Misleading government forms allow applicant an exemption on registration tax

The applicant asked the Tribunal to overturn the Chairman’s decision and allow an exemption from payment of tax

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Malcolm Mifsud
20 June 2014, 7:26pm
On 6 June 2014, the Administrative Revision Tribunal presided by Magistrate Dr Charmaine Galea held that a government entity cannot make use of a time limit when its forms indicate otherwise.  This was held in Sebastiano Vella –v- Transfer of Residence Exemption Board.

On 5 March 2013, Vella filed an application before the Tribunal, explaining that he is an Italian national and resided in Italy together with his Maltese wife. In October 2012, his family moved to Malta and they brought with them their Italian registered car, a Hyundai Matrix.

Vella requested that he be allowed not to pay registration tax in accordance with Article 19 of the Motor Vehicles Registration and Licensing Act. He asked for information from the competent authority and was given Form VEH 07, which listed the conditions to be able to receive this exemption.

The applicant’s vehicle must have been used outside Malta for at least 2 years before his change in residence in Malta. The form also mentions that the vehicle must be declared for the extension after two months from when the applicant became a resident in Malta and not later than one year.

On 15 February 2013, Vella received from the Chairman of the Transfer of Residence Exemption Board saying that his application was being declined in terms of Regulation 4(3) of the Legal Notice 6 of 2012. The applicant asked the Tribunal to overturn the Chairman’s decision and allow an exemption from payment of tax.

The Transfer of Residence Exemption Board defended the case, saying that according to Vella’s application he transferred his residence on 13 October 2012 and the vehicle arrived in Malta on the same day. The application was filed after more than 30 days.

The Board then later filed further pleas in that the Minister of Finance was the correct defendant, which was accepted. The Minister of Finance also defended the action by saying that the application was filed late and that ignorance of the law is not a defence and therefore, Vella cannot sustain his claim by saying he did not know he had 30 days to file.

Magistrate Galea examined the facts of the case, where it was evident that the application to exempt Vella from paying registration tax was filed late. It was also proved that Vella sought advice from Transport Malta, but none was forthcoming, not even on the authority’s website.

The Board argued that Vella did not fulfil one of the conditions in that he has to file his application within 30 days as laid down in the legal notice. Article 19(2)(a) and (d) of the Motor Vehicles Registration and Licensing Act stipulates that:

a) The Minister responsible for finance may, by order and subject to any conditions, restrictions or limitations, exempt any person from the payment of any tax or part of the tax or from any obligation imposed under this Act.

(d) The Minister responsible for finance may delegate his authority to any person to put into effect the exemption under paragraph (a)

In fact the Minister did delegate this power to the defendant Board.

Article 19(3) of the same Act says that vehicles will be exempt from registration tax under a list of conditions and this list is found in Subsidiary Legislation 368.01.

Another important fact was that the applicant and his car arrived on 13 October 2012, which meant that on that day the 30 days began, according to the same subsidiary legislation. However, the Tribunal commented that the background of this case is extremely important. According to the application form VEH 07, there is written:

“A vehicle is to be declared for exemption not earlier than two months before the date on which applicant becomes normally resident in Malta and not later then twelve months following that date”

This is the only time period found on the form, and it fails to indicate the 30-day requirement. Only Transport Malta knows about the 30-day period in which one has to file the application. The Tribunal held that the public administration failed tremendously in this case.

In fact the form has changed and highlights the 30-day period within the amended version of the form. Therefore, the authority was aware of this grave mistake.

The Tribunal commented that the public administration is there to assist people to receive the correct information. The applicant followed what was stated on the form but was penalised by having it rejected.

The Tribunal further explained that it understood the legal maxim that ignorance of law is no excuse. However, the form in question makes reference to the Act, while the 30-day rule is not found in the Act but in the Subsidiary Legislations. As a consequence, the authorities concerned did not carry out proper administration towards Vella.

The Tribunal ordered that the rejection of Vella’s application be revoked and that he be exempt from paying registration tax of his vehicle.

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Malcolm Mifsud is a partner at Mifsud & Associates.