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The Judicial Committee of the Privy Council Decisions |
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You are here: BAILII >> Databases >> The Judicial Committee of the Privy Council Decisions >> The Director General, Mauritius Revenue Authority v Paradis Brabant Hotel (Mauritius) (Rev 1) [2013] UKPC 24 (23 July 2013) URL: http://www.bailii.org/uk/cases/UKPC/2013/24.html Cite as: [2013] UKPC 24 |
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[2013] UKPC 24
Privy Council Appeal No 0090 of 2012
JUDGMENT
The Director General, Mauritius Revenue Authority (Appellant) v Paradis Brabant Hotel (Respondent)
From the Supreme Court of Mauritius
before
Lord Neuberger
Lord Wilson
Lord Carnwath
Lord Toulson
Sir Paul Girvan
JUDGMENTS DELIVERED ON
23 July 2013
Heard on 11 June 2013
Appellant Philip Baker QC Karuna Gunesh-Balaghee Laurent Sykes (Instructed by Carrington & Associates) |
Respondent P. Maxime Sauzier SC Michael King Fat (Instructed by Blake Lapthorn) |
LORD NEUBERGER ( WITH WHOM LORD TOULSON AND SIR PAUL GIRVAN AGREE)
Introduction
The Hotel and Restaurant Tax Act 1986
"(1) The manager of every designated establishment shall be liable to a tax on the taxable receipts of that establishment.
(2) The tax shall be calculated at the rate specified in the Third Schedule.
(3) The liability to tax shall accrue daily but shall be discharged monthly.
(4) The manager may recover from customers the tax payable on the taxable receipts."
"(1) … [W]here the manager of a designated establishment ceases to carry on business … , he shall … (b) not later than the last day of the month following the month in which he ceased to carry on business, submit … (ii) in respect of the last month in which he carried on business, a return which shall include any amount owing to the establishment as taxable receipts at the date of the cessation of business … and pay the tax specified therein.
(2) Where the manager of a designated establishment, who ceases to carry on business at that establishment, sells … the business together with the amount owing to the establishment as taxable receipts at the date of the cessation of business, he shall not pay tax on those taxable receipts but the purchaser or transferee shall be liable to pay the tax on those taxable receipts …".
The Finance Act 1998
"(a) by deleting the words '10 percent' and replacing them by the words '4 percent';
(b) by deleting the words '4 percent' and replacing them by the words '2 percent'; and
(c) by deleting the words '2 percent' and replacing them by the words 'zero percent'."
"(3) Section 3(a) shall, in respect of taxable receipts arising on or after 7 September 1998, come into force on 7 September 1998.
(4) Section 3(b) shall, in respect of taxable receipts arising on or after 1 July 1999, come into force on 1 July 1999.
(5) Section 3(c) shall come into force on 1 July 2000."
The factual background
The approach favoured by the Board
Contrary arguments
Conclusion
LORD WILSON (DISSENTING)
(a) paid HRT at 4% to the Commissioner of VAT;
(b) failed to refund to the customers 60% (or indeed any part) of their payments referable to HRT; but, on the contrary,
(c) kept the 60% and included it in their accounts as part of their turnover for the purposes of income tax.
The respondents accept the description of the 60% as being a windfall, although (so they say) it was more than offset by the introduction on 7 September 1998 of VAT; but in my view the Act was not intended to work in that way and, it is clear that, on their construction, the respondents have unlawfully exceeded the permission given to them by subsection (4) to recover from customers only the tax payable. But if, upon receipt from the customers, HRT is payable at the rate prevailing on the date of supply, no such bizarre consequences arise.
LORD CARNWATH (ALSO DISSENTING)