Tribunal: Customs overcharged business owner for vehicle
The Department of Customs was directed to repay a small-business owner thousands of dollars in duty tax after a tribunal ruled that she was charged more than double the amount necessary for a delivery vehicle.
The Tax Appeal Tribunal further directed the collector to instead pay for the legal costs of the appellant, Shi-Vaughn Lee, after a court case that lasted three years.
The tribunal outlined its decision in a ruling, dated September 30, on the matter of Dove & Butterfly Ltd v The Collector of Customs.
The case relates to a dispute with Customs, after Ms Lee imported a Mercedes Benz in 2022 to help her pick up supplies and deliver products for her business.
Customs released the car December 19 of that year and it was licensed as a light passenger vehicle on January 11 the following year.
Ms Lee said she was under the impression that she had until 30 days after the date of licensing to pay duty tax.
However, a letter from Customs told her on January 31 that outstanding duty and charges were to be paid by February 3 — and that all products for Dove & Butterfly would be held until it was done.
Furthermore, Customs told her to pay 75 per cent duty tax on the first $10,000 of the car’s value, plus 150 per cent on every dollar over the initial $10,000 — resulting in a $21,000 charge on an $18,000 car.
Ms Lee appealed this on February 19, 2023, through an internal appeals process.
She claimed that the second-hand vehicle of a particular vehicle-type, which had been approved by the Transport Control Department, should have had a duty tax of 35 per cent.
The tribunal, headed by Rod Attride-Stirling, noted that Ms Lee believed she was treated “improperly, unfairly and unlawfully” because other businesses importing similar vehicles paid 35 per cent duty.
Customs, represented by Eugene Johnston, did not put forward evidence against the 35 per cent duty tax — however, the letter sent to Ms Lee on January 31 said that the vehicle did not qualify for the 35 per cent rate because it was a light private vehicle.
The tribunal noted that this was the only basis given for the decision.
Mr Johnston further suggested that hundreds of light passenger vehicles similar to Ms Lee’s were unlawfully licensed by TCD.
However, the tribunal noted that there were several problems with this reasoning — namely, there had been no findings that TCD had acted unlawfully in this case and that the Collector never presented evidence for this.
Following this, the tribunal had to apply the belief of omnia praesumuntur legitime facta donec probetur in contrarium — “all thing are presumed to be legitimately done until the contrary is proven”.
The ruling further included an e-mail dated December 18, 2022, from Principle Customs Officer Melody Lightbourne, recognised that the lower duty rate could be paid if the vehicle was properly registered through TCD.
The tribunal wrote: “It is important to note here that Customs makes no mention of the problem being that the vehicle was to be owned by a business or a company.
“Nor does Customs say or even suggest that the customs department took the position that it would be unlawful for TCD to license the vehicle in the manner claimed for by the Appellant, such that she would never be entitled for the lower duty rate.
“Based on the evidence before the tribunal, it appears that these additional points were never raised by the Collector at the time of making her original decision.
“Instead, these novel points appear to be taken by her counsel, at the hearing of the Tax Appeal Tribunal 2½ years later.”
The tribunal ruled in favour of Ms Lee and her appeal was allowed. They ruled that the Collector of Customs should assess the tax based on the 35 per cent duty rate and repay any amount given in excess.
• To view the ruling in full, see Related Media
