Grove Park Development Ltd v The Mauritius Revenue Authority and another

For a statutory construction condition requiring a specified cost of building construction to be exceeded by a fixed date, the relevant costs are those of construction works completed by that date. The phrase must be read in its statutory context, including provisions requiring periodic certification of the costs of completed works and excluding ancillary infrastructure costs. Materials purchased and stored on site, but not incorporated into completed building works, therefore do not count. Where the statutory condition has not been met, a demand for the previously exempted duties and taxes, together with the prescribed penalty, is valid. The Board also found, as a postscript, that the asserted public-law defects had no arguable foundation.

The company registered a construction project under Mauritius’s 2009 stimulus legislation and obtained exemption from land transfer tax and registration duty. The exemption depended on the total costs of construction of the buildings exceeding Rs 50m by 30 June 2011. A quantity surveyor included materials on site in the certified cost, but the Mauritius Revenue Authority decided that those materials could not be counted. The Registrar-General consequently demanded duties, taxes and penalties.

The Supreme Court of Mauritius set aside the company’s application for judicial review on 23 October 2015. The company appealed to the Privy Council, arguing that materials on site formed part of the cost of construction and that the authority had acted unfairly. The central issue was the meaning of the statutory condition.

1. Appeal dismissed. The statutory condition in section 161A(28)(b) of the Income Tax Act required the total costs of construction works completed by 30 June 2011 to exceed Rs 50m. The cost of materials merely placed on site was not eligible for inclusion.
2. The wording had to be construed in context. Section 161A(32)(b) required periodic reports certifying the progress of works and the costs of construction works completed. It would be incongruous for the statutory condition to concern a wider category of costs than the reports used to monitor compliance.
3. The same construction was supported by the government’s stimulus document, the registration certificate, the company’s own contemporaneous understanding, and the statutory exclusion in section 161A(29) of ancillary infrastructure costs. Including materials on site would require an impracticable distinction between materials intended for excluded infrastructure works and materials intended for the buildings.
4. The Board rejected the company’s submission that ordinary quantity-surveying practice for interim building payments controlled the statutory question. The certificate served a different purpose.
5. The company had failed to satisfy the statutory condition. Under section 45A(7) of the Land (Duties and Taxes) Act, the Registrar-General was required to claim the exempted duty and tax, together with penalties of 20 per cent. The demand was valid.
6. The alternative judicial-review complaints, including irrationality, breach of natural justice, lack of explanation, misuse of power, failure to seek clarification, lack of transparency and frustrated legitimate expectation, had no arguable foundation.
7. The company was ordered to pay the costs of the Registrar-General and the Mauritius Revenue Authority in the appeal.

• Privy Council: The Board dismissed the appeal and upheld the Supreme Court of Mauritius order made on 23 October 2015.
• Supreme Court of Mauritius: Caunhye and Fekna JJ set aside the company’s application for judicial review.