Anguilla Building Construction Supplies Ltd v The Minister of Finance of Anguilla et Al
| Jurisdiction | Anguilla |
| Judge | Moise, J. |
| Judgment Date | 18 December 2023 |
| Neutral Citation | AI 2023 HC 13 |
| Court | High Court (Saint Christopher, Nevis And Anguilla) |
| Year | 2023 |
| Docket Number | CLAIM NO. AXAHCV2023/0007 |
His Lordship The Honourable Justice Ermin Moise
CLAIM NO. AXAHCV2023/0007
EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
(CIVIL)
Mrs. Tana'ania Small Davis KC with her Mrs. Josephine Gumbs-Connor, Mr. Carlyle Rogers and Ms. Kathryn Williams of counsel for the claimant
Mr. James Bristol KC with him Mr. Sasha Courtney and Mr. Theon Tross of counsel for the defendants
This is an application for judicial review. The claimant seeks various administrative orders regarding the Government's implementation and enforcement of a remission on the Interim Goods Tax. This tax was in force in Anguilla until 30 th June, 2022, at which point the Goods and Services Tax was fully implemented as a replacement on the island. The claimant therefore seeks the following relief:
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(a) An Order of Certiorari quashing the decision of the First Defendant to impose additional requirements on the Claimant regarding information and documentation required of the Claimant in order for the Claimant to qualify for remission of Interim Goods Tax (“IGT”), contrary to the previously published requirements, and to have done so at a late stage when it was physically impossible for the Claimant to comply by the specified deadline.
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(b) An Order of Certiorari quashing the decision of the Second Defendant to enact the Financial Administration and Audit (IGT Remission) Regulations, 2022 imposing a retroactive date for the submission by the Claimant of the additional requirements referred to in (a) above and which it was impossible for the Claimant to comply with.
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(c) A Declaration that the Financial Administration and Audit (IGT Remission) Regulations, 2022 are null, void and of no legal effect.
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(d) An Order of Certiorari quashing the decision made by the Third Defendant on 30 th December, 2022 to deny the Claimant's application for an IGT remission.
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(e) An Order of mandamus directing the Third Defendant to reconsider the Claimant's application for an IGT remission in keeping with the criteria set out in the Second Defendant's letter dated 26 th June, 2022 and the First Defendant's letter dated 28 th June, 2022.
In order to address the issues raised in this case in full it is important to give careful consideration to the facts which have been pleaded. I note also that despite this being a case for judicial review, there are areas in which the facts are disputed. It will be important therefore to consider whether a reconciliation of those disputes of fact is necessary in order to determine the claimant's entitlement to the relief sought.
On 30 th July, 2021, the Legislature in Anguilla enacted the Goods and Service Tax Act, 2021. Under this legislation goods and services in Anguilla were to be subject to a 13% tax payable by the consumer at the point of sale. This tax is locally referred to as a GST. The Act also repealed and replaced the previous Interim Goods Tax Act, which had imposed a 9% tax on goods in Anguilla. This tax is locally referred to as “IGT” and was payable by local businesses on goods at the port of importation into the country. The coming into force of this Goods and Services Tax Act was delayed until 1 st July 2022.
Prior to the full implementation of the GST, some of the local businesses in Anguilla raised a concern regarding the taxes already paid on goods which we were in stock at the time. It was apparent that with the implementation of the GST there would be double taxation on those goods. This was the case, as the local merchants had already in fact paid over the IGT to the government at the point at which the goods were brought into the country. In addition to that, as of 1 st July, 2022, those very businesses were duty bound to include the 13% GST to be paid by the customer on the sale of those goods.
In her affidavit filed on 4 th May, 2023, Mrs. Kathleen Rogers (Mrs. Rogers), Permanent Secretary in the Ministry of Finance, stated that in or around February 2022, the business community expressed certain concerns regarding the implementation of the GST. It was her understanding that the business community was concerned about goods already imported on which IGT had already been imposed, but which would attract an additional GST as of 1 st July 2022, when the new regime came into effect. In seeking to address these concerns, the Government made certain proposals. It is not necessary to detail those proposals in this judgment as they were not accepted by the business community.
