Malta Constitutional Court tax decision on taxpayers' onus of p

Ryan Falzon | Published on 27 Dec 2012

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The First Court in its Constitutional Jurisdiction, presided by Mr Justice Gino Camilleri, had declared a violation of the fundamental right to a fair hearing within a reasonable time and awarded John Geranzi Ltd €30,000 in compensation. The case dates back to 1977, when the company objected to an ex officio tax assessment issued by the Commissioner for Revenue who claimed additional tax equivalent to €18,430. The company  was entitled to resort to the courts only upon the rejection of its objections by the Commissioner. The objection was rejected 27 years later.

The Constitutional Court, presided by Chief Justice Silvio Camilleri, Mr Justice Giannino Caruana Demajo and Mr Justice Noel Cuschieri, upheld the First Hall’s decision confirming that the Inland Revenue Department’s failure to process a company’s tax assessment for 27 years had breached and prejudiced their right to a fair hearing. The company's right of recourse to the courts only came into being when the refusal was issued. This was tantamount to preventing the company from access to the courts.

The Commissioner claimed that the delay in the processing of the company's objection to the assessment was due to the failure on the part of the company to submit the necessary documentation. The Commissioner added that the law did not impose a time limit within which an objection had to be processed. The Constitutional Court declared that a 27-year delay could not be considered reasonable. The fact that the company might have contributed to the delay did not exonerate the Department from the obligation of deciding a case with speed and efficiency.

The  Constitutional Court rejected the financial compensation of €30,000 awarded to John Geranzi Ltd by the First Court and annulled the Commissioner's ex officio assessment and any related administrative fines and interest on any tax which may be due by the company.

This decision seems to provide leeway for the adoption of the principle that, in such proceedings, taxpayers should be granted the right to the presumption of innocence. This right is presently not granted to the taxpayer, who when facing such procedures, is burdened with the onus of proof in countering the charge by the Inland Revenue Department. 

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