Motor-cycle tax refund charges dismissed

Press, 3 June 1981, Page 4

Motor-cycle tax refund charges dismissed

In . a reserved decision given in the District Court yesterday Judge Palmer dismissed charges against two city motor-cycle dealers relating to the invoicing of Honda three-wheeled motorcycles for farmer purchasers.

The companies were W. U. Baker and Sons, Ltd, ■■ and Holland’s Motor-cycles, Ltd, both represented by,. Mr J.Cadenhead. r The Judge dismissed all three charges against Holland’s Motor-cycles, Ltd; Ye-, lating to its enabling threepurchasers to obtain refunds of sales tax. on Honda ACT three-wheeled motor-cycles, by the issue of invoices which were not genuine. When the cages against the two companies had been heard at a combined hearing bri May 16 Judge Palmer indicated after the completion of evidence and counsel’s submissions that' he would dismiss the one similar charge against. W. U. Baker and Sons, and give, his decision in reserved form also.

The charges which had been brought by the Customs Department (represented by

Mr D. J. L. Saunders) were said during the hearing of evidence last month to have resulted from investigations of a number of Canterbury dealers in Honda motorcycles, to establish the extent to which sales tax was being evaded on three-wheeled mo-tor-cycles. ... Mr Saunders had said the three-wheeled motor-cycles did- not .qualify for a refund of saleb tax and this had been a matter of some controversy between dealers and the Customs Department for some time.

He said the Minister had made.it clear that the sales tax refund provisions would not be widened to include these machines. As a result, farmers had put pressure on dealers to incorrectly invoice this model of motor-cycle. Mr Cadenhead had submitted that no case had been made out in the charge against W. U. Baker and Sons as the invoice showing the machine to be a Honda TCIBS instead of ATCIBS was still a substantial compliance with the description of the machine.

The Judge held that although the description of the

machine on the invoice was incomplete (Honda did not manufacture models designated TCIBS), the invoice was substantially correct and could not be reasonably described as not genuine.

An intent to defraud the department -had not been proved. In the charges against Holland’s Motor-cycles, Ltd, defence evidence had been that a salesman employed by the firm had not been" instructed to make out the invoices the way he did. . In his decision the. Judge said that undoubtedly offences against the Sales Tax Act had been committed in the misdescription of the vehicles on the invoices by Staff. ;

However, he held on the evidence that the, company’s two executive officers were riot privy to the irregularities; they’ were concerned in other specialised areas of the business, and .were not aware of what had occurred in the invoicing, before the Customs investigation.

The company was not therefore vicariously liable on the charges.