(1987) 3 CLR 41
[*41]
[A. LOIZOU.J.]
IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION
FRANCOUDI & STEPHANOU LTD.
Applicants.
v.
THE MUNICIPALITY OF LIMASSOL.
Respondent.
(Case No. 598/84).
The Municipal corporations Laws 1964-1984-Annual fee for carrying on business-Sub-paragraphs 1(d) and 1(e) (i) (cc) of Part 1 of the 10th Schedule as amended by Law 62/84-Applicant company carried on the business at «shipping and travel agent and other related business»-In the light of the principle that in case of doubt as to the meaning of a taxing statute the interpretation most favourable to the taxpayer should be adopted the applicant company ought to have been taxed under para. 1(e) (cc) and not under para. 1(d).
Constitutional Law- Taxation-Constitution. Art. 24-Retrospectivity of a taxing statute-A taxing statute enacted in a year is not retrospective if It imposes taxation regarding the period starting on the first day of the same year.
Interpretation of statutes-Taxation-In case of doubt the meaning most favourable to the taxpayer should be preferred.
By means of this recourse the applicants, a private company with limited liability, carrying on the business of shipping and travel agents and other related business, impugn the validity of the decision, whereby an amount of £500.- was imposed on them as an annual fee for carrying on business for the year 1984.
The submissions of the applicants are two, namely that the said taxation was imposed retrospectively in contravention of Art.24 of the Constitution because Law 62/84, amending the relevant scales was published on 30 6.84. whereas the sub judice taxation related to the whole year 1984, and that the taxation in question ought to have been made under sub-paragraph 1(e)(i)(cc) of Part I of the 10th Schedule of the said laws, in accordance, with which sub paragraph the annual fee cannot exceed £275, and not, as it was actually done, under sub-paragraph 1(d) thereof. [*42]
Held, annulling the sub-judice decision:(1) A taxing Law enacted within the year in respect of which taxation is imposed is not retrospective as regards the period starting on the first day of the year to the date of its enactment.
(2) As it is obvious from the definitions given in various dictionaries of the words «###» and «###» (by ship-adverb), a «shipping», «shipping agent», «business or work» (in the plural), there are alternative meanings and in any event some doubt as to their exact meaning, which becomes greater, if one examines the ordinary meaning of the other business referred to in para. 1(d), namely «insurance, air transport or banking business».
(3)The Court is inclined to the view that the words «shipping» and «shipping business», refer in the contest they are used to the transportation by a ship and by a shipping agent and not to the business of a shipping agent, who normally transacts business for the owner.
(4) It is a cardinal rule that in interpreting a taxing statute the Court prefers in case of doubt out of two reasonably possible alternative meanings the one more favourable to the taxpayer. The Court, therefore, came to the conclusion that the applicants’ business (a shipping and travel agent and other related business) do not bring the applicants within the ambit of the said sub-paragraph 1(d).
Sub-judice decision annulled.
No order as to costs.
Cases referred to:
Hadjikyriakos v. The Republic, 5 R.S.C.C. 22;
Aristidou v. The Improvement Board of Ayia Phyla (1965) 3 C.L.R. 686;
Serghios Antoniades and Others v. The Republic (1979) 3 C.L.R. 641;
Vita Ora v. The Republic (1973) 3 C.L.R. 273.
Recourse.
Recourse against the decision of the respondent to impose on applicants the amount of £500.- as annual fee for carrying on business for the year 1984.
G. Michaelides, for the applicants.
J. Potamitis, for the respondent.
Cur. adv. vult.
A. LOIZOU J. read the following judgment. By the present recourse the applicant Company seeks a declaration of the Court that the decision of the respondent Municipality communicate to them by letter dated 28th August 1984, (Appendix A), by which there was imposed on them the amount of £500 as annual fee for [*43] carrying on business for the year 1984 is null and void and with no effect whatsoever.
The applicant Company is described in paragraph 1 of their application as a «private Company with limited liability with an issued share capital of £159,080 and carrying on the business of shipping and travel agents and other related business» (###)
The respondents in paragraph 1 of the statement of facts in their notice of opposition describe them as «carrying on shipping and or other related business with permanent office within the municipal limits of Limassol, (###)
The contentions of the applicant Company are two. Firstly that the said taxation was made in contravention of the Municipal Corporations Laws 1964-1984, and particularly of part I of the 10th Schedule thereof as they come, it is claimed, within sub-paragraph 1(e) (i) (cc) in accordance with which the annual fee cannot exceed the amount of £275, that it is arbitrary and not based on correct and reasonable criteria and that it is null and void as made in excess and or abuse of power. Secondly that the said taxation was imposed retrospectively in contravention of Article 24 of the Constitution.
