Société Royal Gardens et Compagnie and 138 others v The Mauritius Revenue Authority (Mauritius)

In a tax appeal, a tribunal must determine every live issue properly raised by the parties. An issue is not abandoned merely because the tribunal fails to determine it or refers imprecisely to matters not pursued. The court must examine the parties’ submissions and the tribunal’s determination as a whole. Where a material issue remains unresolved, the appropriate appellate response is to remit it to the competent tribunal, subject to determination by the appropriate court if that tribunal lacks jurisdiction.

Taxpayers challenged two determinations concerning claimed losses and capital allowances under the Income Tax Act 1974. The Tax Appeal Tribunal upheld the challenge to the anti-avoidance determination but did not decide whether the claimed capital allowances should be reduced. The Commissioner later maintained that second determination. The Supreme Court of Mauritius dismissed the taxpayers’ judicial review application, holding that the Tribunal’s determination was binding only on issues actually decided and that the capital-allowances issue had not been pressed or determined. The central issue before the Board was whether either party had abandoned that issue before the Tribunal.

1. The Board allowed the appeal to the limited extent of setting aside the Supreme Court’s order. The capital-allowances issue was remitted to the Assessment Review Committee for final determination. If that Committee lacked jurisdiction, the issue was to be decided by the Supreme Court of Mauritius.

2. The Tribunal’s determination showed that the capital-allowances issue remained live. The parties’ submissions addressed it, and the issue was legally material under sections 28A and 32A of the Income Tax Act 1974. The Tribunal’s reference to issues relating to the Act, time-barred assessments, the ski lane and “etc” could not reasonably encompass an issue worth substantial tax and expressly developed in writing.

3. Neither party had abandoned the issue. The reference to the Commissioner’s reliance on section 44 as the “sole ground” concerned the scope of the anti-avoidance case, not abandonment of the separate capital-allowances case. Nor did the Tribunal’s statement that it determined all the appeals in favour of the taxpayers decide the unresolved issue, since the appeals had been consolidated.

4. The fact that the Tribunal did not determine the issue did not establish abandonment. Once the parties disputed the effect of the determination, the sensible course would have been to return to the Tribunal for a decision on the outstanding issue.

5. Subject to written submissions, there was to be no order as to costs before either the Supreme Court or the Board, because neither party had fully succeeded.

• Privy Council — Appeal from the Supreme Court of Mauritius allowed in part. The order was set aside and the capital-allowances issue remitted to the Assessment Review Committee, subject to determination by the Supreme Court if the Committee lacked jurisdiction.
• Supreme Court of Mauritius — Judicial review application dismissed on 30 April 2008. The Tribunal’s determination was held binding only on issues actually decided, and the capital-allowances issue was treated as neither pressed nor determined.
• Tax Appeal Tribunal — On 20 December 2002, the appeal concerning the anti-avoidance determination was upheld, but the capital-allowances issue was left unresolved.