High court rules tax exemption to Chancellor, CJ unconstitutional

Nov 14, 2021 News

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– awards Justice William Ramlall $2.5M compensation
Kaieteur News – Six years after he filed a court action challenging the law granting tax exemptions to the Chancellor and Chief Justice, a decision that was handed down in the High Court found that, that law was discriminatory and unconstitutional.

Justice Fidela Corbin-Lincoln ruled on Friday that the State breached the now retired Puisne High Court Judge, William Ramlall’s fundamental right of equality of the law as guaranteed under Article 149D of the Constitution when he was made to pay judicial income tax from 2004 up until his retirement in 2014.
“It has not been established that the differential tax treatment has a legitimate aim…I find that Section 13 (a) [of the Income Tax Act] contravenes Article 149D of the Constitution in so far as it confers tax exemptions on the Chancellor and Chief Justice only and excludes other judges of the Supreme Court,” Justice Corbin-Lincoln said in her ruling,
Ramlall was appointed to that office in July 2000 and has since retired. His judicial income was taxable at the time of his appointment and remained taxable at the time of his retirement.
His case is that in 2003, the Judges of the Supreme Court engaged in a meeting with the then executive President of the Republic of Guyana regarding the provision of better terms and conditions of service for all Judges. A case was made out for the grant of an exemption from income tax on the earnings of all Judges.
The following year, the relevant portion of the Act was introduced by the Income Tax Amendment Act, Act No. 7 of 2004 which was passed by the National Assembly on the 29th March, 2004 and assented to by the President on the 24th May, 2004. The stated purpose of Act No.7 was to amend the Act and it only effected an amendment to Section 13 (a) of the Act.
The effect of the amendment by Act No. 7 is that Section 13(a) of the Act: “There shall be exempt from the tax- 2 Chapter 1:01 3 the official emoluments received by the President both when in and when absent from Guyana and the provisions of this paragraph shall apply to the emoluments of the Chancellor and Chief Justice.”
“By virtue of Section 2 of the Act, it was therefore explained to mean that all salaries, leave pay, sick bonus, stipend, or other payment of any kind for services, director’s fees, retiring allowances, and compensation were chargeable …with tax under the Act but the Chancellor and Chief Justice are exempt from tax.”
These tax exemptions were not extended to Justice Ramlall or other Judges of the Supreme Court. The income of all Judges of the Supreme Court, including the Chancellor and Chief Justice was subject to the same tax treatment.
As such, Justice Ramlall had sought a declaration that Section 13 (a) of the Act is unconstitutional and a declaration that the deduction of income tax from his judicial income is an unlawful alteration of the terms and conditions of the service as a Judge of the Supreme Court.
He had asked the High Court to declare that the State is not entitled to take or receive income tax derived from his emoluments, a declaration that upon retirement, he is entitled to a monthly pension and retirement benefits of not less than seven-eighths of his salary at the time of his retirement.
Justice Ramlall is also requesting that a declaration be made that he is entitled upon retirement to a monthly pension and retirement benefits of not less than seven-eighths of his salary at the time of his retirement.
The relief would also include an order for constitutional compensation, damages and refund of income tax together with interest, of at least $34M.
Justice Ramlall and his lawyers specifically looked at Articles 8, 65, 126, 142, 149, 149D, 153 and 197(10) of the Constitution for the case. Representing Justice Ramlall were a team of lawyers including Manoj Narayan, R. Satram, C.V. Satram, Ganesh Hira, and Mr. Ron Motilall.
In considering if Justice Ramlall’s fundamental right was breached, Justice Corbin-Lincoln examined the provisions of Article 149D and whether the roles of the Chancellor and Chief Justice are similarly situated/circumstanced, comparable, analogous, or broadly similar to that of the retired Judge and other Judges of the Supreme Court.
Justice Corbin noted that the Supreme Court was established by Article 123 (1) of the Constitution and consists of the Court of Appeal and the High Court, both of which have been designated as superior courts of record.
Article 126 of the Constitution states that: a Judge includes the Chancellor, the Chief Justice, a Justice of Appeal, a Puisne Judge, and a part-time Judge. However in finding the law discriminatory, Justice Corbin-Lincoln noted that in other Caricom countries all judges are treated equally in relation to taxes, drawing examples from Trinidad and Tobago and the Eastern Caribbean where all judges, not only the Chancellor and Chief Justice, are exempted from taxes.
“There is no subset of judges that enjoys the exemption and others excluded,” she said even as she pointed out that in Jamaica, all judges are subject to taxes.
Since the remuneration of the Chancellor and Chief Justice already takes into account their hierarchy and additional administrative responsibilities, the Judge said the Attorney General failed to establish that the differential tax treatment has a legitimate aim.
She described the Act as having a “discriminatory effect” and therefore declared that Section 13 (a) of the Act insofar as amended by Act No 7 is unconstitutional, void, and of no effect. In the circumstances, the Judge ordered the State to pay Justice Ramlall $2,500,000 as compensation.

 

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