Yangtze Construction Co Pty Limited v Commissioner General (SCA 24/23) [2024] (Arising in CC 07/2019) ((SCA 24/23) [2024] (Arising in CC 07/2019)) [2024] SCCA 10 (3 May 2024)

IN THE COURT OF APPEAL OF SEYCHELLES Reportable [2024] (3 May 2024) SCA 24/2023 (Arising from CC 07 of 2019) Yangtze Construction Co Pty Limited (rep by Mr. France Bonte) Appellant versus Commissioner General c/o SRC, Maison Collet, Victoria Respondent (rep by Mrs. Lansinglu Rongmei) Neutral Citation: Yangtze Construction Co Pty Limited v Commissioner General (SCA 24/23) Before: Summary: . Heard: Delivered: [2024] (Arising in CC 07/2019) Tibatemwa-Ekirikubinza; Gunesh Balaghee, De Silva, JJA. Appeal against a decision of the Revenue Commissioner – Recovery jurisdiction of the Supreme Court – Procedure for appealing against decision of Revenue Commissioner. 16 April 2024 3 May 2024. ORDER The appeal is dismissed with costs. The Order of the Supreme Court that the Appellant pays SR 23,724,472.74 to the Respondent is upheld. JUDGMENT GUNESH-BALAGEE JA (De Silva JA, concurring) 1. This is an appeal against a judgment of the Supreme Court ordering the appellant to pay the sum SR 23,724,472.74 to the respondent. 2. The respondent (then plaintiff hereinafter referred to as the CG)) lodged a plaint before the Supreme Court against the appellant company (then defendant) which is a registered construction company as from June 1997 and having its principal place of business at Providence. It is common ground that Zihai Yang is the managing director of the company. 3. In the plaint, the CG averred, in a gist, that (a) the appellant company owed the sum of SR 23,724,472.74 to the CG as outstanding tax ; (b) Mr Zihai was appointed the public officer under subsection 38(1)(b) and (2) of the Revenue Administration Act (“the RAA”) as per the last communication with the appellant company; (c) he raised a default assessment for the years 2013 and 2014 on the appellant company due to its failure to furnish a return under the law; (d) he informed the appellant company of his decision through a Default Assessment Notification issued on 22 June 2015 as required by section 9(2) of the RAA; (e) Notices were posted to mail box 847 as per instructions given by the appellant and they did not return; (f) in March 2015, an audit was carried out regarding non-payment of income tax for resident and non-resident employees; (g) the appellant company was again informed of the decision through a notice entitled “Conclusion of Audit” issued on 15 June 2015 which was posted to mail box 847; (h) the notice did not return unserved; (i) value added tax (“VAT”) default assessments were issued to the appellant company (which is registered for VAT and which failed to file VAT returns as per section 33 of the VAT Act) for the period 2014 to 2016; (j) the said assessments were posted to the appellant company’s principal place of business in Providence; (k) the notices did not return unserved; (l) the appellant company’s turnover was more than one million rupees and it was liable to Corporate Social Responsibility Tax (“CSRT”); (m) he issued CSRT Default Assessments to the defendant for the period 2013 and 2014 on 15 June 2015; (n) the Notices were posted to mail box 847 as per instruction from the appellant company and did not return unserved; (o) no objection was ever received in relation to the default assessments raised; (p) reminders were issued to the appellant company as follows: (i) (ii) statement of unpaid revenue dated 21 March 2016; final Notice dated 28 April 2016; (iii) Notice to attend and give evidence dated 17 May 2016 and 7 June 2016 (which were also sent by email to the appellant company); (iv) notice of intention to prosecute dated 1 July 2016 and 23 August 2018 (which were also sent by email to the appellant company); (q) the notices did not return to the CG as unserved; (r) the appellant company and the CG met on numerous occasions in meetings for settlement of the appellant company’s revenue liability; (s) the appellant company through Mr Zihai made payment proposal plans which it forwarded to the CG but only paid part of the sum as per the proposal plans, i.e., SR 2,5550,000 as at 31 July 2014. 4. The appellant company’s defence consisted in essence of a general denial of the averments in the plaint and it averred that it had no knowledge of the assessments raised. Further, the appellant company raised two pleas in limine litis against the plaint: the first one being that the claim was res judicata and the second one that parts of the claim was prescribed by law. It also sought that the claim be dismissed. 5. After considering the evidence on record, the Court dismissed both pleas in limine: it concluded that the appellant company had failed to establish that the claim before it was res judicata as there was no overlapping between the said claim and the claim in respect of case CS 70/2015 between the same parties where the court had given judgment concerning other tax claims. The Court also found that the issue of prescription was of no avail to the appellant company as the prescription period had been interrupted by the appellant company given that it had sought an extension time to pay the sum owed. 6. As regards the merits of the case, the Court noted that Mr Zihai’s main line of defence was that there was no proof of service of the documents on him and that he had no knowledge of the documents sent to him by the CG. After finding that that his evidence was very vague, his replies full of uncertainties and that his replies “unsure in nature”, the Court did not accept his evidence and concluded that the relevant notices had been properly served on the appellant company and that it was well aware of the claim made by the CG but failed to object at the relevant time. 7. The Court, in addition, found that on the evidence adduced before it, it could not conclude that the CG had not followed the law or acted on wrong principles or in breach of the rules of natural justice. It therefore determined that, in the absence of a proper defence from the appellant company, judgment should be entered in favour of the respondent. 