deemed as indisputable and automatically applicable to the Maltese legal scenario", the Court remarked.

The legal notice did not constitute an administrative act subject to judicial review in terms of the law upon which the applicant had based its case, and the court therefore declared the action null.

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