Former secretary faces sales tax breaches

Press, 2 November 1984, Page 8

Former secretary faces sales tax breaches

A former accountant and secretary of a Christchurch firm told a customs officer investigating the alleged failure to furnish monthly sales tax returns to the Customs Department that he had been acting on the instructions of the managing director, Men the company had liquidity problems. This evidence was heard in the District Court yesterday when the former secretary faced 22 charges of breaches of the Sales Tax Act, involving deficiencies, said to total $81,700, in sales tax returns to the department. ‘

After hearing depositions of evidence of five prosecution witnesses Messrs J. H. Christensen and J. W. Taylor, Justices of the Peace, held there was sufficient evidence to commit the defendant for trial.

They remanded him on

bail to November 23, pending a date for trial in the District Court. Defence counsel (Mr J. J. Brandts-Giesen) reserved his defence. His application for continued interim suppression of the defendant’s name was granted. Mr D. J. L. Saunders appeared for the Customs Department. The charges alleged that in 22 months between July, 1979, and July,; 1982, the defendant made . false declarations in the monthly returns of sales tax payable.

The department contends that in the months concerned the sales tax which should have been returned to the department totalled $88,863. In 19 months there were no returns furnished and in three months there were deficient returns, giving a

total deficiency of sales tax returned of $81,700, it was alleged. Evidence was given that, after the company got into financial difficulties, an investigation showed certain liabilities, including sales tax, had been understated.

Customs officers were then brought into the investigation. In an interview with a senior customs officer, the defendant said when explaining why some returns had not been furnished that he had been acting under instructions of the managing director. As far as he was concerned it was an ongoing instruction.

Asked about some returns having been furnished during the three years, the defendant told the officer that it had been in the managing director’s mind to “keep something up to them” (the department)

while the company got through its financial difficulties.

The managing director at the time denied in evidence having given such instructions to the defendant. He detailed the firm’s procedures relating to invoicing, and the exacting of sales tax amounts, for furnishing to the department.

He said that, on numerous occasions, he had asked the defendant if the sales tax documentation was in order and was told there were no problems. He left it at that as he had' no reason to believe that things were not in order.

Cross-examined, the managing director denied that the company had been in severe financial, difficulties between 1979 and 1982.

“The pressure came on in 1981-82,” he said.