8. The appellant company is appealing against the judgement on on the following grounds: “1. That the sums claimed amounting to 23,724,472.74SR are exaggerated, exorbitant and does not reflect the Income and Revenues of the Appellant’s business. The sums are based on presumption and estimation and are rebuttable by evidence. 2. The sum of 2,550,000 which the Respondent used to offset the alleged social security arrears is an abuse of the appellants’ human rights by the respondent. 3. The Appellant’s Company was not trading during the period 2015 to 2017 and the social security payment to Pension Fund was for administrative staff and not evidence of trade patterns. 4. The Respondent failed to apply the proper communication procedure to reach the Appellant as their Registry Department could have communicated by telephone.” 9. Grounds 1 to 3 are in fact challenging the assessment raised by the respondent while ground 4, which is also concerned with the assessment, seeks to impugn the procedure followed when raising the assessment. 10. Before proceeding further, it is appropriate to reproduce the relevant provisions of the RAA. They are as follows - “PART IV - OBJECTIONS AND APPEALS 15.(1) Subject to subsection (2), a taxpayer dissatisfied with a revenue decision may, within sixty days after service of the notice of the decision, serve on the Revenue Commissioner an objection in writing against the decision stating fully and in detail the grounds for the objection. (2) If the Revenue Commissioner has amended an assessment under section 11, the taxpayer has no further right of objection than the taxpayer would have had if the amendment had not been made, except to the extent that by reason of the amendment a fresh liability is imposed on the taxpayer or an existing liability is increased. (3)A taxpayer may apply, in writing, to the Revenue Commissioner for an extension of time to serve notice of an objection and the Revenue Commissioner may, if satisfied there is reasonable cause, grant an application under this subsection and shall serve notice of the decision on the taxpayer as soon as is practicable after the making of the decision. (4)The Revenue Commissioner shall consider the objection and either allow the objection in whole or part, or disallow it, and the Revenue Commissioner's decision is referred to as an "objection decision". (5)The Revenue Commissioner shall serve notice of the objection decision on the taxpayer as soon as is practicable after making the decision. 16.(1) A taxpayer dissatisfied with an objection decision may make an application to the Revenue Tribunal in accordance with section 72 for review of the decision. (2) The Revenue Tribunal may, in reviewing an objection decision, exercise all the powers and discretions of the Revenue Commissioner under the Revenue law under which the assessment to which the objection decision relates was made. (3) If an application for review relates to an assessment, the Revenue Tribunal may make an order to – (a) affirm, or reduce, increase, or otherwise vary the assessment to which the objection decision relates; or (b) remit the assessment to the Revenue Commissioner for reconsideration in accordance with the directions of the Tribunal. (4) If an application for review relates to any other revenue decision, the Revenue Tribunal may make an order to affirm, vary, or set aside the decision. 17.( l) A party to a proceeding before the Revenue Tribunal dissatisfied with the Tribunal's decision on an objection decision may lodge a notice of appeal against the decision to the Supreme Court in accordance with section 78. (2) The Supreme Court shall hear and determine the appeal and may make such order as it thinks appropriate by reason of its decision, including an order affirming or setting aside the decision of the Revenue Tribunal or an order referring the case to the Tribunal or Revenue Commissioner for reconsideration in accordance with the directions of the Court. 18.(1) A party to a proceeding before the Supreme Court dissatisfied with the Court's decision may, with leave of the Court of Appeal, lodge a notice of appeal against the decision to the Court of Appeal. (2) If the Court of Appeal grants leave to hear an appeal under subsection (1), the Court of Appeal may make such order as it thinks appropriate, including an order affirming or setting aside the decision of the Supreme Court or an order referring the case to the Tribunal or Revenue Commissioner for reconsideration in accordance with the directions of the Court of Appeal. 19.(1) In a proceeding under this Part - (a) in the case of an assessment, the burden is on the taxpayer to prove that the assessment is excessive; or (b) in the case of a revenue decision (other than an assessment), the burden is on the person objecting to the decision to prove that the decision should not have been made or should have been made differently. (2) ... (3) The fact that an objection under section 15, review under section 16, or appeal under section 17 or 18 is pending does not interfere with, or affect the assessment that is the subject of the objection, review, or appeal and revenue may be recovered on the assessment as if no objection or appeal were pending. PART V - COLLECTION AND RECOVERY OF REVENUE Division I -General Provisions for Collection and Recovery of Revenue 20. (1) Revenue, when it becomes payable, is a debt due to the Government and shall be paid to the Revenue Commissioner in the manner and at the place prescribed. (2) … (3) …” 21(1) Any unpaid revenue may be sued for and recovered in any court of competent jurisdiction by the Revenue Commissioner or by the Attorney General suing on behalf of the Government. (2) In an action for recovery of revenue, a copy of the notice of assessment shall be received by the court as evidence that the revenue is due and payable, and the court shall not entertain any plea that the revenue assessed is not recoverable because it has not been properly assessed or that the assessment under which the revenue is payable is the subject of objection and appeal.” 