On 17 th June, 2022, a letter was written to the Government in which 3 recommendations were set out by the business community. These were:
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(a) Retain the 9% GST on imports of future stock and add a 5% sales tax. There will be no claim back on the 5% sales tax or IGT. Retailers will be entitled to 13% GST claim backs for services only. Result, compulsory registration of all retail businesses collecting the 5% sales tax.
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(b) Introduce the 13% GST on services only on July 01, 2022, with a later implementation date on the goods tax pending a fair and amicable agreement between the Government of Anguilla and the retail sector.
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(c) If neither of the reasonable, practical and fair recommendations 1 and 2 above are acceptable, a full credit must be given for the 9% IGT on existing stock.”
The Government did not find proposals 1 and 2 acceptable. However, the Premier held a meeting with the business community on 24 th June, 2022. He communicated an interest in exploring the third proposal of a tax credit being given for the 9% IGT which had already been paid on the existing stock of local businesses. Mrs. Rogers was present at that meeting and she stated in her affidavit that the Premier indicated that he needed to meet with the team at the Ministry of Finance in order to consider this request and discuss how and by what method the Government may accommodate it. She goes on to make it clear that “absolutely no assurances were given to the business community at that time to the effect that this recommendation was accepted as it was also said to them that the Executive Council must meet and decide on the recommendation of a 9% tax credit. It was clear that Government had to consider that recommendation.”
A meeting of the Executive Council was held and subsequently, on 26 th June, 2022, the Premier, in his capacity as Minister of Finance, wrote to the business community indicating that the Government was considering the implementation of transitional provisions allowing for Interim Goods Tax (IGT) paid to be treated as a credit to offset future tax obligations (my emphasis). The Premiere went on to note that as part of this consideration process, information from registered businesses was required. This included an inventory stock list as at 30 th June 2022 (before GST came into effect) and details of annual turnover of the businesses.
The Premier made it clear in his letter that the information requested was needed to inform the framework of the proposed 9% IGT future credit. This framework would consider variations in the fullness of records that respective businesses may ordinarily maintain. It was also stated that the proposed transitory arrangement for credit must be considered alongside the existing package of cost of living support as well as the financial integrity of the Government. It was further noted that Government was minded to consider these credits primarily based on assurances made by the business community that any credits or concessions would be passed on to consumers in the form of lower prices.
Mrs. Rogers went on to state the following at paragraph 12 of her affidavit:
“In relation to the credits or concessions being passed on to consumers, retail businesses had to reduce or lower the prices of their goods and show proof of the same prior to any business benefiting from the 9% IGT future tax refund. The passing on was always discussed as first highlighted in the 1 st Defendant's letter of 26 th June 2022 (Exhibit ML2). Further, it was never communicated, neither was it the intent of that letter, that once the businesses submitted their inventory stock list and annual turnover reports, then they would automatically receive the 9% tax credit on account of them simply indicating or assuring that they will lower prices. What that letter suggested (“CONSIDERING”) was that in considering the credit of the 9% IGT Tax, the Government needed information and additionally that businesses had to lower prices for the benefit of consumers.”
Mrs. Rogers went on to indicate that the Government needed the information from the local businesses in order to determine whether to implement the credit proposal. At that point, there was no final decision taken by the Government. This was an information gathering exercise in order for such a determination to be made.
Mrs. Rogers wrote a letter to the business community on 28 th June, 2022. She stated in her affidavit that the letter was consistent with the theme of information gathering, in that, the Government sought specific information from the business community relative to inventory stock on hand as at 30 th June 2022. Further, that letter indicated two important things:
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(a) That regarding the 9% IGT tax future credit proposal, the requested information was needed for CONSIDERATION of that proposal; and
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(b) The requested information would INFORM the framework of the proposal consistent with the 1 st Defendant's letter of 26 th June, 2022.
Mrs. Rogers indicated in her letter that the information, including the inventory of stock, was to be supplied no later than 31 st July, 2022. It is apparent from the evidence that Anguilla Building...
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