TAX RETURNS CONVICTION

Press, Volume XCVIII, Issue 29057, 20 November 1959, Page 12

TAX RETURNS CONVICTION

Appeal Decision Reserved Doubts that admissions made to the Commissioner of Inland Revenue for purposes of civil proceedings could be used against the taxpayer in a criminal action were expressed by Mr Justice Sharland in the Supreme Court yesterday. . ■ His Honour was hearing an appeal by John Norman Clarke Oakley, a company director against convictions and fines of £lOO on each of seven charges of wilfully making false returns of income. The charges related to a total deficiency of £19,876 over the tax years 1947 to 1953 inclusive. Mr R. E. Harding, of Wellington, appeared for Oakley, and Mr P. T. Mahon for the Commissioner. His Honour reserved his decision on the appeal. The only prosecution witness was the tak inspector, who had advised the prosecution upon the ground that Oakley’s assets had increased year by year without an appropriate increase in his income, Mr Harding submitted. “The point we took was that the inspector could not give enough admissable’ evidence to require us to answer it.” The bulk of the facts given by 1' j inspector were not first hand knowledge; and the good omen of the case was that these might well be the facts, but they were not proved, said Mr Harding. The prosecution had contended that some letters from Oakley’s accountant constituted admissions which justified the bringing of prosecutions. “But in a criminal case if you wish admissions to be accepted you have to prove that the persons making the admissions had express authority to do so," said Mr Harding. It was submitted that all the assets showed was that the taxpayer had spent more money than he said he earned. The state of the assets could be Uken only as corroboration. Mr Mahon said that the appellant had adopted the letters from his accountant as his own as they set out the objections on which he had based his case stated. The question was whether it was within the scope of the accountant’s authority to write the letter.

“Revenue prosecutions are in a peculiar class as far as criminal prosecutions are concerned,” said Mr Mahon. “A communication made to the Commissioner can be acted on by him civilly, criminally, or both.” His Honour said he doubted if an admission made for civil purposes could be used for purposes of criminal proceedings. Mr Mahon said that the fact that an admission was made was relevant only to the question of whether or. not the returns were correct.

The prosecution had to prove' an element of wilfulness in the 1 charges, he said. He had established prima facie deficiencies in each of the years, and it was submitted that that was enough to discharge the burden of proof as to the falsity of the returns. In reply, Mr Harding said the root of the matter was did the letters contain admissions that the returns were wilfully false.