SEVERE REBUKE

Southland Times, Issue 22132, 28 September 1933, Page 8

SEVERE REBUKE

‘ CUSTOMS DEPARTMENT ADMINISTRATION OF SALES TAX CRITICISM BY MAGISTRATE (Per United Press Association.) Christchurch, September 27. Severe criticism of the Customs Department and its administration of the sales tax regulations was expressed by Mr Lawry, S.M., in the Magistrate’s Court, when the first prosecution in New Zealand was brought by the department under the Sales Tax Act 1932-33.

The Magistrate characterized certain actions of the department in the case under his notice as illegal and suggested that in view of the facts two of the three charges should be withdrawn by the Collector of Customs and sales tax for Christchurch (Mr C. O. Trownson).

The Magistrate suggested that the department was making a scapegoat of the firm concerned.

Mr Trownson finally agreed to withdraw two of the charges and the Magistrate reserved decision on the other count.

The Sterling Clothing Manufacturing Company, Limited, was charged with failing to deliver to the Collector of the Sales Tax a return setting out the aggregate amount of sales values of all taxable goods sold by the company during the month ended Maj r 19. Similar charges were laid in respect of the months ended June 19 and July 19.

Trownson asked for a conviction on all three charges as a warning to other firms. He did not ask for a fine.

The Magistrate: Yes, but the Act fixes the minimum penalty. I cannot fine defendant less than £25 on each charge if I convict him. Why does the department not prosecute other firms. You bring three charges and apparently ask me to fine this defendant £75 as a warning. Why pick on this particular firm?

Trownson said the department intended to prosecute other firms which had been guilty of the offence. The department was not prosecuting as a warning altogether. It regarded the offence as serious.

The Magistrate: Of course it is serious, and the Act provides for its seriousness, but you want to rub it in by prosecuting three times over. The Magistrate after further discussion with Trownson said the department had apparently imposed on defendant a 15 per cent, penalty which it had no right to impose. Provided the tax was paid on the day the return was made a remission of 5 per cent, was allowed for in the Act and if they have not paid within two months of making the return, a ten per cent penalty was payable. Defendant had complied with the conditions but had not been allowed the discount and the penalty had been charged. Later the Magistrate remarked that as the department had bungled the whole mattei" it was questionable whether any penalty should be imposed. Eventually two of the charges were withdrawn and the Magistrate reserved decision on the third. This would enable counsel for defendant to apply for a refund of the penalties and a remission of the minimum fine.