Court rules: Construction firm does not owe $1.5m in taxes

A HIGH COURT judge has ruled that a transport and construction firm does not owe the Board of Inland Revenue (BIR) any taxes for the income year 1990.

On Wednesday, Justice Betsy Ann Lambert-Peterson declared that the BIR failed to determine an objection filed by D Lak Transport and Construction within the statutory timeframe of 24 months.

As part of her ruling, the judge held that because of this failure by the BIR, the company’s objection was deemed to be determined in its favour, pursuant to section 86(8) of the Income Tax Act, and that it did not owe any taxes for 1990.

She found that the BIR failed to serve a notice of assessment of the taxes it allegedly owed.

Lambert-Peterson said the real prejudice to D Lak Transport and Construction arose when the BIR failed to issue tax-clearance certificates after September 2019 on the basis that the company owed outstanding taxes for 1990.

The board had claimed it was owed $1,515,514.57 in taxes and interest.

In its judicial review claim, D Lak Transport and Construction claimed more than 29 years later, the BIR stopped issuing tax clearance certificates to the company because it allegedly owed taxes.

The company contended that the BIR did not comply with the Income Tax Act and its own audit process was unfair and reckless, as it was not told of the audit, or allowed to produce documents in its defence. It also claimed the assessment could not be substantiated logically and filed its objection.

The company had also made a freedom of information request to get the BIR’s decision on its objection or whether it was determined and served, but it was refused by the board’s commissioner. The request was made during the Government’s tax amnesty period in 2019.

Lambert-Peterson ruled that the BIR violated the Freedom of Information Act, and acted in a manner that was irrational, illegal and unreasonable.

As part of the judge’s orders, the BIR cannot enforce the claim for unpaid taxes and interest for 1990.

D Lak Transport and Construction was represented by attorneys Stephen Singh and Saira Lakhan. The BIR was represented by attorney Sheldon Prescott.