Karimjee and Ors. v. Commissioner Gen. of Income Tax Civ. Case 180-D-1970; 29/2/72. Saidi, C. J.

 

Karimjee and Ors. v. Commissioner Gen. of Income Tax Civ. Case 180-D-1970; 29/2/72. Saidi, C. J.

A suit was filed on behalf of the Yusufali Charitable trust against the Commissioner General of Income Tax claiming the refund of the sum of Shs. 865,055/38, levied on the dividends accrued to Karimjee Jivanjee Estates Ltd. in which the Charitable trust are shareholders. The sum comprised three years levy. In the past the practice was for the company to deduct and remit to the defendant the required tax from the dividends due to the trust and the defendant to refund it to the trust because it was exempted from paying tax. In 1970 so as to prevent the application of the Limitation Act the plaintiff wrote to the tax department demanding refund of the tax for 1963-65 and threatened legal action if no payment was made within a month. Defendant stated in his reply that the claim had been referred to the Head Office and asked for more time for a decision. The suit was then filed in order to save the tax paid in 1963 from limitation. Subsequently, the defendant wrote acknowledging an obligation to refund the tax enclosed a cheque for the amount claimed. The only issue was one of cost.

            Held: “The facts in the record clearly show that the Defendant had not contested or denied the claim for the refund of tax. They merely wanted time to consult their Head Office. It is also abundantly clear that the Plaintiff-Trust filed the suit in order to save the tax for 1963 from limitation and this is what their advocate had made out in his letter of 21^st October, 1970. Although the tax for 1963 was outstanding for almost 7 years it appears no serious efforts had been made prior to July, 1970 to claim refund as the letter of 21^st October, 1970 refers to another letter of 8^th July, 1970 which had not been acknowledged by the Defendant. For these reasons I do not think that the defendant should be made to bear all the costs of the suit when they had not contested the claim or refused to pay but I feel that the Court fees paid by the Plaintiff-Trust should be refunded to them by the Defendant and I so order.”