Narayan v The State [1991] FJHC 14; Haa0059.88s (14 February 1991)

IN THE HIGH COURT OF FIJI
At Suva
Appellate Jurisdiction

CRIMINAL APPEAL NOS. 59 AND 60 OF 1988

Between:

SHIU NARAYAN
s/o Ram Prasad
Appellant

v.

THE STATE
Respondent

Mr. R. Patel for the Appellant
Mr. S. Hettige for the Respondent

JUDGMENT

The appellant pleaded guilty and was convicted by the Nausori Magistrate Court for the following Income Tax offences:

(1) In Cr. case No. 64/88 (in which the appellant is sued in his personal capacity)

Count 1:

Failing to Deliver Returns of Income as Required by the CIR: Contrary to Section 50(1) and 96(1) of the Income Tax Act; and

Count 2:

Failing to Deliver Detailed Statements of Assets and Liabilities as Required by CIR: Contrary to Sections 50(1) and 96(1) of the Income Tax Act.

Count 3:

Failing to Deliver Analysis of Drawings Account as required by CIR: Contrary to Sections 50(1) and 96(1) of the Income Tax Act.

(2) In Cr. Case No. 65/88 (in which the appellant is sued as the precedent partner of Nausori Motor Body Builders)

Count 1:

Failing to Deliver Returns of Income as Required by CIR: Contrary to Sections 50(1) and 96(1) of the Income Tax Act; and

Count 2:

Failing to Deliver Statements of all Assets and Liabilities as Required by CIR: Contrary to Sections 50(1) and 96(1) of the Income Tax Act.

Upon his conviction on 10th May 1988 the appellant was sentenced as follows:

(1) In Cr. Case No. 64/88

$180 on each count making a total fine of $540; and

(2) In Cr. Case No. 65/88

$180 on each count making a total fine of $360.

In each case the appellant was also ordered to pay costs of $15 and given 28 days in which to pay the fines.

The fines in both cases breaks down into a daily fine of $1 for a maximum default period of 180 days (just under 6 months) even though the actual default period was more than twice as long. In so restricting the default period the learned trial magistrate was guided by the prosecutor and correctly followed the judgment of this court in R. v. Mohammed Hakim Dean Suva Cr. App. No. 88 of 1972.

The Magistrate Court record reveals however that on the 16th of June 1988 the appellant successfully sought through his solicitors a suspension of the order to pay the fines.

The appellant now appeals against the fines on the sole ground:

"That the sentence is harsh and excessive in the circumstances."

Learned counsel for the appellant drew the Court's attention to the absence of any mitigation by the appellant in the lower court and offered the Court the following factors by way of explanation and mitigation. He said:

"The appellant is 65 years of age running a small motor spare parts business in Nausori. At the time of the offences his Accountant was one Natwarlal Sundarjee who was given all the documents to prepare the necessary returns and statements but had failed to do so. On receiving the demand notices he took these to his accountant who again failed to comply with them despite assurances to the contrary. When the case was called on the 8th of March 1988 it was adjourned till 10th May to enable the necessary returns and statements to be lodged and this was done before that date as confirmed by the representative of the CIR."

In a nutshell the appellant was badly let down by his accountant whom he had trusted.

Learned State Counsel on the other hand in opposing the appeal pointed to the 15 months that elapsed between the service of the "demand notices" on the appellant and the laying of charges in Court as a clear indication of the appellant's wilfulness. Furthermore counsel points to the "back-years" requested as indicating that the appellant had never filed a return with the CIR for at least 7 years.

The penalty section under which the appellant was charged, namely, Section 96(1) of the Income Tax Act Cap. 201, provides for a ".......... fine not exceeding $40 for each day during which the default continues".

Of the predecessor to the above penalty Section, Hammett C.J. in A.G. v. Hari Chand 14 FLR 245 in increasing a daily fine of 2/- to 10/- on the appeal of the Attorney-General had this to say at p.246:

"This is a clear indication of the gravity with which this offence is regarded by the Legislative affecting, as it does, the uniform collection of one of the Government's main sources of revenue, namely income tax.

A wide discretion is left to the Court in imposing the penalty for such offences. In the exercise of its discretion the Court must of course have due regard to the means of the offender, but the penalty imposed must also have some reasonable bearing on the gravity of the offence.

In determining the quantum of the penalty, regard must be had not merely to the ability of the accused to pay the amount of the penalty fixed in respect of one day but also to his ability to pay the total of the fine imposed."

and later at p.247:

"The considerations which must be taken into account in imposing a penalty for such offences must include not only the accused's ability to pay but also the gravity of the offence, the previous record of the accused, and the prevalence of the offence. There may well be other considerations, and the prosecutor should have been armed with much more information, both as to the accused's means and the extent of his income and assets, than the rather scanty facts disclosed in the Court below and in this Court. Unless this is done a court is less able to make a balanced assessment of what would be an appropriate penalty in the particular circumstances of each case."

More recently Kermode Acting C.J. (as he then was) in Castle Trading (S.P.) Limited v. CIR Suva Cr. App. No. 16 of 1981 in dismissing an appeal against a fine of $1 per day for a total default period of 180 days said:

"Where the legislature fixes a maximum penalty of $10 a day for a continuing offence a fine of $1.00 a day cannot be considered wrong in principle in the sense that it does not allow for what might have been a far worse case for which a larger daily fine could be properly imposed."

(a fortiori the same might be said where the maximum penalty is $40 per day)

and later in the judgment, his lordship states:

"The fact that the offence continues for a long period of time is not in my view a reason for reducing what a Magistrate considers on the facts before him is the proper fine for the commission of the offence in respect of every day the offence continued. The provision of a daily fine is not merely to punish the offender but to ensure that the law is complied with."

In this present case under appeal there can be no doubting that the appellant has been extremely tardy in submitting the relevant information sought by the Commissioner however he is not entirely to blame for the delay and this is a relevant factor to be considered by the Court in determining the penalty that ought to be imposed.

Unfortunately this information was not available to the learned trial magistrate and in the circumstances some leniency can be shown to the appellant.

The daily fine on each count in respect of both cases is accordingly reduced to 50 cents per day with the default period remaining unaltered at 180 days.

The appellant must now pay the following fines within 28 days:

(1) In Cr. Case No. 64/88

Count 1: $90

Count 2: $90

Count 3: $90

i.e. a total of $270 in default of which a sentence of 2 months imprisonment is imposed; and

(2) In Cr. Case No. 65/88

Count 1: $90

Count 2: $90

i.e. a total of $180 in default of which a sentence of 1 month's imprisonment is imposed.

(D.V. Fatiaki)
JUDGE

At Suva,
14th February, 1991.

HAA0059.88S