Chan Chun Chuen v. The Commissioner of Inland Revenue

FAMV No. 23 of 2012

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 23 OF 2012 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL
FROM CACV NO. 113 OF 2011)

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BETWEEN

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D E T E R M I N A T I O N

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Mr Justice Chan Acting CJ :

1.At the hearing, we dismissed the application for leave to appeal with reasons to be given later. These are our reasons.

2.The applicant commenced the present judicial review proceedings against the refusal by the Commissioner for Inland Revenue to extend time for him to raise objection to 23 property tax assessments (totaling $631,784) and 2 profit tax assessments (totaling $330.24 million). He was successful before Reyes J but that decision was reversed by the Court of Appeal (Cheung and Hartmann JJA and Lam J). In applying for leave, the applicant relies on the point of law and the “or otherwise” grounds.

3.The point of law ground seeks to challenge the constitutionality of the scheme for service of notices of assessment and the raising of objection to assessments under the Inland Revenue Ordinance, Cap 112. This was not a point which was raised or decided in the courts below and no reason has been given as to why this new point should now be permitted to be taken on appeal. Although it is relied on by the applicant in the Notice of Application and his written submissions, this is not pressed by counsel at the hearing. In any event, we do not think it is reasonably arguable and nothing more needs to be said on this ground.

4.On the “or otherwise” ground, Mr Edward Chan SC for the applicant contends that the Commissioner’s decision was flawed and that it is arguable that the Court of Appeal was wrong to set aside the judge’s order quashing the Commissioner’s decision. The applicant’s case for his late objection to these assessments was that he never received the notices in question until after he had come to know of the recovery proceedings. This was the only reason given by him in seeking extension of time from the Commissioner. It is accepted that the Commissioner had sent the notices of assessments in question to the applicant’s last known address which was the address of a firm of solicitors, Kao Lee & Yip (“KLY”), the address used in the applicant’s previous tax returns. KLY initially asserted that they had not received these notices but this was contradicted by the evidence that the tax assessments were sent to that address either by ordinary post and were never returned as undelivered or by registered mail with an acknowledgement of receipt from that firm. KLY then explained that they had an arrangement with the applicant whereby upon receipt of any letter addressed to the applicant, KLY staff would telephone the applicant’s representatives to send someone to come and pick it up. However, KLY staff could not now recall any letter which might have been passed through them to the applicant.

5.Mr Chan submits that in refusing to extend time, the Commissioner wrongly focused on the fact that the notices of assessment had reached the KLY address, but had failed to consider that it might be possible that there was a break down in the arrangement between the applicant and KLY resulting in the applicant not actually receiving the notices in question.

6.This submission is not supported by the evidence. It is clear that the Commissioner did not base her decision merely on the fact that the notices had reached the KLY address. She had also taken into account (as she was entitled to) that the applicant had chosen to use the KLY address and that previous assessments sent to that address were settled by the applicant. It is the duty of the applicant to notify the Inland Revenue Department of any change of address (s.51(8)). The Commissioner was entitled to draw the inference that the arrangement adopted by the applicant would ensure any correspondence addressed to that address would reach him. The applicant had the burden of showing that there was reasonable cause which had prevented him from raising objection within time (see the proviso (a) in s.64(1)). It was not for the Commissioner to speculate whether the arrangement made by the applicant for receiving notices did or did not work or why it may not have worked. It would be impossible for her to make enquiry into every case in which there is a failure in raising objection in time. Given her previous experience in this case, there was nothing to suggest that the applicant’s arrangement might not have worked this time.  We do not think the applicant can show that the Commissioner had made any error in her decision which justifies the interference of the court by way of judicial review.

7.We are not satisfied that the applicant has shown any exceptional circumstance which justifies leave on the “or otherwise” ground. The application for leave is accordingly dismissed.

M Edward Chan, SC and Mr Andrew Kan, instructed by Cheung & Liu, for the applicant

Mr Stewart K M Wong, SC, instructed by the Department of Justice, for the respondent