Tax Commissioner is to follow the procedure in full

A tax estimate was declared null and void because the Tax Commissioner failed to notify the company as prescribed by law. This was held in a judgment delivered by Mr Justice Francesco Depasquale on 1 April 2025 in Sullsport Ltd vs Tax Commissioner.

In the sworn application, the Plaintiff Company explained that it received a notice from the Commissioner of Taxes to pay over €66,000. The letter was dated 28 November 2018, but received on 10 December 2018. According to the Income Tax Management Act, the letter has the effect of an executive title after the Commissioner files a judicial letter. However, in this case the official letter was not issued. The Plaintiff Company held that the notice was null because the Commissioner failed to follow the procedure. The notice was referring to the Year of Assessment 2002 when the company did not send a return for that year. In these circumstances, the law states the Commissioner may establish the amount due in tax and does not need to inform the taxpayer that an estimate is being calculated. However, in this case the Plaintiff Company was never informed of the estimate and the first time the Plaintiff Company became aware of it was when the notice to pay was sent. Because of this lack of information, the Plaintiff Company argued that the notice to pay was null and void.

The Tax Commissioner filed a statement of defence arguing that the Court did not have jurisdiction to sanction the notice to pay. Furthermore, it was argued that the estimate tax for 2002 was issued in 2010 and no objection was filed on the estimate. Furthermore, the notice to pay in 2018 was duly notified to the Plaintiff Company and therefore, the company owed over €66,000 in taxes.

Mr Justice Depasquale examined the evidence produced. In May 2019 following the letter of December 2018, the Plaintiff Company filed an objection but the Commissioner replied by rejecting the objection since it was filed late in terms of Article 33(2) of the Income Tax Management Act. An official of the Income Tax Department presented a letter dated 31 December 2010 with an estimate of tax for the year 2002. Another official could not confirm that the estimate was in fact issued.

The Court pointed out that the Income Tax Department official had presented a notice to the Plaintiff Company with a different date, that of 25 October 2018 and not 28 November 2018. It was also argued that the notice to pay became an executive title 30 days after notification. However, the notice mentions a different period. It stated that the taxpayer had 15 days to pay.

The law also states that a notice to pay may proceed against any official of the company without any further notices.

The Court also commented that the Plaintiff Company did not present any evidence on the difficulties faced. Therefore, the tax estimate had to be issued after the company failed to file its returns. The Court quoted Article 33 of the Income Tax Management Act which states that the estimates should be notified by registered post. The estimate may be contested in writing asking the Commissioner to reconsider its decision. There is no evidence that the estimate for 2002 was notified by registered post. If registered post was used, then it would be easy to prove that the estimate was sent. The company representatives testified that the document was never received and thus they lost the opportunity to appeal the estimate.

The Court declared the estimate cannot be considered as an executive title. The Court then moved to uphold the Plaintiff Company’s claims.