11. The claim for unpaid tax was brought before the supreme Court under section 21(1) of the RAA which is found under Part V which concerns the collection and recovery of revenue. However, the appellant is under the grounds of appeal in fact challenging the assessment. 12. It is clear from a reading of the above sections that the procedure for challenging an assessment is as follows. Pursuant to section 15, the taxpayer has first to make an objection to the Revenue Commissioner who must take an objection decision wherein he can either allow the objection in whole, or in part, or disallow it. The taxpayer who is aggrieved by the objection decision has a right to seek a review of the objection decision before the Revenue Tribunal which can affirm, reduce, increase, or otherwise vary the assessment to which the objection decision relates, or remit the assessment to the Revenue Commissioner for reconsideration in accordance with the directions of the Tribunal (section 16). 13. Where the taxpayer is dissatisfied with the decision of the Revenue Tribunal, he may appeal to the Supreme Court against that decision (section 17). Where the taxpayer is dissatisfied with the decision of the Supreme Court, he may, with leave of the Court of Appeal, lodge a notice of appeal against the decision to the Court of Appeal (section 18). 14. However, even where a party has availed himself of the avenue provided for challenging the assessment, section 19(3) provides that notwithstanding that an objection under section 15, review under section 16, or appeal under section 17 or 18 is pending, this does not interfere with, or affect the assessment, subject matter of the objection, review, or appeal and the revenue may be recovered on the assessment as if no objection or appeal were pending. 15. To give effect to the provision allowing for recovery of revenue despite that an objection, a review or an appeal may be pending, the CG is given the power to sue for same. It is pursuant to this section that the present case originated in the Supreme Court. 16. However, it is apparent from the record that the whole case of the appellant company was unfortunately directed towards challenging the assessments raised and the procedure adopted in raising them. This, notwithstanding the fact that the appellant company should first have made an objection to the assessment to the Revenue Commissioner which it clearly never did. It is only after the CG had taken an objection decision with which the appellant were aggrieved that it could have sought a review of that decision before the Review Tribunal and then appealed to the Supreme Court against the decision of the Review Tribunal. Further an appeal to the Court of appeal would only be open to the appellant company with leave of the Court of Appeal. 17. The grounds of appeal show that the appellant is still labouring under the misapprehension that his case is one whereby he is appealing against the assessments raised. We are clearly not sitting on appeal against the decision of the Supreme Court following a review of an objection to an assessment by the Review Tribunal. The Supreme Court was not seized with an appeal against the decision of the Review Tribunal which is the only avenue through which it could have considered the merits of an assessment to tax and relied on the grounds which were raised by the appellant company during the hearing of the case. 18. As stated above, it is amply clear from the plaint that the Supreme Court was not seized with an action whereby the appellant company was challenging the decision of the Revenue Tribunal concerning the assessments raised against the appellant company but that it was DE SILVA JA 23. I have had the benefit of reading in draft the judgments proposed to be delivered by my sisters Justices Tibatemwa and Gunesh-Balaghee. Both are of the view that the appeal must be dismissed. I concur with this conclusion. However, they do so for different reasons. 24. The general principle is that a tax recovery Court cannot re-open the merits of the assessment of the tax. Section 21(2) of the Revenue Administration Act reflects this principle. Hence, the Supreme Court could not have inquired into whether the Appellant had due notice of the assessment. Accordingly, I agree that the appeal should be dismissed for the reasons more fully set out in the judgment of my sister Justice Gunesh-Balaghee. ___________________________ J. De Silva JA Signed, dated and delivered at Ile du Port on 3 May 2024. DR. LILLIAN TIBATEMWA-EKIRIKUBINZA, JA. Introduction 1. This is an appeal from the decision and orders of the Supreme Court (Burhan, J) in which he entered judgment in favour of the Respondent, awarding them a sum of SR 23,724,472.74. This amount represented various taxes and assessments that were outstanding and owed by the Appellant company. Facts 2. The background facts as accepted by the lower court are that the Commissioner General (Respondent) sought to recover unpaid revenue from the Appellant company (Yangtze Construction Company Pty Limited) under Section 21(1) of the Revenue Administration Act 2009. 3. It was averred in the Respondent’s plaint that the said sum arose out of the Appellant company’s failure to settle its tax arrears. Consequently, an action was instituted against the Appellant to recover the outstanding sum as well as costs of the suit. The outstanding taxes were as follows: 2013 Default Business Tax Assessment --- SR 13,727,503.63 2014 Default Business Tax Assessment --- SR 1,625,225.78 2013 Income Tax assessment --- SR 1,445,597.93 2014 Income Tax Assessment --- SR 831,530.97 2013 Corporate Social Responsibility --- SR 698,119.28 2014 Corporate Social Responsibility --- SR 99,566.54 2014 VAT Default Assessments --- SR 3,662,925.94 2015 VAT Default Assessments --- SR 702,974.32 2016 VAT Default Assessments --- SR 931,028.35 Total ------ SR 23,724,472.74 4. The Trial Judge found that Mr. Zihai Yang – the director and owner of the Appellant company - advanced his case by strongly relying on the absence of proof of service of the tax assessment documents. However, the Judge held that it was evident from the proceedings that the Respondent had been sending letters and notices to P. O Box 847 and 1280 provided by the Appellant in their self-assessment as well as during the initial registration of the company. Therefore, the Appellant’s director could not turn around to claim that that he was not cognizant of the Respondent's claim because the tax assessment documents were sent to the wrong address. 