By Barbara Gayle,
Staff Reporter
THE $30-million General Consumption Tax case brought against one of the companies owned by JLP Leader Edward Seaga took an unusual turn yesterday.
The Court of Appeal, after inviting the lawyers representing the companies to apply for an adjournment so that a foreign-based company could register as the company responsible to pay the tax, dismissed the application after a short adjournment.
After the application was dismissed and the Court ruled that the appeal should continue, Emil George, Q.C., who is representing Seaga's two companies, Premium Investments Ltd. and its subsidiary, Town and Country Resorts Ltd., announced that before the appeal was completed, attempts would be made to have DHC Ocho Rios Hospitality Corporation, in Delaware, USA register in accordance with the Companies Act and the General Consump-tion Act so that it will be responsible for the GCT.
Mr. George on the court's invitation had applied to the court for an adjournment of two to three months so that DHC could comply with the laws here. But Mr. Hugh Small, Q.C., who represents the GCT Commissio-ner, objected to an adjournment. Mr. Small argued that DHC's compliance with its responsibility under the Act "would not in any way perfect the issue which this court has to decide".
He said the registration of DHC at "this point" would not make it a registered taxpayer so as to enable the Commissioner of the GCT to pursue any proceedings to recover taxes.
Provisions
Mr. Small said that the more glaring deficiencies by Town and Country Resorts Ltd. (the company summoned for the GCT), was that it failed under the provisions of the Companies Act to give the Commissioner notice of the fact that it was no longer carrying out the taxable act to which it was registered. Mr. Small said there had been a general non-compliance and disregard for the provisions of the GCT Act. He said that for the party which was before the court to say "put off your adjudication in a proceeding we had initiated so we can go and persuade a foreign corporation to comply with something that runs into millions of dollars, is something which this court should frown on."
Town and Country Resorts Ltd. was summoned to the Ocho Rios Resident Magistrate's Court in 1999 for GCT amounting to $30 million in addition to interest of $20 million. It is being contended by the Commissioner that Town and Country Resorts as operator of the Enchanted Gardens Hotel failed to pay over the money.
Town and Country Resorts is contending that it was not the operator of the hotel at the time the tax was collected because it had an agreement with DHC which was then the operator of the hotel.
Mr. George and attorney-at-law Juilianne Mais are asking the court to find that DHC was the operator of the hotel. They have admitted that Town and Country Resorts had failed to notify the Commissioner that it was no longer the operator of the hotel. Mr. George said that Town and Country Resorts had paid $4 million of the amount but it was sometime after it was summoned to court that lawyers discovered that in law it was DHC which collected the tax and was therefore liable to pay it. The court is being asked to determine who is an operator in accordance with the laws.
The companies are appealing against a Revenue Court ruling that Town and Country Resorts was liable to pay the GCT.
When the hearing continued yesterday Mr. Justice Henderson Downer suggested that perhaps the companies should consider making an application for the appeal to be adjourned so as to allow DHC to comply with the Companies and the GCT Act.
Mr. George, who is representing the companies, said it would be foolhardy on his party not to adopt the suggestion by the court. He said he would make the application which was that the originating summons be adjourned to give the appellants an opportunity to persuade DHC to register under the Companies Act and comply with the requirements thereof.
After the application was made the court adjourned for 10 minutes and on resumption announced that it had been refused.
Mr. George who along with attorney-at-law Julianne Mais are representing the companies, will continue their submissions today before the Court of Appeal comprising Mr. Justice Downer, Mr. Justice Donald Bingham and Mr. Justice Algernon Smith (acting) .