I feel that I can briefly dispose first of this latter ground on which there is ample authority to the contrary. It is well settled that a Taxing Law enacted within the year in respect of which taxation is imposed is not retrospective as regards the period starting on the first day of the year to the date of its enactment. See Hadjikynakos v. The Republic, 5 R.S.C.C. p.22 at pp.29-30 Aristidou v. The Improvement Board of Ayia Phyla (1965) 3 C.L.R. 686 at pp. 689-690; and Serghios Antoniades and Others v. The Republic (1979)3 C.L.R. 641.
The fact that Law No. 62 of 1984 which amended the basic Law by the replacement of Part 1 of the 10th Schedule with a new one introducing new scales, published in the official Gazette of the Republic on the 30th June 1986, does not render the taxation imposed thereunder in respect of the whole year 1984 retrospective. Even in respect of the first half year, its enactment on the last day of June, brings it within .the principles enunciated in the aforementioned [*44] cases as regards the first six months of the year, if such a differentiation could at all be made.
As regards the first ground of Law relied upon reference need be made to paragraphs (d) and (e) (i) (cc), of Part I of the 10th Schedule, as amended by Law 62 of 1984.
«###»
And in English:
«(d) Companies with limited liability which carry on insurance, shipping, air or banking and other commercial business, as well as finance organizations
(e) Companies with limited liability which do not fall within paragraph (d) above:
(i) private companies: either local or foreign, either controlled by foreigners or not –
………………………
(cc) with issued share capital over £10,000 or with a business turnover over £100,000 or with a number of employees over 10:»
Under paragraph (d) the prescribed annual fee will not exceed one thousand pounds, whereas under paragraph (e) (i) (cc), £275. [*45]
It has been argued on behalf of the applicants that the contention of the respondents that the applicants carry on shipping business and therefore they come within the ambit of paragraph (d), is wrong, as they are shipping and travel agents who represent foreign shipping firms but they do not themselves carry on shipping business.
In support of the aforesaid contention I was referred to the definition of the words «###» which are defined in the «###» Second Edition p. 106, where «###» is defined as «###», «transportation with a ship by a shipping company», and «###» by ship (adverb) » ###», «that which refers to shipping: shipping transport».
On the other hand the respondent Municipality by their notice of opposition and their address sought to justify this annual fee imposed on the applicant Company, on the sole ground that the only possible answer to the question, what business does the applicant Company carry out, is « ###»,«shipping business».
«Shipping», is defined in the Shorter Oxford Dictionary as «A ship or ships for the use or accommodation of a person or thing. Ships collectively; the body of ships that belong to a person’s country’s fleet, that frequent a particular port or harbour, or that are used for a certain purpose. Navigation-A voyage, a sailing- The action of putting persons or things on board ship or transporting them by ship.».
«The shipping agent» is defined in the same dictionary as «a licensed agent who transacts a ship’s business for the owner». And a «shipping office» is «an office where seamen sign on for a voyage; an office where as agent receives goods for shipment».
The word «###», «business or work» (in the plural) is defined in the New Dictionary by Demetrakos as «###», «the radius (range) of action of an enterprise».
It is obvious from the aforesaid definition of the material words of this statutory provision, that there are alternative meanings and in any event there are some doubts as to their exact meaning which becomes greater if one examines the ordinary meaning of [*46] the other business referred to in paragraph (d) herein-above set ###t, namely, «###»(insurance, air transport, or banking business) if we ###ke for example the air transport business, could in the ordinary ###nse include a travel agent who secures a passage or cargo for his clients on an airplane belonging to an airways company, or does it mean that it refers to the business of an airways company? The answer in my view is in the negative, a travel agent or an airways agent does not carry out air transport business.
In the light of the above I am inclined to take the view that «###» «shipping» and «###» «shipping business» refer in the context in which they are used to the transportation by ship and by a shipping Company and not to the business of a shipping agent, who normally transacts a ship’s business for the owner.
In the circumstances therefore with regard to the interpretation a statutory provision as the one in hand, which imposes taxation, one should bear in mind the cardinal rule that if there is any doubt about the construction of a particular provision a Court, should have preferred out of two reasonably possible alternative eanings that which is more favourable to the taxpayer. (See Vita ra v. The Republic (1973) 3 C.L.R. 2.73, 280).
Guided by the aforesaid principle, I have come to the conclusion that the admitted business of the applicant Company of «a ###ipping and travel agent and other related business» does not ###ing them within the ambit of paragraph (d) of Part I of the Tenth schedule and therefore not liable to taxation under that paragraph.
For all the above reasons this recourse succeeds. The sub judice decision is hereby annulled but in the circumstances there will be ### order as to costs.
Sub judice decision annulled.
No order as to costs.
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