Objections and Appeals

27.A12. Sales tax, being a self-assessed tax, does not normally call for the issue of an assessment. However, where a taxpayer is dissatisfied with the amount or value of sale value upon which he is required to pay tax, the Commissioner will issue an assessment enabling the taxpayer to exercise his rights of objection and to refer the Commissioner's decision on objection, if unfavourable, to a Board of Review. Objection may be taken within forty-two days of the first day on which a taxpayer is required to

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pay sales tax. This period differs from the time allowed for lodgment of objections against income tax, estate duty and gift duty assessments. The Committee has recommended in Chapter 22 that the time for lodgment for objections and appeals under all relevant enactments be made uniform.

27.A13. One ground of objection is that the goods have no sale value under the Act: it may be argued, for example, that goods are not ‘goods’ as defined in the Act. However, objection cannot be taken on the ground that the goods should be exempt or taxed at a lower rate because they come within a description of an item in one of the schedules of the Sales Tax (Exemptions and Classifications) Act.

27.A14. Where reference to a Board of Review involves a question of law, the Commissioner or the taxpayer may request the Board to refer the matter to the High Court for its opinion. Either party may appeal against the Board's decision if a question of law is involved.

27.A15. The Acts do not make an assessment conclusive evidence of liability. Therefore, instead of following the appeal procedures, a taxpayer may refuse to pay the tax and raise the point of his objection before a Court when he is sued by the Commissioner for recovery of the tax. This is what a taxpayer must do if he wishes to contest a ruling by the Commissioner bearing on the classification of goods: for example, where the Commissioner denies a taxpayer's claim that the goods are exempt from tax or that they should be taxed at a lower rate of sales tax.

27.A16. It was suggested in several submissions that taxpayers should be given the right of objection and reference to a Board of Review against decisions of the Commissioner concerning the classification of goods. There are practical difficulties, however, in extending the right of reference in such cases.

27.A17. A large staff of taxation officers is employed in classifying goods. The procedure then followed is that, if there has been no previous ruling, a ruling in writing is given to the taxpayer by a Deputy Commissioner. If the taxpayer is dissatisfied with that ruling, the Deputy Commissioner in turn will refer the matter to the Commissioner who will review the Deputy Commissioner's decision and give a final ruling. By this time all the taxpayer's submissions will have received thorough consideration. Apart from this the Commissioner reviews all cases where competitive anomalies are involved. Each Deputy Commissioner is required to submit such cases to him as they arise.

27.A18. Many thousands of rulings are given to taxpayers each year. Only a relatively small number are referred to the Commissioner, who is accepted by most taxpayers as the final arbiter. Occasionally, however, official rulings are disputed before a Court when action has been taken to recover the tax.

27.A19. Because sales tax affects day-to-day transactions, rulings as to the classification of goods must be given expeditiously. If rulings were subject to review by a Board of Review there would inevitably be delays and uncertainty. The failure of a commodity tax law to provide for an administrative review of the classifications of goods by an independent tribunal is not unusual: the same is true, for example, of customs and excise classifications. While it might be fairer if these decisions were referred to a Board of Review, substantial practical difficulties would be involved.