By Barbara Gayle,
Staff Reporter
A COURT of Appeal judge has intimated that the two companies owned by JLP Leader Edward Seaga which are contesting the $30-million General Consumption Tax (GCT) "would be home and dry" if they could prove that the foreign-based company which they claim is responsible to pay the GCT is registered under the Companies Act.
Mr. Justice Henderson Downer, one of the three judges hearing the appeal made the observation yesterday during submissions in the appeal against a Revenue Court ruling.
The proof of registration would be a certificate from the Registrar of Companies to show that the company was registered outside of the island but was entitled to operate here.
Mr. Emil George, Q.C., who is representing the companies, Premium Investments Ltd., and its subsidiary Town and Country Resorts Ltd., will continue to reply to Mr. Justice Downer's questions when the hearing resumes today.
Town and Country Resorts was summoned to the Ocho Rios Resident Magistrate's Court in 1999 for failure to pay $30 million for GCT collected in relation to the Enchanted Gardens Hotel. The chargeable interest on the $30 million is $20 million.
Premium Investments Ltd., and Town and Country Resorts Ltd. took the matter to the Revenue Court contending that DHC Ocho Rios Hospitality Corporation, in Delaware, USA was responsible to pay the GCT as it was the operator of the hotel. The Revenue Court ruled that Town and Country Resorts was responsible to pay the GCT. The companies are appealing on the ground that the judge seemed to hold in error that because Town and Country Resorts Ltd. was registered as the taxpayer under the GCT Act and because the company failed to inform the Commissioner for GCT (now the Commissioner for the Taxpayer Audit and Assessment Department) that it no longer collected tax, then Town and Country Resorts was automatically liable to collect the tax and pay it over to the Commissioner.
Mr. George submitted before the Court of Appeal comprising Mr. Justice Downer, Mr. Justice Donald Bingham and Mr. Justice Algernon Smith (acting), that affidavits were submitted to the Revenue Court to show that the companies had entered into an agreement with DHC Ocho Rios Hospitality to operate the hotel. He argued that Ocho Rios Hospitality could be liable for GCT whether or not it was registered in Jamaica.
Mr. George submitted that the law stated in unequivocal language that it was the operator of the hotel who must pay the tax. "If the court finds that I am the operator, then I should pay. If the court finds I am not the operator then I should not be saddled with liability to pay," Mr. George said.
Also, he said that under the Companies Act, a foreign corporation was liable to daily penalties for certain breaches. He said that if the foreign company could pay penalties then there was no reason that it could not pay tax. Mr. George will continue his submissions today.
Mr. Hugh Small, Q.C., is representing the Commissioner.
