On 4 July 2022, the Supreme Court handed down judgment in an important case concerning the calculation of time limits for filing appeals of tax disputes.
The appeal forms part of the several pending appeals at the Supreme Court arising from the plethora of cases dismissed on procedural grounds by the High Court following its ruling in MIRA v Moosa Naseem1 (“Moosa Naseem case”) where the Court for the first time held that the time limit for filing appeals of tax disputes is to be calculated including public holidays and government holidays.
- On 16 December 2020, the Act on Third Amendment to the Tax Administration Act2 came into effect.
- On 1 July 2021, the High Court dismissed the appeal submitted by MIRA in the Moosa Naseem case on procedural grounds, holding that the MIRA had filed the appeal at the High Court out of the time limit for filing appeals from TAT. The High Court arrived at this sudden and novel decision after having raised the procedural issue of appeal time limit sua sponte and then deciding that the correct law to apply when calculating time limits and periods provided in the Tax Administration Act3 (“TAA”) is Section 77(b) of the Tax Administration Regulation4 (“TAR”), which stipulates that all time limits and periods are to be calculated inclusive of public holidays and government holidays.
- During the hearing in which the High Court raised this issue, both Dhivehiraajjeyge Gulhun (“Dhiraagu”) and MIRA also argued that appeal to the High Court was within the appeal period, however, did not elaborately discuss arguments. Specifically, MIRA did not state under any rule, where MIRA should be afforded with an extended period to appeal.
- Applying that rule established in the Moosa Naseem case the High Court also dismissed the appeal filed by MIRA on procedural grounds stating that, same as in the Moosa Naseem case the appeal in the present case was filed after the expiration of the time limit for filing the appeal at the High Court.
- MIRA appealed the High Court’s procedural decision to the Supreme Court, essentially contending that in line with the rule laid down by the Supreme Court in State (Ministry of Transport and Civil Aviation) v Dheebaajaa Investment5 (Dheebaajaa case) the time limit for filing an appeal at the High Court only started to run from the date of issuance of the full case report of TAT. If successful, this would in effect result in the date on which MIRA filed the appeal in this case to fall within the time limit for filing the appeal.
- In response, lawyers of Dhiraagu noted that the High Court had erred in applying Section 77(b) of the TAR in arriving at the rule to include holidays when calculating appeal time limits. The contention was that applying TAR to calculate the appeal time limit is in effect taking the Regulation out of the scope of its enabling Act – the TAA. In support of this, it was further highlighted that regulating appeal time limits falls within the parameters of courts’ jurisdiction as stipulated under Article 156 of the Constitution.
The issue for Supreme Court’s consideration was whether the time limit for filing the appeal at the High Court in the present case commenced only when the TAT’s full case report was issued to MIRA.
Supreme Court’s Decision
- The Supreme Court unanimously dismissed MIRA’s appeal primarily on the basis that the rule in Dheebaajaa case cannot be applied to the present case since the facts surrounding the present case were distinguishable from that of the Dheebaajaa case.
- In this regard, the Court observed that MIRA failed to raise any concerns at the High Court regarding the delays in receiving the full case report from TAT, but conversely continued to maintain at the High Court the appeal was filed within the time limit. Further, the presiding justices unanimously rejected MIRA’s argument that, same as in Dheebaajaa case the appeal time limit in this case must be calculated from the date of receipt of the full case report from TAT as then only will MIRA be able to avail the full benefit of its constitutional right to appeal.
- Expanding further on the rule in the Dheebaajaa case, the authoring justice – Justice Mahaaz clarified that the rule in Dheebaajaa case must not be read as having changed the starting point of appeal time limits to the date of issuance of the full case report. In the view of Justice Mahaaz, the rule in the Dheebaajaa case only intended to give parties in similar circumstances as the appellants in the Dheebaaja case the benefit of not having received the full case report from a lower court as an event beyond the parties’ control which in turn may permit them to apply for an appeal out of the generally applicable time limit.
- The Supreme Court also considered the rule laid down in Kapoorulla Yoosuf v Maldives Customs Service6 (“Kapoorulla case”) and held that the rule in the Kapoorulla case is only an exception to the general rule on new grounds of appeal. Elaborating on the exception, Justice Mahaaz declared that in determining whether the Kapoorulla-exception is applicable, it must be considered whether a new factual point needs to be determined. On that basis, since MIRA maintained at the High Court that the appeal to High Court was filed within the time limit and also since MIRA failed to note at the High Court the delays in the issuance of the full case report, the Court ruled that the Kapoorulla-exception is not applicable to the present appeal.
- The Court also agreed with the contention of Dhiraagu that the provisions of the TAR cannot be applied to determine issues relating to appeal time limits. In the opinion of Justice Maahaaz, when construing delegated legislation it is necessary to consider the purposes and scope of the enabling Act. Since TAR is a delegated legislation formulated under the powers given to MIRA under the TAA, the Regulation cannot be taken out of the scope of TAA which governs the administrative matters of the Maldivian tax regime. Hence, unless expressly provided in the enabling Act, matters relating to appeal time limits may only be regulated by courts.
This is the first time the Supreme Court addressed the issue of the correct law to apply when calculating the time limits and periods stipulated in the TAA. Following the procedural decision in the Moosa Naseem case, the High Court dismissed 18 cases appealed from TAT on procedural grounds holding that the appeals in each case were filed out of the relevant time limit for filing the appeal. The opinion of Justice Mahaaz on the issue has, however, made amply clear that the applying provisions of TAR to interpret matters such as calculation of appeal time limits which fall within the powers of the courts will be regarded as taking the Regulation out of the scope of its enabling Act. Accordingly, with the judgment of the Supreme Court in this case, the issue of the High Court applying TAR provisions and procedurally dismissing appeals is finally laid to rest.
The judgment also clarifies that a party cannot try and argue to apply the rule in the Dheebaajaa case belatedly at the Supreme Court without ever having raised at the High Court the issue of delays from the lower court or tribunal in the issuance of the full case report. As such, following the Supreme Court’s judgment, the best course for a party planning to appeal a lower court or tribunal’s judgment or decision, but is unable to do so due to the delays in the issuance of the full case report is to inform the relevant appellate court of such delays while also informing the lower court or tribunal of its appeal rights being hindered due to the delays in issuance of the full case report
Dhiraagu was represented by the lawyers of CTL Strategies LLP in these proceedings.References