The Guyana Revenue Authority (GRA) has appealed the ruling annulling its decision to reassess and impose additional taxes on goods imported by Chinese businessman Shanglin Lin.
Finding that the GRA failed to establish the statutory basis upon which it embarked on reassessment of duty, High Court Judge Fidela Corbin-Lincoln in October of last year quashed its demands for Lin to pay the more than $5,000,000 in additional duties and taxes.
Seeking to have that order wholly set aside and/or reversed by the Court of Appeal, the revenue authority has lodged an appeal in which it argues that the judge made a number of legal errors in arriving at her decision.
Among those errors GRA contends, was the judge misdirecting herself in ruling that Section 17 of the Customs Act does not authorize or give it power to carry out an audit and impose further duty after goods have been entered, cleared and delivered.
GRA (the Appellant) argues too, that the judge erred in finding that Section 17 (2) does not by itself expressly empower the Revenue Authority to carry out an audit or reassessment of Lin’s goods in the manner it did owing to his failure to provide certain documents.
Another error which the GRA said the Court made, was to have nullified its audit and reassessment of duty on the goods imported between January and July 2019 and its consequent demand for additional duties as a result of Lin’s failure to provide the requested documents.
The Appellant further contends that the judge erred when she ruled that Section 233 of the Act does not confer any power on the revenue authority to conduct a review in accordance with the Fifth Schedule of the Act or any other part of the Act for failure to provide requested documents.
According to the GRA, the judge also fell into error when she ruled that it failed to establish the statutory basis upon which it embarked on a reassessment of duty on the Respondent’s goods due to his failure to provide requested documents under Section 233 and Regulation 36; or to cooperate with the audit and inspection under Regulation 204W.
The Appellant has expressed the view that Justice Corbin-Lincoln also erred in her finding that the statutory basis upon which it was determined that the goods were short-levied for the purpose of Section 17(2) had not been established.
Finally, the revenue authority is contending that the judge misdirected herself when she ruled that since the purported reassessment and demand for additional duty was unlawful, the consequential blocking of Lin from the integrated customs management system, ASYCUDA was also unlawful.
Lin is engaged in the importation of sanitary products manufactured in China. His action was in respect of several containers of adult and children’s diapers imported between January and July of 2019.
Following the demands made by the GRA, Lin subsequently discovered that he had been blocked by the revenue authority from electronically filing customs entries and declarations with the ASYCUDA system which it operates.
Lin would later file the action asking the Court to declare among other things, that any assessment of duties and taxes or demand therefor by the Post Clearance Audit Unit (PCAU) to be paid to GRA was without statutory power and unlawful.
It is against this background that he asked the Court to quash the revenue authority’s decision demanding he pay a total of $5,763,755 in additional taxes on duties which he argued through his attorney Manoj Narayan, was in breach of the Customs Act.
Additionally, he sought an order quashing the GRA’s decision blocking him from uploading documents to ASYCUDA.
Among other things, the GRA, however, argued that it is authorized by Section 17 (2) of the Customs Act to demand for short-levied duty and “upon failure of the individual to comply with the demand, certify upon any entry, specification or shipping bill subsequently presented to a proper officer by that individual, the particulars of the amount demanded.”
The revenue authority further contended that since ASYCUDA is the only method by which customs brokers can file and submit customs entries and declarations, a record of the demand was recorded in ASYCUDA which resulted in Lin’s inability to upload any further customs entries and declarations.
Justice Cobin-Lincoln in her ruling said that an examination of Section 17 (2) does not by itself expressly empower the revenue authority to carry out an “audit” or reassessment of Lin’s goods in the manner it did as a result of his failure to provide requested documents.
In those circumstances, she said she found GRA’s “audit” and or reassessment of duty on Lin’s goods and the consequent demand for additional duties as a result of his failure to provide 16 requested documents purportedly pursuant solely to Section 17 (2) of the Act, to have been unlawful.
She said also that Section 233 does not provide for a reassessment of duty on goods which have entered and been delivered for failure to provide documents. The judge said that the only sanction imposed for failure to provide documents in relation to goods which have entered, is a fine.
“It does not state that if the documents are provided the Respondent (then GRA) may reassess duty on goods …which have entered and been delivered based on the documents provided and/or any other basis,” Justice Corbin-Lincoln said.
The judge went on to reason that “specifically, Section 233 does not empower the revenue authority whether due to failure to provide documents or even if documents are provided to re-assess duty on goods which have entered and been delivered based on the documents provided or on some other basis so as to determine that duty has been “short levied” and thus give the Respondent the power to exercise the power given under Section 17 (2).”
Meanwhile, in examining Regulation 204W, the Court noted that the audit or inspection thereunder is “of the books and papers required to be kept and maintained by a broker.”
On this point, the judge said that assuming the “review” was being done pursuant to Regulation 204W, there is nothing within 204W which provides either that upon failure to provide the documents required to be kept for inspection or to submit to the audit; or even if documents required to be provided for inspection are submitted or an audit completed— that the Respondent may then embark upon a reassessment of duty.
In all of the circumstances, Justice Corbin-Lincoln said that the GRA had failed to establish the statutory basis upon which it embarked upon a reassessment of duty—including the methodology employed—on the Applicant’s goods which were entered and delivered due to his failure to provide requested documents under Sections 233 and Regulation 36 or to co-operate with the audit and inspection under Regulation 204W.
She said that the statutory basis upon which it was determined that the goods were “short levied” for the purposes of Section 17 (2) was not established.
She further added that since the purported reassessment and demand for additional duty was unlawful, the consequential blocking of the Applicant from the ASYUDA was also unlawful.
