Re the Interpretation and Application of Constitution s37(4)(a), and s327 and s333 of the Income Tax Act 1959 (Amended) [1991] PNGLR 211

• Jurisdiction: Papua New Guinea
• Judge: Salika J:
• Judgment Date: 05 July 1991
• Citation: [1991] PNGLR 211
• Docket Number: Supreme Court Reference No 2 of 1990
• Court: Supreme Court
• Year: 1991
• Judgement Number: SC407

Full Title: Supreme Court Reference No 2 of 1990; Re the Interpretation and Application of Constitution s37(4)(a), and s327 and s333 of the Income Tax Act 1959 (Amended) [1991] PNGLR 211

Supreme Court: Kidu CJ, Kapi DCJ, Amet J, Hinchliffe J, Salika J

Judgment Delivered: 5 July 1991

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SCR NO 2 OF 1990 RE CONSTITUTION S 37 (4) (A) AND S 327

AND S 333 OF THE INCOME TAX ACT 1959

Waigani

Kidu CJ Kapi DCJ Amet Hinchliffe Salika JJ

5 July 1991

INCOME TAX — Taxation prosecutions — Nature of proceedings — Criminal proceedings — "In accordance with usual practice and procedure of the court in civil cases" — Averments as proof of matters alleged — Denial of presumption of income — Proceedings unconstitutional — Constitution, s 37 (3) (4) (a) (10) ** Infra 2141 — Income Tax Act 1959, ss 299g (9) (10), 327 *** Infra 2112*, 333 (1) †† Infra 2113 .

CONSTITUTIONAL LAW — Constitution of the Independent State of Papua New Guinea — Basic rights — Protection of the law — "Presumption of innocence" — Until proved guilty "according to law" — Means whole body of law defined in s 9 — Constitution, ss 9, 37 (4) (a).

Held

(1) A taxation prosecution commenced by writ of summons for recovery of a pecuniary penalty under s 299g (9) and s 299g (10) of the Income Tax Act 1959, is a criminal proceeding.

(2) (Kapi Dep CJ dissenting) To commence such a taxation prosecution by writ of summons and to prosecute and proceed with it "in accordance with the usual practice and procedure of the Court in civil cases" pursuant to s 327 of the Act is unconstitutional in that it conflicts with s 37 (3), 4 (a) and (10) of the Constitution.

Discussion of the presumption of innocence until proved guilty "according to law" under s 37 (4) (a) of the Constitution.

(Per curiam) Proof of guilt of a criminal offence "according to law" means according to the whole body of law as defined in s 9 of the Constitution, that is, criminal law under statute or as has been shaped and developed as part of the underlying law pursuant to Sch 2.2 and Sch 2.3 of the Constitution by judicial pronouncements. It is now clearly part of the underlying law of Papua New Guinea, appropriate to its circumstances that "a person charged with an offence" which is criminal in nature, because it carries criminal sanctions, must be tried "in accordance with the usual practice and procedure of the Court in criminal cases" as are substantially embodied in s 37 of the Constitution and must be proved guilty beyond reasonable doubt.

(3) (Kapi Dep CJ dissenting) Section 333 (1) of the Income Tax Act 1959 which provides that in a taxation prosecution an averment contained in the claim is evidence of the matter averred, upon which evidence a prima facie case may be established, is unconstitutional in that it usurps the judicial function in respect of criminal offences.

Chief Collector of Taxes v Blasius Dilon [1990] PNGLR 414, overruled.

Cases Cited

Acting Public Solicitor v Uname Aumane [1980] PNGLR 510.

Avia Aihi v The State [1981] PNGLR 81.

Eiserman v Nanasti [1978] PNGLR 457.

Peter v South Pacific Brewery Ltd [1976] PNGLR 537.

State, The v Kuriday (Kearney Dep CJ, 18 June 1981 (N 300) unreported).

SCR No 1 of 1980; Re s 22a (b) of Public Offences Act (Papua) [1981] PNGLR 28.

SCR No 1 of 1981; Re Inter-Group Fighting Act 1977 [1981] PNGLR 151.

SCR No 1a of 1981; Re Motor Traffic Act [1982] PNGLR 122.

SCR No 2 of 1980; Re s 14 (2) of the Summary Offences Act (Papua) [1981] PNGLR 50.

SCR No 3 of 1982; Re s 57 and s 155 (4) of the Constitution [1982] PNGLR 405.

SCR No 5 of 1982; Hugo Berghuser v Joseph Aoae [1982] PNGLR 379.

