The Director General, Mauritius Revenue Authority v Chettiar and others

A constitutional tax exemption for prescribed presidential or vice-presidential emoluments includes a pension where the office is the source of the entitlement. The time when the pension becomes payable does not alter that conclusion.

The statute prescribing the benefits does not control the constitutional exemption merely because it distinguishes between emoluments and pensions. Parliamentary materials should not be admitted to construe legislation that is neither ambiguous nor self-contradictory, particularly where the material does not form part of the preparatory history of the enactment being construed.

The appeal concerned income tax deducted from a pension payable to Mr Angidi Chettiar after he ceased to be Vice-President of Mauritius. The pension was paid under section 4 of the President’s Emoluments and Pension Act 1992.

The Commissioner of Income Tax rejected the claim to exemption, and the Assessment Review Committee upheld that decision on 13 October 2005. After Mr Chettiar’s death, his heirs continued the appeal. On 9 September 2013, the Supreme Court of Mauritius allowed the appeal and declared the pension exempt from tax.

The central questions were whether the exemption in section 30A(3)(b) of the Constitution applied to a retiring Vice-President’s pension, whether the Income Tax Act 1995 produced a different result, and whether a statement made by the Prime Minister during the second reading of the Bill introducing PEPA could be admitted.

The appeal and the application to introduce further material were dismissed, both with costs. The Board delivered a single judgment through Lord Wilson.

1. Constitutional exemption. Section 30A(3)(b) of the Constitution provides that prescribed emoluments, allowances and privileges of the President and Vice-President are exempt from tax. Parliament enacted that provision against the background of the Income Tax Act 1974, which defined emoluments to include a pension. The constitutional term therefore included a pension. The reference to PEPA was to prescribe the benefits, not to determine their tax treatment. PEPA’s distinction between emoluments and pensions was irrelevant.
2. The 1995 Act. Under section 7(2), item one of the Second Schedule, and the relevant provisions defining emoluments, emoluments derived from the office include a pension. A pension is derived from an office where that office is its source, regardless of when the entitlement to receive it arises. The constitutional exemption was unqualified. Any inconsistent provision of the Income Tax Act 1995 would have been void under section 2 of the Constitution.
3. Prime Minister’s statement. Permission under Practice Direction 6.3.3 was refused. The law was neither ambiguous nor self-contradictory. The statement concerned a Bill which did not address the tax treatment of pensions and was not part of the preparatory history of the enactments requiring construction. In any event, the statement was incorrect. The Board also noted the authority in Madelen Clothing Co Ltd v Termination of Contracts of Service Board [1981] MR 284 in relation to the cautious use of travaux préparatoires.

The pension and other prescribed emoluments, allowances and privileges of the President and Vice-President were exempt from tax.

• Privy Council — The appeal and the application to introduce the Prime Minister’s statement were dismissed with costs: [2015] UKPC 48.
• Supreme Court of Mauritius — On 9 September 2013, Domah and Mungly-Gulbul JJ allowed the appeal and declared that the pension was exempt from tax.
• Assessment Review Committee — On 13 October 2005, the Committee upheld the Commissioner of Income Tax’s decision that the pension was taxable.