5. In conclusion, the Trial Judge held that the pertinent notice was correctly served on the Appellant company, but it neglected to raise any objections within the legally specified timeframe. Judgment was therefore entered in favour of the Respondent. 6. Dissatisfied with the Trial Judge’s decision, the Appellant appealed to this Court on the following grounds: 1. That the sums claimed amounting to 23,724,472.74SR are exaggerated, exorbitant and does not reflect the Income and Revenues of the Appellant’s business. The sums are based on presumption and estimation and are rebuttable by evidence. 2. The sum of 2,550,000 which the Respondent used to offset the alleged social security arrears is an abuse of the appellants’ human rights by the respondent. 3. The Appellant’s Company was not trading during the period 2015 to 2017 and the social security payment to Pension Fund was for administrative staff and not evidence of trade patterns. 4. The Respondent failed to apply the proper communication procedure to reach the Appellant as their Registry Department could have communicated by telephone. Relief Sought: 7. That the judgment of the Supreme Court be reversed and that the sum be reduced to the actual amount based on evidence. Parties’ submissions 8. The parties’ submissions will be reproduced at the time of the Court’s consideration of the grounds of appeal. Grounds 1 and 3 Grounds 1 and 3 will be resolved together because they all relate to the allegation of wrong assessment of tax arrived at by the Respondent. Ground 1 Appellant’s Submissions. 9. As far as I can meaningfully isolate arguments in support of ground 1, from what was filed as written submissions by Counsel for the Appellant, the essence of ground 1 is that the sum of SR 23,724,472.74 claimed by the Respondent was inflated, excessive and does not accurately reflect the tax assessment made of the Appellant’s business. The Appellant argued that the Learned Judge solely relied on the certificate of assessment produced by the Respondent and erroneously awarded the claim averred in the plaint. That the Learned Judge ought to have recalculated the claim based on the evidence adduced. Respondent’s Reply 10. The Respondent submitted that the assessment was based on the PAYG payee statement dated 15th June 2015 which was provided by Ms. Theresine - the Auditor of the Seychelles Revenue Commission. 11. Counsel referred to Section 9 of the Revenue Administrative Act1 which provides that if a revenue liability is required to be assessed and a tax payer fails to furnish a return as required by the law, the Revenue Commissioner may make an assessment of the revenue payable. 12. The Respondent explained that PAYG is a 5 percent tax payable by the taxpayer to the Seychelles Revenue Commission (SRC) as per Schedule 4 of the Business Tax Act 2009. Section 64 (1) & (2) of Business Tax Act, 2009 also provides that a person making payment to a specified business shall withhold tax from gross payment at the rate specified in the First Schedule and specified business listed in the 4th Schedule of the aforementioned Act. The Respondent argued that in line with the 4th Schedule, since the Appellant carries on business as a building contractor, it is subject to a 5 % withholding tax payment rate. 13. Arising from the above provisions of law, the Respondent argued that the Appellant's income, as indicated in the statement, was not exaggerated nor exorbitant. It represented the actual earnings and the 5% withholding tax. That in any event, the burden was on the tax payer to prove that the assessment was excessive in accordance with Section 19 (1) (a) of the Revenue Administration Act. 14. However, the Appellant failed to raise any objection to the correctness of the assessment within the prescribed 60 days’ period as stipulated in Section 15 of the Revenue Administration Act. The Respondent further submitted that although the law provides for redress up to the Court of Appeal in a revenue matter, the Appellant did not make use of the said avenues. That having failed to do so, the production and service of the notice of assessment was conclusive evidence that the amount and all particulars of the assessment were correct. In support of this submission, the Respondent relied on Section 21 (2) of the Revenue Administration Act which provides that: In an action for recovery of revenue, a copy of the notice of assessment shall be received by the court as evidence that the revenue is due and 12009. payable, and the court shall not entertain any plea that the revenue assessed is not recoverable because it has not been properly assessed or that the assessment under which the revenue is payable is the subject or objection and appeal. 15. The Respondent also relied on the authorities of Controller of Taxes vs. Ho-Sap2 and Yve Bossy vs. the Republic3 wherein the courts held to the effect that: a notice of assessment is considered conclusive proof of the correctness of the assessment as well as the amount and incase of any objections, it is the responsibility of the taxpayer to challenge the assessment. Failure to do so, the courts have no choice but to hold the tax payer liable for the assessed amount. Ground 3 Appellant’s Submissions. Counsel for the Appellant submitted that the company was not trading during the period 2015 to 2017. Appellant faulted the Respondent for making a tax assessment for that period. That the Social Security payment to pension fund was for administrative staff only and not evidence of trade patterns during the said period. Counsel argued further that the Appellant had placed advertisements in newspapers during that time because it was bidding for government contracts which it did not get. That the Respondent failed to prove that the Respondent was trading. That all this was clearly revealed in the Appellant’s evidence before the Trail court who however completely disregarded the evidence for no obvious justification. Respondent’s Submissions 2 (1983) SLR 148. 