SCR No 5 of 1985; Re Raz v Matane [1985] PNGLR 329.

Taxes, Chief Collector of v Blasius Dilon [1990] PNGLR 414.

Woolmington v Director of Public Prosecutions [1935] AC 462.

Constitutional Reference

This was a Reference to the Supreme Court pursuant to s 18 (2) of the Constitution which permits the referral of questions "relating to the interpretation or application of any provision of a Constitutional Law". The questions referred to are set out below.

Counsel

J Weigall, for the Collector of Taxes argued the negative case.

P Ame, argued the affirmative case.

Cur adv vult

5 July 1991

KIDU CJ AMET HINCHLIFFE JJ: In this Reference pursuant to s 18 (2) of the Constitution the National Court has posed the following questions for determination by this Court:

1. Is the "taxation prosecution" commenced by a writ of summons "prosecuted and proceeded with in accordance with the usual practice and procedure of the Court in civil cases", pursuant to s 327 of the Act, unconstitutional as being inconsistent with the s 37 (4) (a): Constitutional rights of "a person charged with an offence"?

2. Is s 333 (1) of the Act unconstitutional as being inconsistent with the s 37 (4) (a) Constitutional rights of "a person charged with an offence"?

3. If answers to 1 and 2 above be both negative, is the combined operative effect of s 327 and s 333 (1) unconstitutional as being inconsistent with the s 37 (4) (a) Constitutional rights of "a person charged with an offence"?

The Reference arises from a series of taxation prosecutions by the Chief Collector of Taxes pursuant to s 312 and s 323 of the Income Tax Act 1959 (as amended to date). The prosecutions were commenced by writs of summons pursuant to s 327 of the above-mentioned Act "the Act". This provision is in the following terms:

"A taxation prosecution in the National Court may be commenced, prosecuted and proceeded with in accordance with any rules of practice established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge."

The writs were specially endorsed under O 8, r 24 of the civil Rules of the National Court. The defendants defaulted in filing their defences. The plaintiff/prosecutor thus moved pursuant to these Rules to enter default judgments. This action was the equivalent in a criminal prosecution of asking the National Court to enter verdicts of guilty.

Part VII of the Act contains the relevant provisions under which the prosecutions were instituted. They provide as follows:

Section 312 Taxation prosecution

In this Part, "taxation prosecution" means a proceeding instituted in the name of the Chief Collector, in pursuance of Section 323 of this Act, for the recovery of a pecuniary penalty under this Act.

Section 323 Taxation prosecution

(1) A proceeding for the recovery of a pecuniary penalty under this Act may be instituted in the name of the Chief Collector by action in the National Court.

(2) Where the penalty sought to be recovered does not exceed K1,000.00, or the excess is abandoned, the proceeding may be instituted in the name of the Chief Collector by information in a court of summary jurisdiction.

Section 327 Prosecution in accordance with practice rules

A taxation prosecution in the National Court may be commenced, prosecuted and proceeded with in accordance with any rules of practice established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge.

Section 333 Averment of prosecutor sufficient

(1) In a taxation prosecution, an averment of the prosecutor or plaintiff contained in the information, complaint, declaration or claim is evidence of the matter averred.

(2) This section applies to any matter so averred although:

(a) evidence in support or rebuttal of the matter averred or of any other matter is given; or

(b) the matter averred is mixed question of law and fact, but in that case the averment is evidence of the fact only.

(3) Any evidence given in support or rebuttal of a matter so averred shall be considered on its merits, and the credibility and probative value of that evidence shall be neither increased nor diminished by reason of this section.

(4) This section does not apply to:

(a) an averment of the intent of the defendant; or

(b) proceedings for an indictable offence or an offence directly punishable by imprisonment.

(5) This section does not lessen or affect any onus of proof otherwise falling on the defendant."

The "prosecutions" as commenced by writs of summons, "prosecuted and proceeded with, in accordance with the usual practice and procedure of the Court in civil cases", pursuant to s 327 and especially endorsed under O 8, r 24 of the National Court Rules, all had statements of claim seeking orders that were in the following standard form:

"Statement of Claim

1. The defendant is an employer pursuant to s 299g of the Income Tax Act 1959 as amended.

2. The defendant is obliged pursuant to s 299g to register with the Plaintiff as a Group Employer.

3. The defendant is obliged under the provisions of s 299g (4) (f) (i) and (ii) to furnish to the Chief Collector of...