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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Gilligan v. Criminal Assets Bureau [1997] IEHC 38; [1997] 1 IR 526 (26th February, 1997) URL: http://www.bailii.org/ie/cases/IEHC/1997/38.html Cite as: [1997] IEHC 38, [1997] 1 IR 526 |
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1. On
the 28th November, 1996 the Plaintiff applied to the High Court by way of
Notice of Motion seeking an interlocutory injunction restraining the Defendants
from advertising for sale or taking any steps to dispose of the property of the
Plaintiff seized by the Second named Defendant and his servants or agents on
the 20th November, 1996 at Mucklon, Enfield, County Kildare and secondly,
directing the Third named Defendant to return the plant property to the said
premises and to make good any damage caused by them.
2. At
that hearing, Mr. Justice Geoghegan refused this application and reserved the
costs.
From
this Order the Plaintiff appealed to the Supreme Court who, having considered
the case, sent it back to the High Court for the purpose of trying certain
issues. These issues are:-
4. The
issues that I am required to try are limited issues. Having read the
affidavits that have been filed in this case, it is clear that significant
consequences may flow from my determination of these issues. It is no part of
my function to consider any such consequences and I confine my judgment
entirely to the issues before me which are matters of law arising out of a
consideration of the income tax code.
6. I
now set out in summary form the principle submissions made on behalf of the
parties on this issue.
7. On
behalf of the Plaintiff it was submitted that Sections 194 and 195 of the
Income Tax Act, 1967 create circumstances in which, in the case of a married
couple, it is the husband and the husband alone who is the chargeable person
within the meaning of the Income Tax code and that nothing in the Finance Act,
1988 has altered that position. It is submitted that these Sections apply to
the present case and that the Plaintiff is not a chargeable person.
8. On
behalf of the Defendants it is submitted that one looks at Section 105 of the
Income Tax Act, 1967 to identify the persons chargeable and they are the
"persons......receiving or entitled to the income in respect of which
tax.......is to be charged". It is submitted that since the Plaintiff is the
person who received or was entitled to receive the income she is by virtue of
this definition a chargeable person within the meaning of the code. Moreover,
it is submitted that Section 194 of the Income Tax Act, 1967 does no more than
create a mechanism by which the Revenue is entitled to assess and charge a
husband to tax in respect of his wife's income but that it does not interfere
with the provisions of the Income Tax Act to which one must have regard in
determining whether the wife is chargeable to tax.
9. Accordingly,
since no election was made in the present case the provisions of Section 194
apply.
11. The
circumstances in which Sections 194 and 195 came to be enacted and introduced
into the Income Tax Act, 1967 were the finding by the Supreme Court in
Murphy
& Another -v- Attorney General
1982 I.R. 241 that Sections 192 to 198 (inclusive) of the 1967 Act were
repugnant to the Constitution. These Sections provided that by virtue of
Section 192 of the Act, the Plaintiff's wife's income was deemed for income tax
purposes to be her husband's income and not her own. Section 197 of the Act
provided that either a husband or a wife might apply to have his or her income
tax assessed, charged and recovered separately and not as a married couple.
However, Section 193 provided that in such a case the applicant would not be
entitled to any greater sum by way of personal relief than that to which they
would have been entitled if no such application were made. Provisions of
various Sections of the Finance Acts then in force resulted in an adverse
differential been applied to married couples. These were lessened but not
completely removed by subsequent amending legislation. There remained an
adverse differential been applied to married couples. Sections 192 to 198 were
declared repugnant to the Constitution and a necessity arose to replace them
with new legislation. Section 194 and 195 came into existence as a
consequence. They gave married couples the right to be treated as single
persons for tax purposes and gave them the right to opt to be treated either as
a married couple or as single persons. The new Sections reintroduced the
concept of treating the wife's income as being that of the husband.
12. I
am of the view that while the Respondents approach and construction of Section
105 of the Act is acceptable in other circumstances (this approach in effect is
that one finds the source of the income, one finds the person enjoying or
entitled to enjoy the income, and one thereby identifies the person
chargeable). However, when one is concerned with a case for which "Special
Provisions" have been made within the Income Tax code different considerations
must be applied.
13. Part
IX, Chapter 1 of the Income Tax Act, 1967 is entitled "Special Provisions as to
Married Persons" and it seems clear to me that in so far as there may be a
conflict between Section 105 and these special provisions in Chapter 1, then
the special provisions must take precedence. Section 194 contains words which
are clear and unambiguous. It provides that the husband is to be "assessed and
charged to tax in respect of his wife's total income" and that the wife's
income "for all purposes of the Income Tax Acts.......shall be deemed to be
income of his".
14. And
again at subsection (c) of Section 194 it is provided that the tax on the
wife's income shall "instead of being assessed on her, be assessed on him". In
my view, the submission that Section 105 prevails, in the light of these
provisions, cannot be sustained.
15. It
has been submitted that subsection (b) of Section 194(1) should be construed as
constituting an exception to the overall provisions of the Section. I do not
accept this. This subsection, in my view, does no more than to provide that
the obligation thrust on the husband by the Section remains intact even if
there is a dispute as to whether part of the wife's income is chargeable to
tax.
16. It
is further submitted by the Respondents that I should attach significance to
the choice of word "assessable" in the latter part of subsection (c). The
submission is that the use of the word "assessable" instead of, for instance,
"only assessed on" indicates that it is or may be assessable also on the wife.
I do not accept this submission. I do not consider such a construction is
possible having regard to the earlier part of the subsection which provides
that the tax falling to be assessed instead of being assessed on her (i.e. the
wife) shall be assessed on the husband.
17. The
second part of the Respondents submission relates to the obligation of a
chargeable person to prepare and deliver to the Inspector a return in the
prescribed form under the self assessment scheme introduced by Section 10 of
the Finance Act, 1988.
19. It
is the Respondents submission that, thereafter, Mrs. Gilligan was obliged, as
the chargeable person, to prepare and deliver to the Inspector on or before the
31st January, 1996 a return in the prescribed form.
20. The
definition of a chargeable person contained in the Finance Act, 1988 is
"Chargeable Person means, as respects a chargeable period, a person who is
chargeable to tax for that period whether on his own account or on account of
some other person but, as respects income tax, does not include a person
(exceptions of no relevance)".
21. It
is clear, therefore, that one only becomes a chargeable person where one is
chargeable for tax in the relevant period. In this context the relevant period
was the period during which Mr. and Mrs. Gilligan were living together as
husband and wife.
22. As
I have already indicated I am of the view that Section 194 of the Act rendered
23. Mr.
Gilligan the chargeable person for that period and accordingly I am satisfied
that there was no obligation upon Mrs. Gilligan to comply with the obligations
to prepare and deliver a return in the prescribed form to the Inspector.
25. With
regard to question number 2, in view of my answer to question number 1, this
does not arise.