3 (1980) SLR 40. 16. For ground 3, the Respondent submitted that during a meeting held on 23rd March 2016, between the Respondent’s representative and the Appellant, as documented in Exhibit P/21 at page 268, the Appellant’s director mentioned that the company was not trading in 2015 but was involved in maintenance work at Seychelles Tourism Academy (STA). The Appellant was advised by the Respondent to take necessary steps regarding its alleged non- trading status but it did not comply. Subsequently, in an email exchange between Mrs. Alcindor and Ms. Moustache as appears in Exhibit P.19 at page 265 of the Record, the Appellant explained that the STA project was a two phase project valued between SR.15 to 17 million. The Appellant also mentioned of an investment in a new three-story commercial building project that was approved and a loan was being negotiated. 17. The Respondent argued that the above evidence indicated that the Appellant was engaged in profitable trade. Consideration by the Court. 18. It is imperative to note, as rightly observed by the Trial Judge at page 14, paragraph 40 of the decision that, it is settled law that in cases of this nature, it is not for court to once again proceed to calculate the sum claimed in the plaint. This conclusion is premised on the provisions of Section 21(2) of the Revenue Administration Act (herein after referred to as the Revenue Act) which provides that: In an action for recovery of revenue, a copy of the notice of assessment shall be received by the court as evidence that the revenue is due and payable, and the court shall not entertain any plea that the revenue assessed is not recoverable because it has not been properly assessed or that the assessment under which the revenue is payable is the subject of objection and appeal. (My emphasis) 19. Furthermore, Section 13(1) of the Revenue Administration Act provides that: The production of a notice of assessment, or a document under the hand of the Revenue Commissioner purporting to be a copy of a notice of assessment, is conclusive evidence of the due making of the assessment and (except in proceedings under Part IV) that the amount and all particulars of the assessment are correct. 20. On the premise of the above provisions of law, this Court is precluded from calculating the tax that ought to be paid by a tax payer. 21. The Revenue Act provides for a streamlined procedure through which a tax payer can challenge a tax assessment. Section 15 (1) of the said Act provides that: … a taxpayer dissatisfied with a revenue decision may, within sixty days after service of the notice the decision, serve on the Revenue Commissioner an objection in writing against the decision stating fully and in detail the grounds for the objection. 22. If the tax payer is dissatisfied with objection decision, Section 16 (1) of the Revenue Administration Act provides that an application to the Revenue Tribunal in accordance with Section 72 can be lodged for review of objection decision. 23. Where the taxpayer is still dissatisfied with the Tribunal’s decision, they can lodge an appeal to the Supreme Court and thereafter the Court of Appeal. (See: Section 17(1) of the Revenue Administration Act). 24. Therefore, the Appellant’s submission regarding the tax assessment being excessive, is a matter which should have been raised before the proper fora discussed above. Since the Appellant did not object to the tax assessment through the proper procedure detailed above, he cannot at this stage of the appeal ask this Court to carry out a re-assessment of the amount of tax. 25. Thus, grounds 1 and 3 fail. Ground 2 26. Regarding ground 2 the Appellant did not expand or elucidate in which way the use of 2,550,000 SR to set off social security arrears was an abuse of the Appellant’s human rights by the Respondent and I will say no more about. 27. But in reply to the Appellant, the Respondent submitted that, the Social Security Fund is provided for under the Social Security Act, 1987 and is a tax deducted from employees' salaries to be remitted by the employer to the fund. That it is an obligation on the part of the employer and therefore, the argument that the Respondent violated the Appellant’s human rights by assessing the said tax is misplaced. That on the contrary, it would be the Appellant violating its employees’ rights by failing to remit money into the Social Security Fund. Consideration by the Court 28. Indeed, as argued by the Respondent, it is the obligation of an employer to remit contributions to the fund every month for the eventual benefit employees. I am I am simply baffled at what the essence of this ground is and I will say no more about it. Ground 2 is dismissed. Ground 4 Appellant’s submissions 29. Under this ground, the Appellant submitted that throughout its evidence in the court below, it pleaded and testified through its director – Mr. Zihai Yang - that it was not properly served with the default assessment notifications. As indicated in the Respondent’s pleadings, the notifications were sent to the wrong address namely P. O. Box 847. 30. That Mrs. Fabiola Alcindor the director of enforcement of the Respondent in her own evidence at page 7 of the proceedings of 20th July 2020 stated that the registered address of the Appellant (as reflected in its constitution documents) was P. O Box 1280 - and 1137. 