Barbara Gayle, Staff Reporter
TWO companies which are owned by Opposition Leader Edward Seaga are challenging a Revenue Court ruling that one of the two companies is responsible to pay $30 million collected for General Consumption Tax (GCT).
The companies are Premium Investments Ltd. and Town and Country Resorts Ltd. The appeal against the Revenue Court ruling has been set for tomorrow in the Court of Appeal.
In 1999, Town and Country Resorts Ltd. was summoned to the Resident Magistrate's Court, Ocho Rios, for failure to pay GCT amounting to $30 million plus interest amounting to $20 million.
The company filed a summons in the Supreme Court contending that it was not liable to pay the tax. Justice Courtenay Orr (now deceased) heard the summons and ruled in February last year that Town and Country Resorts was the entity responsible to collect the tax chargeable in respect to the taxable activity of the resort known as The Enchanted Garden and was responsible to pay the tax to the Commissioner of the General Consumption Tax.
The companies have appealed the ruling and are asking the Court of Appeal to find that DHC Ocho Rios Hospitality Corporation was the entity responsible to collect tax chargeable in respect of the Enchanted Gardens Hotel.
Justice Henderson Downer, Justice Donald Bingham and Justice Algernon Smith (acting) will hear the appeal tomorrow.
In dismissing the summons the judge had granted Town and Country Resorts leave to appeal for an order that on a proper construction of section 23A of the General Consumption Tax Act and of the management agreement by and between Premium Investments Ltd. (formerly Consulting Services Ltd.) and DHC Ocho Rios Hospitality Corporation, the entity responsible to collect the tax chargeable in respect of the taxable activity of the resort was DHC Ocho Rios Hospitality Corpo-ration.
The companies are asking the court to find that in view of the definition of "operator" at section 2 of the GCT Act, the question of who is the operator of a hotel is a question of law and not of fact. The companies are asking the court to find that the judge erred as a matter of law in deciding that the representations made by Town and Country Resorts Ltd. that it was the operator of the resort were representations of fact when they were misrepresentations of law.
They are also contending that the judge seemed to hold in error that because Town and Country Resorts Ltd. was registered as the taxpayer under the GCT Act and because the company failed to inform the Commissioner that it no longer collected the tax, then Town and Country Resorts automatically became liable to collect the tax and pay it over to the Commissioner. "This reasoning is erroneous and does not accord with the provisions of the General Consumption Tax Act nor with the uncontroverted affidavit evidence before him," the companies contend.
Mr. Emile George, Q.C. is representing the companies. The Commissioner of GCT is being represented by the Director of State Proceedings.
