Appellant’s rights violated by VAT chief

A court yesterday ruled that it was a violation of fundamental human rights for someone appealing from a VAT assessment to have to pay five per cent of the tax in dispute in order to file his appeal.

Neil Carter had wanted to appeal from a VAT assessment raised against him by the VAT Commissioner for the period May 2003 to October 2004.

In order to do so, however, he had to pay five per cent of the tax in dispute together with an administrative fee of €58. All the tax that he was not contesting had to be paid as well.

Claiming that these charges were tantamount to a violation of his right of access to a court, and that he was being deprived of possession of his property, Mr Carter filed a constitutional case against the Prime Minister, the Attorney General and the Commissioner for VAT.

In his judgement delivered yesterday, Mr Justice Joseph R. Micallef held that it was not a violation of his right to property to have to pay the tax which was not in dispute. The 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 stipulating the cost of filing an appeal.

When Mr Carter filed his appeal, therefore, the costs of an appeal were not stipulated by law. As a result he was deprived of his property without any legal provision.

As to Mr Carter’s claim that he was deprived of access to a court, Mr Justice Micallef said 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 in order 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 court ruled. Imposing 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 ordered the Commissioner of VAT to refund Mr Carter the administrative fee as well as the five per cent tax in contestation that he had paid.


(2011-12-2/timesofmalta.com)