31. The Appellant argued that pursuant to Section 100 of the Companies Ordinance4, service of any document on a company is effective only if it is served at its registered office. The Appellant therefore submitted that the Respondent did not show that it served the notices in compliance with the said provision. Therefore, the default assessment notifications are deemed unserved on the Appellant and this failure is a breach of natural justice rules and must not be condoned. In support of this submission, the Appellant relied on the case of Sunway Group Limited vs. Commissioner General of Seychelles Revenue Commission5. 32. The essence of the Appellant’s submissions is that, the wrong assessment of the tax owed was as a result of miscommunication or lack of clarity in the communication process by the Respondent. Furthermore, that the Respondent did not serve the default assessments at the correct Appellant’s address which amounted to non-service. Respondent’s reply 33. In reply, the Respondent submitted that, a default assessment notification cannot be sent by telephone. The Respondent also denied the allegation that the notifications were sent to a wrong address. That it was clear in the evidence adduced (Exhibit P1 at pages 44 and 168) that while in the Business Registration Form filed on 02/06/1997, the Postal business address given by the Appellant was Nos:137 and 1280, subsequently in the Business Tax Return filed by the Appellant on 30th October 2012, the address for service of notice was given as P. O. Box 847, Victoria, Mahe. Therefore, the latter Box number 847 was the current address of service provided by the Appellant. The Respondent therefore argued that the Appellant cannot claim that it was not served properly or that the mode of communication was wanting. 34. Furthermore, the Respondent referred to the minutes of the meeting held on 18th and 23rd March 2016 which appear on the Record at page 266 and marked Exhibit P21 and page 4 1972. 5 MC 53/2019. 268 respectively wherein the Appellant’s director personally met the Respondent’s officials and requested for extension of time to pay the outstanding debts. That in the said meetings, the Appellant acknowledged receiving notice of the assessments otherwise one would wonder why the Appellant was requesting for an extension to effect payment. 35. In conclusion, the Respondent prayed that this Court dismisses the appeal with costs and upholds the judgment of the Trial Judge. Consideration 36. In resolving this ground, I will re-evaluate the evidence on record regarding the interactions between the parties. 37. At the hearing, the Respondent led evidence through 2 witnesses. The first witness was Fabiola Alcindor, the Director for Enforcement at the Seychelles Revenue Commission (SRC). Her evidence was that the Appellant - Yangtze Construction Company (Pty) Ltd - was registered in 1997 with the SRC and the name of the owner of the business was Zihai Yang. The tax payer ID issued to the company was 1-6046-25. The registered address given by owner was Anise Aux Pins and P. O Box numbers 137 and 1280. The tax agent in charge of the company’s tax obligations at that time was a Ms. Erica Laporte. 38. Fabiola Alcindor produced a letter dated 29th August 2018, written by Mr. Zihai Yang and marked P2. In the said document, Mr. Yang informed the Respondent that he disagreed with the assessments. He also requested for a meeting with the Commissioner and explained that he was working with his tax agent to re-lodge the returns for the years 2013 to 2017. He also pointed out that he was not trading in the period 2015 to 2017. This witness stated that after receipt of Mr. Yang’s communication, he was informed by the Respondent that he was out of time to resubmit any documents as he had failed to do so on the given dates and was consequently issued with a default assessment notification as far back as 2015. The witness explained that a default assessment is done by the audit Section of the Respondent authority when the company fails to lodge the returns themselves. The default tax assessment notices were admitted on the court record and marked P3 and P4. The assessments were for Business Tax returns for the years 2013 and 2014 in the sum of SR 13,744,442.80 and SR 1,625,225.78 respectively. 39. Furthermore, Fabiola Alcindor testified that the two notifications were issued to Yangtze Construction at its registered postal address of P. O. Box 847. After she issued the said notifications, she did not receive any communication from Yangtze Construction in respect of the said assessments. 40. Another document presented by Fabiola was an audit letter dated 15th June 2015 which appears on the record as P6. The document was sent to inform the tax payer of the result of the audit for the period of January 2013 until December 2014. The witness testified that the Appellant company had 60 days upon receipt to submit any objection to the said assessment. The said document (P6) was also sent to the Appellant’s registered postal address. However neither, Yangtze Construction or Zihai Yang responded to the said letter. 41. The witness also produced document marked P7 which indicated the outstanding VAT from Yangtze Construction for the period 2014 June to 2017 August. She stated that Yangtze Construction was informed of this outstanding liability in respect of VAT but failed to pay same. The witness testified that as per document P7, the total amount of VAT that was outstanding from Yangtze Construction including interest and penalties, for the years 2014 and 2015 was SR 3,662,925.94 and SR 702,974.32 respectively and for the year 2016 it was 931,028.35. The total revenue due was SR 23,724,472.74. 42. For Corporate Responsibility Tax for the year 2013 and 2014, Fabiola explained that since the Appellant’s business turn-over was over one million rupees, it had to pay Corporate Responsibility Tax. That the notice of assessment for the year 2013 for this tax was issued on the 15th of June 2015 to P. O. Box 847. She stated that the Corporate Responsibility Tax for the 2013 was SR 698,119.27 and for the year 2014, it was SR 99,566.54. The witness stated that Yangtze Construction has never made any payment towards this assessment. That the total of unpaid revenue was SR 33,490,659.17 and included all the unpaid taxes as set out in the document PI0 as at March 2016. Witness testified that a letter was issued on the 21st March 2016 and the defendant was asked to pay by the 05th of April 2016 and it was also stated that if he had difficulty in paying, he should come forward and make certain arrangements with the Respondent. The witness testified that the Appellant did not make payment by 5th April 2016 nor did Mr. Yang come forward to meet the concerned officers at the Respondent authority to discuss a way forward. 