| 20/5/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 18/60 |
Decided: 15 February, 1961 |
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Restrictive interpretation of article 67 (claim for refund of tax) - articles 55, 59 and 67, Income Tax Act, now 33, 38 and 48, Income Tax Management Act
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On a prompting from an official of the Inland Revenue Department, appellant realised that he could have paid less tax had he interpreted the law correctly. He, therefore, claimed a refund. The Commissioner refused to comply since the assessments in respect of two basis years had become final and conclusive and could not be reopened, the objection in respect of another one had been declared invalid while tax in respect of yet another basis year had not even been paid.
The Board noted that one could not interpret article 67 as meaning that although assessments had become "final and conclusive" and "an executive title" in terms of article 59, a taxpayer still had a right to a refund if it was proved that tax had been paid in excess of the amount properly chargeable.
The Board held that the interpretation should not be so liberal as to sanction a request for a refund for any reason whatsoever and on any grounds. Such an interpretation would place the administration of the tax in disarray and open the way wide open to abuse. Indeed it would render articles 55 (Power of the Commissioner to revise assessment in case of objection) and 59 (Assessments or amended assessments to be final) superfluous.
Article 67 had to be interpreted restrictively and tax refunded only in exceptional cases. These would include cases where the assessment is inherently defective due to, say, arithmetical errors, wrong application of the different rates of taxation or other obvious errors. Claims for refunds would also be entertained in circumstances that have a retroactive effect and which were manifestly beyond the taxpayer's control.
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