Ram v Chief Executive Officer - Revenue & Customs Authority [2012] FJHC 1281; HBC393.2009 (9 August 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CASE NUMBER: HBC 393 of 2009

BETWEEN:

PARAS RAM
PLAINTIFF

AND:

CHIEF EXECUTIVE OFFICER: REVENUE & CUSTOMS AUTHORITY
DEFENDANT

Appearances: Mr. D. Prasad for the Plaintiff.
Ms. T. Rayawa for the Defendant.

Date / Place of Judgment: Thursday 09 August, 2012 at Suva.

Coram: The Hon. Justice Anjala Wati.

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JUDGMENT

CATCHWORDS:-

DEPARTURE PROHIBITION ORDER (DPO) FOR UNPAID TAX – REQUEST TO UPLIFT – GROUND NOT GENUINE – PROPER SECURITY MUST BE PROVIDED IF DPO TO BE UPLIFTED.

___________________________________________________________________________

1. On 28 August 2009 the Commissioner of Inland Revenue, in exercise of its powers under s. 77A of the Income Tax Act 1974 and s. 64A of the Value Added Tax Decree, issued a Departure Prohibition Order ("DPO") to prevent the plaintiff from departing the Fiji Islands.
   
2. The order was issued as the plaintiff had the controlling interest in Eagle Ridge Investment (Fiji) Limited which went under receivership. The company owed to FIRCA tax in the sum of $506,674.73.
   
3. The plaintiff was one of the directors of the company.
   
4. The plaintiff says that the amount of tax owed is disputed and that the defendant is not resolving the issue on their objection. The plaintiff says that he needs to go abroad as he is now employed by Sunrise Holdings Limited to purchase new machines for the company.
   
5. The plaintiff states that the Director of Sunrise Holdings Limited, Mr. Sarad Kumar, will be his surety as once he had been allowed to travel out of the country with the permission of the Court with the same surety admitted as the proper surety.
   
6. The plaintiff says that he will not default and will return to Fiji when work is done. He says that he does not have permanent resident visa for any country and that he will need to come back. He says that he has local ties.
   
7. The defendant objects to the application and said that the dispute on tax is pending before the Court of Review. The defendant states that under s. 60(7) of the Income Tax Act and section 50(7) of the VAT Decree, the Commissioner of FIRCA is empowered to continue recovery action irrespective of pending objection. If an assessment has been changed on objection, adjustment shall be made and amounts paid in excess will be refunded and amounts that have been short paid shall be recovered by the defendant through recovery mechanisms available to it by law.
   
8. The defendant stated that under the Income Tax Act, DPO can only be removed if tax liability is settled or tax payer has entered into an arrangement to the satisfaction of the defendant. The defendant states that the plaintiff is liable and ought to pay its dues to the state. The defendant argued that a Fiji Times advertisement of 16 February 2010 indicates that the plaintiff is no longer employed by Sunrise Holdings Limited and that there will not be any prejudice if the DPO is not uplifted.
   
9. The defendant also argued that the person named Mr. Sarad Kumar is no longer a director of the Sunrise Holdings Fiji Limited and as such that person now is not acceptable as the surety.
   
10. The defendant states that it has conducted searches and found that the plaintiff does not have any registered assets in Fiji, nor does he have any bank account in Fiji, therefore the chances of him returning should the DPO be lifted is minimal.
    
11. It was further argued by the defendant that the second director of Eagle Ridge Gyanendra Shandil has absconded the country after his DPO was temporarily revoked.
    
12. The plaintiff replied that he was unlawfully terminated by the Sunrise Holdings (Fiji) Limited and his solicitors will take legal action for unlawful dismissal. He says that he is now employed by Oz Eco Packaging Limited as a General Manager and required to travel for the purpose of purchasing new machines for this company too.
    
13. The plaintiff argued that Mr. Sarad Kumar is still the director as the newspaper notice was malicious without proper meeting of the directors and proper resolution. Mr. Sarad Kumar has a property and is also a director of Oz Eco Packaging Limited and has the capability to give an undertaking. A charge can be placed upon his property.
    
14. The plaintiff stated that he has another surety named Sadasiwan Goundar who he intends to do business with and he is currently in the process of setting up his printing business.
    
15. I need to analyse the aspect of removal of the DPO.
    
16. I do not find the request to go abroad and to buy machineries for the new company Oz Eco Packaging Limited to be any genuine. This is the same reason the plaintiff put forward when he was working for the previous company Sunrise Holdings (Fiji) Limited. There are other people who could do or undertake the same task of purchasing the machines. The plaintiff need not go. It is not a matter of his life or death that the DPO should be uplifted.
    
17. If the plaintiff wishes to leave the jurisdiction he must provide to the satisfaction of the Commissioner a surety who could pay the tax debt. At this stage the proposed surety is out of directorship from Sunrise Holdings Limited. Whether his removal is valid or not is not my duty to decide.
    
18. The plaintiff has been working so far and he has not made any arrangements to pay his tax debt. His assertion that recovery should be held pending his appeal is not proper as there is no stay order granted to him.
    
19. The plaintiff wishes to further the interest of his company and his financial interest. He has not shown any interest to pay his debt. He owes a duty to pay to the state his dues and unless he pays the monies or makes satisfactory arrangement, he cannot leave the jurisdiction.
    
20. This application is refused unless the defendant consents to the same.
    
21. Each party shall bear their own costs.
    

Anjala Wati
Judge

09.08.2012