43. The witness testified that a final notice in respect of unpaid revenue was issued by the Respondent on 28th April 2016. Mr. Yang was informed that failure to make the payment within 7 days will result in legal action to recover the debt. Still, the Appellant did not contact the concerned officers nor were any objections raised. 44. Thereafter an enforcement officer Ms. Juliet Confiance sent Mr. Yang a notice to attend an interview at the SRC office in relation to his non-payment of his revenue liabilities dated 24th of May 2016 (PI2). An email was also sent P13 with attachments concerning same. Another notice to attend dated 7th June 2016 was also sent P14 together with an email dated 7thJune 20 16 (P15). The penalty for failure to respond to this notice to attend and give evidence is a fine of SR 50,0001. As a result of him failing to attend, a notice of intention to prosecute was issued to the defendant (P 16) dated 1stJuly 2016. It stated that the Appellant was given another 14 days to settle the debt before the SRC proceeds for prosecution. He was also invited to contact the office should he require any clarification or if he wanted to discuss the matter with the Assistant Commissioner. He was advised to book an appointment but the Appellant did not follow instructions. 45. Another document produced by Fabiola was PI7 which showed a breakdown of all the outstanding taxes of the tax payer as at 2nd August 2018. She also referred to the payments made by the Appellant amounting to SR 2,639,701.91. She stated that this amount was taken into consideration in their computation of the total amount outstanding. 46. After deduction of what the Appellant had so far paid, the Respondent issued another recovery notice and informed the Appellant that legal action will commence if no response was received by 7th September 2018. This time, the Appellant was invited to discuss the matter with the Commissioner General. Mr. Zihai Yang did not respond to this notice of intention to prosecute nor did he make arrangements to meet with the Commissioner General. The witness testified that after that, the Respondent proceeded to lodge the case in court but not for the full outstanding amount of 37,009,490.42. The Respondent received judgment in its favour but still the Appellant did not make any payment. 47. On 18th August 2015, the Respondent had a meeting with Mr. Yang in respect of dishonored cheques. Mr. Yang undertook to settle all outstanding taxes by November 2015. He requested the said date to be extended to 30th April 2016. Another meeting was held in which Mr. Yang’s lawyer negotiated for the Respondent to drop some penalties so that the Appellant could pay the entire outstanding amount. Mr. Yang had also not preferred an appeal to the Revenue Tribunal at this point. 48. Fabiola further produced a letter written by Yangtze Construction to the Revenue Commissioner in 2013 with reference to financial difficulties with a proposed payment plan. He still did not make any payments. The witness further produced document P26 dated 01 September 2014, authored by Mr. Yang in regards to the Instalment payment of tax. He communicated that he had paid SR 2,150,000.00 and could not pay any more money. 49. During cross-examination, Fabiola maintained that Mr. Yang was made aware of everything that was going on between his company and the Respondent. The witness confirmed that the amount brought to court was an estimate because the law allows them to do so in terms of an audit. The witness further testified that although Yangtze Construction claimed not to have received the tax assessment documents and intended debt recovery correspondences, all assessments were sent to the Appellant’s registered postal address. She further stated that all relevant assessments were shared during the physical meetings held with the Appellant. Regarding whether or not the company was operating in 2015 – 2017, Fabiola explained that they checked the Pension Fund system and found that the company had employees for this period of time and the company was paying to the Pension Fund. 50. The second witness who testified on behalf of the Respondent was Maria Theresine – an officer in the Legal department of the Seychelles Revenue Commission – who testified that she did an audit assessment in reference to the Appellant company. The witness produced a document admitted on the court record and marked P32 and explained that this was the notification given to the tax payer informing them that a default assessment had been made against the company. The bulk of her evidence gives a breakdown of how the outstanding tax sum was computed. 51. During cross-examination, Maria Theresine stated that the Postal address she sent the documents was the one given by the Appellant company during registration. She also denied the allegation that the penalties were exorbitant but were imposed according to the law. 52. On the other hand, the Appellant testified through its Managing Director - Zihai Yang – who denied the claim and stated that the payment has not been settled yet because he is planning to appeal. During cross-examination, Yang testified that he had asked his tax agent Ramani and Company to raise objections to the claimed amount but could not confirm if he had done so within the stipulated period of 60 days. Yang maintained that he was neither made aware of the tax default assessment nor did he received any notice from the Respondent. He further denied having received any minutes of meetings from the Respondent. Yang claimed that the postal address used by the Respondent was wrong. 