Inland Revenue sued for $34M

A $34 MILLION lawsuit has been slapped against the Board of Inland Revenue (BIR) by an oil and gas pipeline company alleging harassment by the Income Tax Department. High Court Judge Peter Jamadar yesterday granted leave to the company to apply for judicial review of the decision of the BIR to re-audit its financial records for 1998. API pipeline is involved in laying down cross-country natural gas pipelines from Amoco at Point Galeota to Atlantic Energy in Point Fortin. The company’s management yesterday pleaded to Justice Jamadar that its operations face the risk of closure and, by extension, the natural gas project, if the BIR conducts a re-audit of the Fyzabad-based company.

Filed in the Sub-Registry in San Fernando yesterday, API contended in a High Court writ that a BIR audit was conducted in 1999 of its business at Siparia Road, Massahood Junction, Siparia, for the year 1998. During the audit, the BIR obtained a Garnishee Order to hold $16.9 million belonging to API, pending the outcome of the audit. API is now alleging that on April 6, 2004, it received another notice from BIR’s chairman, Philip Gopaul, that in accordance with Section 117 of the Income Tax Act, an audit for the income year 1998 is to be conducted. The BIR also called on API to provide records for deductions and remittances of PAYE of $353,259.01 and $271,435.28 respectively. Filed by attorneys Harrikissoon and Company, API’s managing director, Feroze Hosein, stated that the BIR already conducted an audit of the company’s finances for 1998.

When it did so, the BIR put in a claim for $16.9 million. The BIR held the money on a Garnishee Order  pending the outcome of the audit. However, API sued against the BIR’s claim. In 1999, Justice Sebastien Ventour ruled that the BIR followed proper procedures in conducting a proper audit. The $16.9 million, however, is still being held on a Garnishee Order which has generated interest now totalling $30 million. With BIR’s new request to re-audit API, the pipeline company’s attorney told Justice Jamadar yesterday that to conduct an audit twice on the applicant (API) for the same tax period — 1998 — is abuse of its powers. API pleaded harassment on the part of the BIR, in which it contended that a re-audit of the same year, even though a High Court made a finding that a proper one was done for 1998, amounts to improper exercise of its powers.