The Gazette 1992

GAZETTE

JANUARY/FEBRUARY 1992

Stamp Duty - No Amnesty for Interest

Section 100 Finance Act 1991: Penalties and Interest.

Revenue Commissioners to charge a penalty on an instrument pre- sented for stamping during the period 29 May, 1991 and 1 November, 1991 was refused. An appeal against that decision was unsuccessful in the Supreme Court (21 November, 1991) where Mr. Justice O'Flaherty pointed out that s 19(1) gave the complete answer to the application. While November 1 has gone by, the above may be of interest to a number of taxpayers who paid under protest in the hope that the Revenue ruling might be set aside by the Courts. The then Chairman, of the Taxation Committee, Brian Bohan, wrote to the Revenue Commissioners last November about this issue and received the following reply: Dear Mr. Bohan, I refer to your letter of 4 November concerning the statement of prac- tice on stamp duty and in particular the provisions in the Finance Act, 1991, relating to the charging of interest. Although your letter does not outline the aspects of our inter- pretation of section 100 with which you disagree I assume that the disagreement revolves around the treatment, for penalty purposes, of instruments presented for stamping between the passage of the Act and 1 November, 1991. An argument has been advanced that there were no provisions for the charging of interest during that period. Apart from the fact there was certainly no intention to create a legislative void for the charging of interest it is the view of the Revenue Commissioners that even the most literal reading of section 100 does not support the con- tention that one was created. In the interpretation of statutes one is, in B.H. Gib/in B.L.

general, confined to a consideration of the actual words used. Section 100 refers to the substitution of a new section for the then existing section 15 of the Stamp Act, 1891. At the end of the revised section 15 it is stated that the effective date of the revised provisions is 1 November. To determine the sense and intention of section 100 the section must be construed as a whole. A dictionary definition of " subs t i t u t i on" is "change of one t h i ng for a n o t h e r ". The Act changes the then existing section 15 for the revised version. That change can only take place on the coming into effect of the revised section 15 i.e. 1 November, 1991. Any other interpretation would lead to the conclusion that the then existing section 15 was substituted for by a legislative blank. This wou ld be to strain the plain meaning of the words of the Act and the intention of the Oireachtas beyond what is reasonable and acceptable. Given this technical background to the interpretation of the section its practical effect is to provide that instruments executed prior to 1 November are liable to the then prescribed interest charges up to 31 October. Thereafter they are liable to the new charges. A comparable situation has arisen many times in other taxes where interest charges have been varied. Stamp duty is unique only in that the charges were not varied for over a century. There remains then the question of the further interest charges of 10%, 2 0% and 3 0% of the duty provided for in section 100 of the Finance Act, 1991. These further cha r ges w i ll app ly to pre 1 November, 1991 documents as if, for the purpose of these charges, the documents were executed on 1 Novembe r, 1991. Th is avoids (Continued on page 34)

Many commentators on s 100 Finance Act, 1991 took the view that there was a lacuna in the Act because the new penalty and interest provisions did not take effect until 1 November, 1991 and that the old provision in s 15 Stamp Act, 1891 was repealed on 29 May, 1991 the date of passing of the Act. On that interpretation no penalties or interest were leviable on i ns t r umen ts presented for stamping between 29 May, 1991 and 1 Novembe r, 1991. The Revenue response was to state that the interpretation of statutes is confined to the actual words used. To d e t e rm i ne t he sense and meaning of s 100, the section must be construed as a whole. Given the use of the word 'substitute' in the section and given the ordinary meaning of that word, the correct interpretation of the section is that the old provisions cease to have effect only when new provisions become operative. To contend that s 100 created a legislative void would be to strain the plain mean- ing of the words of the Act and the intention of the Oireachtas beyond what is reasonable and acceptable. Bo th v i ews appear to have overlooked Section 19 (1) of the Interpretation Act, 1937 wh i ch provides: '.'Where an Act of the Oireachtas repeals the whole or a portion of a previous statute and substitutes other provisions for the statute or portion of a statute so repealed, the statute or portion of a statute so repealed shall, unless the contrary is exp r es s ly p r ov i ded in t he repealing Act, continue in force until the said substituted provisions come into operation". A recent application (O'Leary -v- Revenue Commissioners) to the High Court seeking liberty for judicial review of a decision of the

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