53. The Trial Judge held that it was clear from the proceedings that the Respondent kept sending letters and notices to Postal addresses: 847 and 1280. The Judge found that although the Respondent claimed that these were wrong addresses, P. O. Box 847, was provided by the Appellant in their own self- assessment. Furthermore, that during the initial registration of the company, Postal Box numbers: 137 and 1280 were provided by the Appellant as the addresses where notices were to be sent. During examination in chief, the Appellant’s Managing Director – Yang – admitted that P. O. Box 1280 was his business address. That therefore, the Respondent could not turn around to say that the documents were sent to a wrong address. 54. The Trial Judge also found that although Mr. Yang’s evidence was vague and full of uncertainties, it was clear that he was aware of the arrears of taxes owed by his company. 55. The evidence which shows that the Appellant had notice of the tax obligations it had to settle can be summarized as follows: i. Debt Settlement Plan: The Appellant’s Managing Director – Yang Zihai - mentioned a plan to settle the outstanding amount by using funds received from a project at Hotel Tourism Academy to offset part of the debt. This indicates an intention to address the financial obligations through alternative means. 56. Furthermore, meetings involving Yang Zihai and officials from the Respondent as evidenced by Exhibits P20 and P21, shed light on the discussions surrounding Yangtze Construction's challenges in settling debts. These meetings documented Mr. Yang's proposals to address his debts, including acknowledging receipt of assessment notifications. The collaborative nature of these discussions, where Mr. Yang sought advice on debt resolution and committed to presenting a formal proposal, indicates a proactive approach towards resolving financial obligations. 57. Further still, Mr. Yang requested a meeting with the Commissioner to discuss the tax assessments and mentioned working with his tax agent to address the returns for specific years. This indicates an attempt at communication from the Appellant's side to resolve the tax issues. Emails were sent to the email address associated with Yangtze Construction, and physical letters were sent to the specified business addresses of the company, demonstrating the Respondent's efforts to communicate through multiple channels. 58. Despite the Appellant’s claim of not receiving documents, it is evident from the proceedings that the Respondent served notices and letters to the provided addresses. The Appellant's reliance on lack of proof of service does not negate the fact that several communication attempts were made by the Respondent. ii. Contradictory evidence: Although Mr. Yang displayed a contradictory stance during the proceedings, claiming to be unaware of many aspects about notices being sent to his business address by using uncertain language, it was evident from the lower court's observations that the Respondent’s evidence was more believable than that of the Appellant. It can therefore be concluded that Mr. Yang was indeed cognizant of the arrears of taxes owed by his Company. This awareness was substantiated by his interactions with officers of the Respondent regarding the outstanding debts, as appears on the Record through various exhibits. 59. Further still, the fact that there was a prior agreement to settle the debts using funds from other business ventures, leads to no other conclusion that the Appellant had outstanding tax debts. 60. I must emphasize that resolution of this ground largely calls for a finding of fact – was the Appellant made aware of its tax obligations? 1. It is a generally accepted principle that findings of fact are matters within the province of a trial court. An appellate court will very rarely interfere with the findings of fact made by a trial court. An appellate court only interferes if the findings are perverse, unreasonable or not supported by the evidence adduced before the trial court. 2. It is also a generally accepted principle in court hearings that the demeanour of a witness is of value in shedding light on the credibility of a witness. The opportunity to observe the demeanor of a witness while testifying is often exclusive to the trial court, the court where evidence and testimony are first introduced, received, and considered. 61. After analyzing the evidence adduced by the Respondent to prove that the Appellant was served with the relevant notices on the one hand, and the defence of the Appellant on the other hand, the trial court came to the finding that: … the evidence of the Appellant’s Managing Director, the sole witness who testified for the Appellant company was vague … he repeatedly stated he was unaware of many things and his replies in cross examination were full of uncertainities. … However, it is apparent … that he was aware of the arrears of taxes due … set out in the plaintiff’s numerous documents … he had even met and had discussions with the tax officers regarding the debts owed by him … this Court is satisfied that the relevant notice had been properly served on the defendant company. 62. I have re-evaluated the evidence on record and reproduced above. I have carefully studied the findings of the trial judge. I have come to the conclusion that there is no need to interfere with the findings of fact made by the trial court. I come to the conclusion as did the trial judge that that indeed, the Appellant was aware of its outstanding obligations and insisting on the lack of use of telephone communication is a flimsy excuse. The Appellant’s defence of not being aware of its tax obligations due to alleged service of the assessment notices at a purported wrong address cannot stand. 63. Ground 4 fails. Conclusion and Orders 64. Having found that all the grounds fail, this appeal is hereby dismissed with costs to the Respondent. Consequently, the judgment and orders of the Trial Judge are upheld. _______________________ Dr. Lillian Tibatemwa-Ekirikubinza, JA. Signed, dated and delivered at Ile du Port on 3 May 2024. 29