A contracting company has emerged victorious in its over two decades-long battle with the Board of Inland Revenue (BIR) over $222,000 in taxes it (BIR) claimed it owed for 1990.
Delivering a written judgement on Wednesday, High Court Judge Betsy-Ann Lambert-Peterson ruled that D Lak Transport and Construction Ltd was not liable to pay any taxes for that year as the BIR failed in its duty to inform it of the result of its initial objection to the initial assessment of its taxes.
According to the evidence in the case, the company filed the objection in 1996 as it claimed that the BIR’s audit was unfair and flawed as it was not notified of it and given an opportunity to produce documents before it was completed.
Believing the determination was still pending, the company continued to pay its annual taxes for other years.
It was forced to file the lawsuit before Lambert-Peterson after it applied for a tax clearance certificate during Government’s tax amnesty in 2019 and was told it still owed over $1 million, which represented the outstanding tax plus interest.
The company’s accountant also made a request for information on its long-standing objection over the assessment of the taxes, under the Freedom of Information Act (FOIA), but received no reply.
In her judgement, Lambert-Peterson ruled that the BIR violated the provisions of the legislation and acted in an illegal, irrational, and unreasonable manner.
She upheld the company’s claim that as the BIR failed to inform the company of its response to the objection within the statutory period of 24 months, it (the objection) was automatically determined in its favour with a nil tax liability.
Despite the company’s legal victory in the case, Lambert-Peterson did not order that it be issued with the certificate as she said there was an alternative avenue to get it.
Lambert-Peterson pointed to the BIR’s income tax regulations, which she said allowed aggrieved parties the opportunity to appeal to the Tax Appeal Board before filing a lawsuit in the High Court, as was done in the case.
The company was represented by Stephen Singh and Saira Lakhan, while Sheldon Prescott represented the BIR.