Beyond the Deadline: The End of the Battle Against Time Limit Calculation

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by Mariyam Naufa

The legal battle that ensued after the High Court’s judgment in MIRA v Moosa Naseem1 sent shockwaves through the realm of tax disputes. 

The battle has, however, ended in perpetuity, one hopes. The Supreme Court has, finally, in Ooredoo v MIRA2 unequivocally admonished the High Court for dismissing several tax cases on the basis that those cases were filed (both at TAT and the High Court) out of the time limit, by calculating time limits while disregarding the long-lasting practice of calculating time limits for filing exclusive of holidays. 

The impact of Moosa Naseem case

Moosa Naseem case was the first case where the High Court adopted the interpretation that all periods stipulated in the Tax Administration Act3 (TAA) must be calculated in accordance with section 77(b) of the Tax Administration Regulation4 (TAR). It had the far-reaching consequences of the High Court dismissing numerous tax cases pending both the High Court on the basis that those cases had been filed outside the prescribed time limits for filing.

However, the saga took a dramatic turn when the Supreme Court delivered its judgment in D.I v MIRA 5 and MIRA v Dhiraagu 6, holding that delegated legislation, such as TAR, must only be applied within the scope of its enabling Act, TAA. The Supreme Court further emphasised that matters pertaining to time limits and their calculations should be left to the courts, given the TAA’s scope to govern administrative aspects of the tax system. Unfortunately, however, even with the judgments in D.I and Dhiraagu, MIRA was not ready to yield its weaponry and continued to submit procedural objections maintaining that the taxpayers had filed their cases out of time limit.

MIRA’s strategy thus far

Initially, MIRA attempted to appeal to the Supreme Court the High Court’s judgment in the Moosa Naseem case. However, the Supreme Court declined to grant leave to appeal to MIRA, stating that MIRA had not presented sufficient grounds to demonstrate that the High Court had erred in its judgment in the Moosa Naseem case7. 

MIRA further attempted to maintain that the High Court’s ruling in the Moosa Naseem case is applicable to the time limit to file a case at the Tax Appeal Tribunal (TAT). In doing so, MIRA continued to submit procedural objections at the TAT arguing that taxpayers had filed cases at TAT out of the time limit for filing. In doing so, MIRA insisted that section 77(b) of the TAR should be applied when interpreting section 44(a) of the TAA which provides for the time limit for filing cases at the TAT. MIRA justified MIRA’s position on the basis of the High Court’s judgment in the Moosa Naseem case. 

The deceptive aspect of MIRA’s strategy lies on two fronts. Firstly, it lies in the fact that MIRA’s initial position was that the High Court had erred in its judgment in the Moosa Naseem case – hence MIRA’s attempt to appeal the judgment at the Supreme Court. However, MIRA further attempted to apply the holding in the Moosa Naseem case to try and dismiss the tax cases filed by taxpayers. Secondly, by advocating for calculating the time limit for TAT filings inclusive of holidays, MIRA sought to dismiss taxpayers’ cases at TAT and shorten the time available for taxpayers to submit their cases. On the other hand, MIRA conveniently maintained that holidays must be excluded from the time limits for High Court filings, allowing MIRA and other appellants more time to file appeals. 

This approach by MIRA transpired an apparent inconsistency in MIRA’s position which seems to stem from the fact that it is always taxpayers that file cases at TAT to contest MIRA’s decisions, whereas, appeals of tax cases at the High Court may be initiated by either MIRA or taxpayers.  This selective approach by MIRA in interpreting and applying time limits also revealed a biased disposition towards taxpayers. As a state authority, MIRA is entrusted with considering the rights of taxpayers when exercising its authority. However, MIRA’s strategy thus far appears to be motivated by an objective to maximise government revenue rather than protecting taxpayers’ rights and ensuring a reliable and consistent system. 

The Ooredoo case and its significance

The recently concluded Ooredoo case serves as a prime example of MIRA’s attempt to employ Moosa Naseem’s holding to dismiss a taxpayer’s case at the TAT. Even more notably, MIRA sought to dismiss the case filed by Ooredoo after the case had been ongoing at the TAT for more than two years, and after all hearings at the TAT had already been concluded.

