THE Caribbean Court of Justice (CCJ) has ordered the Guyana Revenue Authority (GRA) to repay more than $45 million to former bauxite worker, James Ramsahoye, for taxes it had unlawfully deducted in 2004.
The CCJ had allowed the appeal on November 26, 2021, but only issued the reasons for its decision on Thursday, May 19, 2022.

The Trinidad-based court had ordered that the money belonging to Ramsahoye, which it said the GRA had unlawfully deprived him of, should be repaid to the taxpayer.
The CCJ legal action has its genesis in another matter where Ramsahoye was awarded some $78 million in damages by Guyana’s Court of Appeal.

The action for breach of contract of service was brought against his former employer, Linden Mining Enterprise Ltd (‘Linmine’).
These damages constituted a loss of salary for 41 months (until Ramsahoye reached 65 years of age), pension for the years 1972-98, and interest.

However, in 2004, the GRA wrote directly to Linmine demanding that the company pay GYD$45,132,975.00 for income tax allegedly owed by Ramsahoye for the years 1990-1998 in accordance with Sections 93 and 102 of the Income Tax Act, Cap 81:01.

The bauxite company agreed and paid GRA the sum by deducting it from the damages owed to Ramsahoye, without informing him. In fact, Ramsahoye only found out about Linmine’s payment to the GRA when he sought to enforce the judgment against Linmine.

However, he was totally denied his right to dispute the GRA’s assessment.
Ramsahoye subsequently initiated proceedings in the High Court of Guyana against the GRA. That Court later issued an order quashing the assessment of tax, finding that the damages awarded were not taxable.
The GRA then appealed to the Court of Appeal. The Court of Appeal upheld the quashing order.

CCJ Judge, Justice Denys Barrow, who delivered the reasons of the majority of the Court, said that GRA’s attorney acknowledged that the violation of the dispute resolution procedures under the Act nullified the entire assessment, both in respect of the years 1990-1998 and Ramsahoye’s loss of earnings.

The CCJ, therefore, noted that because the Court of Appeal had upheld the quashing of the assessment, the matter could have been resolved by a simple application to the High Court for an order directing the Registrar to pay the sums to Ramsahoye.

Justice Barrow explained that success on the ground of appeal does not mean that the appeal is allowed.
He further explained that in this case, the Court of Appeal’s finding that damages were taxable in principle had no effect on the result, which was the upholding of the quashing order.

The CCJ, therefore, found that the order of the Court of Appeal that the appeal was allowed in part, was wrong.
CCJ Justices Wit and Burgess, in their respective reasons, considered whether the damages for breach of contract of services awarded to Ramsahoye was subject to income tax.

Justice Wit reasoned that the damages paid to Ramsahoye fell squarely under s 5(b) of the Act as they constituted compensation for the termination of a contract of employment.
Justice Burgess found that the damages, being compensatory in nature, were income within the meaning of s5(b) of the Act.

However, he stated that the damages could not be said to be derived ‘from employment’ as the Court of Appeal awarded Ramsahoye income until he reached age 65, and that the damages were not in respect of any services rendered but were awarded for his wrongful dismissal.

He further found that Ramsahoye could enforce the return of the sum unlawfully deducted by the GRA, as a taxing authority that erroneously taxes a person could be ordered to repay the money taxed plus interest as a matter of common law.
Therefore, Justice Burgess decided that the principle of ‘unjust enrichment’ applied as the GRA was enriched, which was at the expense of Ramsahoye.

He found that not only was it unjust but the GRA’s defence that it was acting according to the powers granted to it under the Act was not a defence.
The appellant was represented by C.V. Satram, R. Satram and R. Motilal. The respondent was represented by J Stuart-Adonis, H Yasin-Nandlall, M. Halley, F. Hamilton, O. Gordon, and J. Persaud.