COMMISSIONER GENERAL OF INLAND REVENUE

COMMISSIONER GENERAL OF INLAND REVENUE

Vs.

PIGOTT CHAPMAN AND COMPANY

COURT OF APPEAL
J. DE SILVA,
J. WENGAPPULI, J.
CA/TAX/02/2017
TAC/IT/019/2014
SEPTEMBER 18, 2018

Tax Appeals Commission Act, No. 23 of 2011, sections 9(a), 9(b), 9(c), 11A(1), 11A(3), 11A(5), 11A(6), 11A(7)-Case stated-Can only a legal or natural person be a party to a case stated?-Nature of a case stated under the Tax Appeals Commission Act-Inland Revenue Act, No. 10 of 2006, sections 77(2), 165(1), 217-Interpretation Ordinance, section 2(s)-Partnership-Doctrineof approbation and reprobation-Necessary parties-Natural justice-Costs

The respondent is a partnership having Chapman International (Pvt) Ltd and Ayman Abdul Cader as partners. The returns of the respondent for the years of assessment 2009/2010 and 2010/2011 were rejected by the assessor, who proceeded to make his own assessments. As the respondent's appeal to the Commissioner General of Inland Revenue was unsuccessful, the respondent appealed to the Tax Appeals Commission (TAC), which annulled the assessments of the assessor. The appellant then moved the TAC to forward a case stated to the Court of Appeal.

By way of a motion filed on behalf of Chapman International (Pvt) Ltd, the Court of Appeal was informed that the respondent partnership had ceased to exist upon the death of Ayman Abdul Cader and therefore the appeal must be dismissed in limine on the basis that the appeal had been made against the business name of the partnership and not against the legal persons who were parties to the dissolved partnership.

The said preliminary objection was presented on seven points: (i) the respondent is no longer a partnership; (ii) the case stated is deemed a civil appeal; (iii) only a legal person who is a partner of a partnership can be named as a respondent in an appeal; (iv) the transmission of the case stated is invalid in terms of section 77(2) of the Inland Revenue Act because it has not been made in the name of the existing partner

of the respondent partnership; (v) the necessary parties are not before court; (vi) the failure to name the existing partners renders any decision a nullity; and (vii) the principles of natural justice had not been observed as the existing partner was not before court.

Held:

1. The evidence shows that the respondent had acted and held out to third parties that it was a partnership even after the death of Ayman Abdul Cader.The respondent had also appeared before the appellant and the TAC in the capacity of a partnership. Therefore, the respondent cannot be allowed to approbate and reprobate by claiming that the partnership was dissolved upon the death of Ayman Abdul Cader.

2. A case stated in terms of the TaxAppeals Commission Act is only a step in the appeal made by the respondent to the TAC.

3. There is no need for parties to be legal or natural persons in respect of appeals made to the Commissioner General of Inland Revenue under the Inland Revenue Act and appeals made to the TAC under the Tax Appeals Commission Act.

4. The appeal made by the respondent to the TAC was made in the name of the partnership and not the partners. Therefore, if the failure to name the existing parties renders any decision a nullity, then the appeal of the respondent to the TAC was also flawed.

5. The court permitted counsel to appear on behalf of Chapman International (Pvt) Ltd before court. Therefore, the principles of natural justice have been observed.

6. The preliminary objection raised by the respondent is a textbook example of a frivolous and vexatious preliminary objection and warrants the ordering of high costs.

Cases referred to:

1. Verschures Creameries v. Hull & Netherland Steamship Co Ltd (1921) 2 KB 608 at 612
2. Visuvalingam v. Liyanage [1983] 1 Sri LR 203 at 227
3. Ranasinghe v. Premadharma and others [1985] 1 Sri LR 63 at 70
4. Edwin and another v. Sugathadasa De Silva [1989] 1 Sri LR 337 at 34

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