The Commissioner of Inland Revenue, Hong Kong v. Ho Pui-yin and Others

DCCJ006112/1976

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NOS. 700, 6112 & 6187 OF 1976

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Coram: Judge Liu, Q.C. in Court.

Date of Judgment: 14th July 1977

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JUDGMENT

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1. In each of these three cases which have not been consolidated but have been heard one after another with submissions given perhaps not in the best sequence, all the defendants present have lent their full cooperation, and virtually the entire submission of counsel has by consent been treated as having been repeated in extenso in each set of these proceedings. I do not propose to give a separate judgment for each of these three actions as my oral judgment now delivered would be applicable to all three actions, the defendant in one of which, VCJ Action 700 of 1976, is absent today.

2. All three actions concern the claim of property tax by the Commissioner of Inland Revenue. Defences have been filed in each of these actions.

3. Initially I had before me VCJ Action 700 of 1976. I was somewhat baffled by the wording of section 70 of the Inland Revenue Ordinance, in particular by the words "as regards the amount of assessable income or profit assessed thereby". The terms "assessable income" and "assessable profit" are defined in section 2 of the same Ordinance. Suffice it for me to say "assessable income" relates to salaries tax and "assessable profit" relates to profit tax. Property tax is a slightly different kettle of fish, and it is based primarily on "ratable value" of the property which is now known as "assessable value". I was restive on a number of matters in which I have been greatly assisted by the very careful legal analysis of Mr. Edmonds in these proceedings.

4. The contention of the Commissioner may be summarized as follows:- Firstly, whilst it is conceded that "assessable value" is not specifically referred to in section 70, the intention to include "assessable value" is clearly reflected in section 7B of the Inland Revenue Ordinance. Section 7B was introduced in 1969 to cover the situation of a refund of property tax claimed by property owners, and section 70 is therein referred to explicitly. However, counsel bows to the wealth of authorities for the proposition that it is no part of the judicial function to supply an omission in a section however obvious it is or may be. Counsel further submits, alternatively, that section 70 which has no United Kingdom equivalent is in fact redundant and elaborates his learned submission thus: By virtue of decisions like R. v. Commissioners of Taxes, 7 (1913 - 1921) T.C. 49 at p.68 in which Avory J. cited with approval an observation of Baron Parke that "an assessment not appealed from stands in the same situation as one confirmed after appeal", even without the assistance of section 70 any assessment of property tax not appealed from or objected to within the time prescribed by the Ordinance would stand in the shoes of an assessment confirmed on appeal, and such assessment not appealed from or objected to is to be taken as final and conclusive. Thirdly, it is urged that section 70, redundant as it may well be, does not detract from the inhibition expressly laid down by section 75(4) of the Inland Revenue Ordinance. Under section 75(4), in proceedings for the recovery of property tax this Court shall not entertain any plea that the tax is excessive, incorrect, subject to objection or under appeal. Consequently, counsel contends that independent of section 70, section 75(4) prohibits the raising of the present defences by the divers defendants in these three actions.

5. I need not revert to the basic sections under the Inland Revenue Ordinance save that under section 64 a tax-payer has a month to raise an objection, thereafter under section 66 he has another month to lodge an appeal with the Board of Review, and as a last resort he could, on points of law, take the matter all the way to the High Court under section 69.

6. In my view, section 70 is indeed superfluous and redundant, which does no more than reiterating the legal consequences of an assessment not appealed from or objected to, and such assessment is final and conclusive for the purpose of suing for property tax in the District Court under section 75. I further take the view that under 75(4) none of the allegations raised by these defendants in their respective defences is a matter which can be entertained in the proceedings before the Court. Needless for me to say that there seems to be an obvious omission in section 70 to tie it up with section 7B, but it is certainly not for me to usurp the power of the legislature to supply the omission. It would seem that section 70 does not apply to property tax assessments which however are caught as far as court proceedings are concerned by section 75(4), a sub-section in clear and unambiguous language.

7. As far as the absent defendant in Action 700 is concerned, she has served no valid notice of objection, and that seems to be the end of the matter. Counsel's learned submission has persuaded me that the legal position assumed by the Commissioner today is undoubtedly correct and that there could be no room for any tenable arguments. If I were under the impression that arguments could be usually advanced on behalf of any of the defendants in favour of their causes, I certainly would invoke the assistance of the Bar Association and seek to have submissions made to this Court by an amicus curiae, but in the end I am so completely satisfied with the legal aspect by the submissions of counsel that I do not find it necessary to adopt the course I have just indicated. The Defence must obviously be struck out and judgment be given as claimed against the absent defendant with costs on the standard scale. Counsel has intimated that he would not, in these circumstances, press for a certificate for counsel, and I would make no order in that respect. I should mention in passing that in none of these actions has the assessment been challenged, and judgment against the defendants in these respective actions would follow as a matter of course if and after their defence is struck out.

8. As for the defendants in VCJ Action 6187, they claim to be the owners of the premises in question for a short duration of approximately half a year, and they maintain that the premises in question had throughout been left vacant. The defendants are debarred from raising the alleged vacancy by reason of the very fact that they have not served the requisite notice of objection. Insofar as their defence could be understood to refer to a claim for refund, as it has been pointed out by learned counsel, the prescribed period of 90 days has long lapsed. Consequently, their Defence must also be struck out, and judgment must be entered against them with costs also on the Standard Scale.

9. Lastly I turn to Action 6112. That concerns only the second-named defendant, Madam LO Shun-ho. She challenges the correctness of the assessment on the basis that it exceeds her previous assessment. She has given no valid notice of objection; nor naturally has she ever appealed. The same order must obviously be made against her:- Defence struck out and judgment as claimed with costs, in this case, on the Upper Scale.

10. Mr. Edmonds has assured the Court that in cases of proven hardship, he would probe into the matter to see if an ex gratia payment could be possible in these circumstances, and I am content to leave it in the hands of counsel who has proved to be as well competent as far throughout the proceedings.

11. Defendant, Madam Lo, in Action 6112 has, in her submission, touched upon matters in relation to a possible deferment in payment of the judgment debt. I am afraid she will have to make a separate application to that end.

Representation:

Mr. Edmonds, counsel for the Plaintiff.