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| Sunday, 5 December 2004 |
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Applicability of the Evidence ordinance in appeal hearings In a series of articles former Deputy Commissioner of (Appeals) Department of Inland Revenue Cecil Aluthwela gives his observations on the article titled " On tax appeals - Some reflections" by Stanley Fernando (BA Ceylon) Attorney-at-Law Lecturer and Examiner in Tax Law, Council of Legal Education, Visiting lecturer in Tax Law, Faculty of Law, University of Colombo which appeared in the July 1993 issue (vol.1 No.1) of the Journal of the Institute of Taxation. These observations present different points of view which may be of benefit and interest to the tax paying public. The Inland Revenue Act (Sri Lanka) referred to is Act No 28 of 1979. The sections referred to are those in the Act. Continued from last week On the other hand assessments based on the ratio of petrol and oil to receipts of seven bus companies, whose names have not been divulged, which information has been obtained in camera, which information had not been subjected cross examination, have been considered valid evidence by the Privy Council. Further, the Privy Council concluded "that there was no breach of the principle of fair play and natural justice in putting them forward". Thus the only constraint within which the Revenue Authorities and the Revenue Tribunals have to act are the rules of Natural Justice. Apart from that, what evidence they receive, what evidence they act on, is their business. For instance in the course of an appeal hearing the Commissioner-General can under Section 117 (8) summon a third party totally unconnected with the appeal and hear him in evidence. The evidence he obtains is in camera. The third party is not exposed to any cross examination. If the Commissioner-General is convinced of the truth of the evidence so obtained he will put it to the appellant. If the appellant is unable to satisfactorily contradict such evidence the Commissioner-General in determining the appeal will take into account that evidence. Now can evidence obtained in this way be considered lawful evidence. In R.v.Offlow, Commissioners declined to hear an expert valuer and this action was upheld by Court. Further, what procedure they adopt is also their business, unlike in Courts where the procedure to be followed in civil and criminal cases is statutorily laid down. In the light of the above it is difficult to agree with Mr. Fernando that the Inland Revenue Authorities and the Board of Review are bound to determine the liability of a taxpayer only on the basis of lawful evidence. I derive further support for this stand of mine from the dicta of Dias J in the Case Gamini Bus Company Ltd.vs.Commissioner of Income Tax. "Our income tax officers are NOT expressly required to act on lawful evidence" (The emphasis is mine). |
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