PENAL TAX CHARGE

Press, Volume XCVIII, Issue 29016, 3 October 1959, Page 17

PENAL TAX CHARGE

Judge Rules On Appeal (New Zealand Press Association) HAMILTON, October 2. An order for a rehearing by the Magistrate was made by Mr Justice Boys in a reserved judgment in the Supreme Court today, in an appeal by Leonard Patrick Zimmerman, a farmer, of Te Kauwhata, against the imposition of penal tax. His Honour said that while the taxpayer was shown as the appellant, the appeal was in fact by the Commissioner of Taxes. His Honour said the point at issue was a narrow but important one. If a taxpayer evaded taxation he could be made liable for penal tax amounting to three times of the deficiency. The Magistrate had decided that a person could not have committed an offence unless and until he had' been convicted of that offence. Accordingly, tht Magistrate had upheld the objection of the taxpayer on the ground that the Commissioner of Taxes had no power to charge or recover penal tax until tne taxpayer had been convicted of intent to evade tax. His Honour said the matter had come before him in an unusual way, in that counsel for the taxpayer who had appeared in tne Court below did not appear in the Supreme Court, as the taxpayer was not prepared to present any argument in support of the finding that had been made in his favour by the Magistrate. The reason, no doubt, was that the judgment required the Commissioner first to prosecute the taxpayer, and the time for such a prosecution—if able to be brought —had not gone by. After hearing argument by Mr J. E. S. Allen for Zimmerman and Mr K. L. Sandford for the Commissioner of Taxes, his Honour said there appeared to be nothing in either the regulations or the statute to show the basis on which appeals to the Supreme Court were to be conducted or determined. His Honour held that the Magistrate’s Court Act of 1957 gave authority to remit the matter back to the Magistrate with a direction that it be reheard. If necessary, he would hear counsel on the matter, but it appeared that there was power to order a rehearing, and, as a rehearing was required in order to have the merits of the case examined he would make an order accordingly. As the appeal had resulted from contentions not raised by the appellant taxpayer, no costs would be allowed, his Honour said.