N11335                                                                                       
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

CIA NO. 40 OF 2024 [IECMS]

BETWEEN:
IN THE MATTER OF SECTION 77 OF THE GOODS 
AND SERVICES TAX ACT 2003
Referrer

AND:
IN THE MATTER OF A CASE STATED BY THE COMMISSIONER GENERAL IN REFERENCE TO AN OBJECTION BY SOUTH SEAS TUNA CORPORATION LTD
 Objector

WAIGANI:   DINGAKE J
22 APRIL, 5 JUNE 2025

TAXATION – ruling on a preliminary issue raised by commissioner general of IRC 

Case cited

South Seas Tuna Corporation Limited v Betty Palaso & Anor [2019] SC1761
Ekepa v Gaupe [2004] PNGLR 22

Counsel

Mr. Steven Sinen for the referrer
Mr. Ian Molloy & Mr. Jordan Kakaraya for the objector

RULING

1.	DINGAKE J:  This is my Ruling with respect to the preliminary issue raised by the Commissioner General for Internal Revenue Commission (“the Commissioner”) on the 22nd of April 2025, the date set for the hearing of the Stated Case.

2.	In a nutshell the Commissioner’s preliminary point is to the effect that a total of five (5) out of seven (7) legal questions raised in the Stated Case should be struck out for two (2) main reasons:

a)	Questions 10-13 were matters that were previously ventilated and answered in the Supreme Court proceedings entitled South Seas Tuna Corporation Limited v Betty Palaso & Anor. SC 1761.

b)	Question 14 was not raised at the objection stage by the Objector and therefore it was precluded from raising this question in the stated case.

3.	It is important to indicate that (b) above is no longer a live issue in this matter as the Objector has indicated he is no longer pursuing the same.

4.	Essentially, the reason why the Commissioner seeks that Questions 10-13 of the Stated Case (Document No. 1) should be struck out is because those issues, according to the Referrer, are res judicata, in view of the decision of the Supreme Court in proceedings, South Seas Tuna Corporation Limited v Palaso (2019) PGSC3; SC 1761.

5.	On his feet, whilst arguing this preliminary point, learned Counsel for the Commissioner argued that all the four (4) questions raised above question the powers of the Commissioner to amend the monthly GST assessments of the Objector, pursuant to Section 67 and 72 of the GST Act.

6.	According to learned Counsel for the Referrer, the Supreme Court in SC 1761, held that the Commissioner has power under the GST Act, to amend assessments, and that the Commissioner may revisit tax as paid by a taxpayer and make assessments of the amount that, in the Commissioner’s judgment, is payable under the GST Act.

7.	The Commissioner also argued that should the Court find that res judicata does not apply, then issue estoppel applies to paragraphs 10-13 of the Stated Case.

8.	It is on account of the above, so the Commissioner argued, that any question regarding the Commissioner’s power to amend the monthly GST assessments of the Objector (for the periods 01 November 2004 – 31 December 2013) has been settled by the Supreme Court and cannot be re-litigated.

9.	The Objector submits that the preliminary point taken by the Commissioner is without merit as the doctrine of res judicata is not applicable because the cause of action in this matter is not the same as in any previous proceeding between the same parties.

10.	It is trite law that the doctrine of res judicata precludes any re-litigation of a claim between the same parties that has been tried by a competent court and finally determined.

11.	To succeed, a party raising the defence of res judicata must show the following:

a)	The parties in both matters are the same.

b)	The issues in both parties are the same.

c)	The previous judgment or decision extinguished the foundations of the claim or the right to set up an action.

d)	A Court of competent jurisdiction made the first decision.

12.	It is also trite law that the issue of estoppel is a sub-set of res judicata. To establish issue estoppel a party has to show that an issue of fact or law or mixed fact and law has been finally determined in a previous case and the cause of action does not need to be the same (Ekepa v Gaupe 2004 PNGLR 22).

13.	To determine whether there is merit in the preliminary issue raised by the Commissioner, I read the case of South Seas Tuna Corporation Ltd v Palaso (2019) PGSC 3; SC 1761 14 February 2019, with care.

14.	The above case was an appeal from an interlocutory decision of the National Court in which the Court found that it was unnecessary in the circumstances of the case to determine whether the Objector has made an assessment of tax payable under the Goods & Services Act 2003 (GST Act), and that the doctrine of functus officio did not apply in respect of an administrative decision of the Internal Revenue Commission under the GST Act.

15.	More significantly the above case dealt with the meaning of “assessment” for the purposes of the Goods & Services Act; the effect of Section 32 of the Interpretation Act and whether the Journal entries constituted an “assessment”, and whether the First Respondent was functus officio.

16.	The Court held that although the principles of functus officio in respect of administrative bodies were applicable in Papua New Guinea, they did not apply to the circumstances of that case. The Court further held that the Journal entries of January 2016 did not constitute an “assessment” within the meaning of the GST Act.

Having regard to all the above, I do not understand how the issues in SC 1761 can be said to be the same as the ones in the Stated Case. The issues are materially different as is clear from the above summary of SC 1761. 

17.	The issues before the Court in SC 1761 that I summarized above are specifically stated at paragraph 21 of the said Judgment as follows:

“21.	After hearing oral submissions from Counsel, we put it to the parties that, in light of their submissions and the overlapping nature of the grounds of appeals, there were fundamentally two issues for determination by the Cout in this appeal. These issues were:

1)	First, when the Commissioner makes an “assessment” within the meaning of the GST Act and the Court is seized of process by requesting the Commissioner to state a case for the National Court pursuant to ss 77(2)(a) and 77(3)(a) of the GST Act – whether the assessment is functus officio such that the Commissioner cannot revisit the assessment by issuing further amendments (grounds of appeal 3.1, 3.3., 3.4 and 3.5); and

2)	Second, whether the journal entries of January 2016, did constitute an “assessment” for the purposes of the GST Act (ground of appeal 3.2).”

18.	The Supreme Court in SC 1761 was not asked to decide any of the issues (questions 10-13) of the Stated Case.

19.	Based on the above, I am of the firm view that the issues referred by the Commissioner to this Court, in his Stated Case, paragraphs 10 to 13 are not res judicata or subject to issue estoppel in any way.

20.	It follows from above that the preliminary points raised above are without merit.

21.	In the result the Court orders that:

a)	The Commissioner’s preliminary points discussed above are without merit and are dismissed.

b)	The Commissioner shall pay the Objector costs in relation to same – such costs to be agreed or taxed.
____________________________________________________________
Lawyers for the referrer	:   Internal Revenue Commission Inhouse Counsel
Lawyers for the objector	:   O’Briens Lawyers