As expected, the judgment in the Ooredoo case was delivered in favour of the taxpayer, Ooredoo. The primary holding was that procedural objections relating to procedural improprieties in courts’ or tribunals’ acceptance of a case must be raised at the preliminary stage of the case. 

What sets the judgment in the Ooredoo case apart is Justice Suood’s explicit condemnation of the High Court’s practice of haphazardly dismissing cases without considering the gross injustices such decisions may inflict on ordinary individuals seeking justice through the established legal systems. Justice Suood highlighted that the High Court’s decision to deem Ooredoo’s case at the TAT as filed out of time, based solely on the calculation of time limits inclusive of holidays, disregarded the decade-long practice of calculating time limits exclusive of holidays for filing both at the TAT and the Court. Justice Suood aptly emphasised that by the time of the High Court’s ruling, taxpayers had relied on this practice, making it grossly unjust to retroactively deny them the ability to proceed with their cases based on a sudden change in the interpretation of the law introduced by the High Court in Moosa Naseem case.

Final thoughts…

The judgment in the Ooredoo case came after the Supreme Court had already, in D.I and Dhiraagu cases where we (CTL Strategies LLP) represented the taxpayers, held that the provisions in the TAR cannot be used to calculate the periods given in the TAA. However, owing to MIRA’s insistence upon dismissing taxpayers’ cases arguing that the cases were filed out of the time limit based on the holding in Moosa Naseem, the judgment in the Ooredoo case cannot be regarded as anything short of a clear victory to the taxpayers whose cases had been held in limbo due to MIRA’s such insistence. Justice Suood’s explicit declaration in the Ooredoo case judgment was that courts must not entertain any grossly unfair attempt by MIRA to retroactively apply the principles established in Moosa Naseem and dismiss cases that were already filed relying on the longstanding practice of excluding holidays when calculating time limits.

The judgment in the Ooredoo case highlights that courts and tribunals should refrain from dismissing ongoing cases based on trivial procedural objections raised midway of the case proceedings, without giving any regard to its implication on the parties’ right to seek justice through the available avenues. It also underscores the importance of considering the implications sudden changes to established practices may have on the parties involved, particularly when parties have relied on those established practices. In fact, the Ooredoo case’s judgment must be accepted as another reminder from the Supreme Court for stakeholders, especially State authorities such as MIRA to advocate for a system that upholds justice, respects established practices, and promotes equitable outcomes for all. 

So where does all this leave us now? It leaves both sides with a sense of exhaustion and frustration. Though by the end the outcome has been proclaimed a victory for the taxpayers, it is undeniably disheartening to acknowledge that this battle was entirely unnecessary—a clash reluctantly embarked upon by taxpayers due to the strategy adopted by MIRA to quarrel over squabbles and willingness to invest time in wasteful satellite litigation unconcerned with the merits of the underlying claim. Such battles, fueled by inconsequential disputes, often leave a lingering bitterness in their wake. Although the taxpayers can claim this as a victory, it remains tainted by the consequence of taxpayers being deprived of access to the legal system for years and years to seek the resolution they had all the right to seek.

 

(Photo by Zeferli on Unsplash)

 

References

  1. Maldives Inland Revenue Authority v Moosa Naseem, 2021/HC-A/29.
  2. Ooredoo Maldives Plc Ltd v Maldives Inland Revenue Authority [2023] SC 25.
  3. Tax Administration Act (Act Number 3/2010). By the time of writing, the 30-day periods for filing cases at TAT and the High Court has been increased to 60-day periods via the Third Amendment To The Tax Administration Act (Act Number 27/2020).
  4. Tax Administration Regulation (Regulation Number 2013/R-45). By the time of writing, the provisions in the Regulation relating to time limit calculation has been amended via the Sixth Amendment To The Tax Administration Regulation (Regulation Number 2021/R-172) to provide for time limit calculations exclusive of holidays, see s 71-1 of the Tax Administration Regulation.
  5. D.I Resorts Pvt Ltd v Maldives Inland Revenue Authority [2023] SC 71.
  6. Maldives Inland Revenue Authority v Dhivehi Raajjeyge Gulhun Plc Ltd [2022] SC 41.
  7. See Supreme Court’s Registrar’s Decision in MIRA v Moosa Naseem [SC-197/REG/2021/151].