FALSE RETURNS

Wanganui Chronicle, Volume 80, Issue 78, 2 April 1938, Page 9

FALSE RETURNS

"A MOST SERIOUS CASE” AUCKLAND MAN FINED FAILURE TO DECLARE TRUE INCOME [ Per Press Association.! AUCKLAND. April 1. “This is one of the most serious cases of its kind that has come before this Court for many a day,” said Mi G. S. Meredith, proceeding in the Magistrate’s Court on behalf of E. b. Smith, Depuly-Commisioner of Taxes, against Monte William Bernai I Winter (Mr North), against whose name stood a number ot charges of breaches of the Land and Income Tax Act and the Employment Promotion Act. The defendant is a ladies’ hair* dresser, and his business was describ* ed by Mr Meredith as “one of th? most flourishing and fashionable” ol its kind in Auckland. Winter was proceeded against on four separate charges of wilfully making false returns under the Land and income Tax Act, and on a further charge, under the Employment Promotion Act Regulations, of obstructing, or hindering, an inspector Alternative charges under the Land and Income Tax Act w r ere withdrawn, as were certain further charges under the other Act. Mr Meredith explained that the reason why he was asking that these should be withdrawn was that the alleged false declarations under the Employment Promotion Act were substantially in connection with the same transactions as were charged under the Land and Income Tax Act. In view of the fact that a plea of guilty was being entered in respect of the charges under that Act, it was considered that the ends of .justice would be met by proceeding only with those charges.

On the first of the tax charges, the magistrate, Mr C. R. Orr-Wftlker, imposed a fine of £lOO. Winter was fined £5O on each of the other three tax charges, and £lO on tnat of obstructing or hindering. No doubt, said the magistrate, further penalties would be imposed by the Commissioner of Taxes.

The charges on which Winter waft before the Court w'ere serious said Mr Meredith, and the conduct which resulted in them iviounted, without doubt, to a deliberate attempt over a number of years to vefraud the revenue. Even after Winter had become aware that a departmentaf inspector was inquiring into the matter, he had endeavoured to withhold information and make misleading statements. It was alleged that when asked lo produce his bank books and other books for inspection, Winter, on November 11, had shown an inspector a set of double entry books, a Union Bank pass book and wages book. Next day Winter told the inspector that there were no other bank accounts, either in his name, his wife’s name or his child’s name.

“The inspector commented on the smallness of Winter’s drawings,” added Mr Meredith, “but he stated emphatically that his drawings were approximately £4 5s a week, as shown by the only book he produced. He admitted that he paid £2 5s a week rent, owned a house at Piha and had. been for a trip overseas. He said his wife owned a motor-car, and the inspector ascertained that this had been paid for by Winter. He stated that he lived very economically and that part of the cost of his trip and payment of the car had been saved out of his drawings. He was again asked for other accounts, but assured the inspector that there were no others. “On November 24,” Mr Meredith continued, “the inspector ascertained, through a firm where Winter bought the car, that he had an account at the Commercial Bank of Australia, Wellesley Street, 'iowards the end of the month, Winter admitted making falsw statements, and his solicitor, the late Mr Kent, produced 23 Auckland Savings Bank accounts on Winter’s behalf, and also a pass book relating lo a Commercial Bank account. Winter assured the inspector that he now had all the bank accounts. Later, the inspector ascertained that some of Winter’s money had been paid in the name of Mrs Winter. Then he noticed certain payments to a firm called the I Jamal Permanent Waving Products, I which Winter stated was conducted by his wife, and had been opened by [ him for trade reasons. He produced a bank account relating to this firm. I His method seemed to have been lu ' show part of his takings in his double ■ entry book, the balance being paid , either into the Commercial Bank account, or one or other of the Saving* Bank accounts. He returned for income tax purposes only the amount shown in the double entry book.” Summarising, Mr Meredith said that only one bank book was produced when requested originally, and 27 had been withheld. Winter had returned the following amounts with the i department’s calculation of the true i amounts in parentheses: —1933, £2od (£1008); 1934, £lB3 (£1072); 1935, £173 (£1184); 1936, £lBO (£740); 1937, £223 (£2144). As a result there was a discrepancy of unpaid tax amounting to £643, as at March 31, 1937. Part of this had now been paid. At the same date there had been £4400 in cash undisclosed in the various accounts. Mr North said that Winter had informed him that he had started his system some time ago. and the matter had increasingly become a burden on his conscience, but he had found it very difficult to find a solution. In connection with the obstruction charge, when the inspector had come to see him his desire was to obtain advice from his solictor. He did not know how lo act and tried to stall for a time. Regarding the Savings Bank accounts. Mr North said the bank allowed only one account in each name and paid interest on only £2OO. The reason for th? numerous accounts had nothing to db with income tax, bul was for the purpose of obtaining interest on all the money. “We do know’ that income tax evasions occur on a huge scale in this country, as we habe been something about it in recent legislation in the House,” added Mr North. “He should net be made a scapegoat for every defaulting taxpayer throughout the country.” The magistrate said the facts disclosed a very serious offence of a type comparable with the sustenance frauds he had had to deal with.