The Comptroller and Auditor General v Ireland

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 01 January 1997
• Neutral Citation: [1996] IEHC 49
• Docket Number: [1995 No. 1804p]
• Court: High Court
• Date: 01 January 1997

[1996] IEHC 49

THE HIGH COURT

No. 1804p/1995

COMPTROLLER v. IRELAND

BETWEEN

THE COMPTROLLER AND AUDITOR GENERAL

PLAINTIFF

AND

IRELAND AND THE ATTORNEY GENERAL

DEFENDANTS

Citations:

CONSTITUTION ART 33.1

CONSTITUTION ART 33.4

SAORSTAT EIREANN ART 62

COMPTROLLER & AUDITOR GENERAL ACT 1923 S7(3)

EXCHEQUER & AUDIT DEPARTMENTS ACTS 1866 & 1921

EXCHEQUER & AUDIT DEPARTMENTS ACT 1921 S2

COMPTROLLER & AUDITOR GENERAL (AMDT) ACT 1993 S3(7)

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S2

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S2(2)

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S2(4)

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S7

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S7(2)

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S7(4)

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S7(5)

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S4

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S5

WAIVER OF CERTAIN TAX INTEREST & PENALTIES ACT 1993 S6

BENNION ON STATUTORY INTERPRETATION 2ED 242

CORK CO COUNCIL V WHILLOCK 1993 1 IR 231

BENNION ON STATUTORY INTERPRETATION 2ED 243

EXCHEQUER & AUDIT DEPARTMENTS ACT 1921 S2(1)

EXCHEQUER & AUDIT DEPARTMENTS ACT 1921 S2(2)

AG V HAMILTON (NO 1) 1993 2 IR 250

KELLY ON THE IRISH CONSTITUTION 3ED CIX

CONSTITUTION ART 33

COMPTROLLER & AUDITOR GENERAL ACT 1923 S7

EXCHEQUER & AUDIT DEPARTMENTS ACT 1866 S36

Synopsis:

Constitution

Functions of Comptroller - confidentiality of tax amnesty - whether Comptroller restricted under s.7(5), Waiver of Certain Tax, Interest and Penalties Act, 1993 to carrying out audit of special collections functions under Act or entitled to carry out more general audit under statutory powers - whether s.7(5) invalid under Art.33 of Constitution - Held: Comptroller restricted to carrying out audit of discharge of special collections functions under Act - s.7(5) not invalid under Article 33 (High Court: Laffoy J. - 20/12/1996) - [1997] 1 IR 248

|Comptroller & Auditor General v. Ireland & Attorney General|

1 Judgment of Miss Justice Laffoy delivered on the 20th of December, 1996

2 Article 33.1 of the Constitution provides that there shall be a Comptroller and Auditor General to Control on behalf of the State all disbursements and to audit all accounts of monies administered by or under the authority of the Oireachtas. Article 33.4 provides that the Comptroller and Auditor General shall report to Dail Eireann at stated periods as determined by law.

3 Prior to the enactment of the Constitution, Article 62 of the Constitution of Saorstat Eireann had provided that Dail Eireann should appoint a Comptroller and Auditor General to act on behalf of Saorstat Eireann who should control all disbursements and should audit all accounts of monies administered by or under the authority of the Oireachtas and report to Dail Eireann at stated periods to be determined by law. The Comptroller and Auditor General Act, 1923(the 1923 Act) provided for the mode of appointment and terms and conditions of appointments of the Comptroller and Auditor General and Section 7(3) provided that the Comptroller and Auditor General should have and exercise, inter alia, the powers and duties conferred and imposed by the Exchequer and Audit Departments Acts, 1866 and 1921, as adapted.

4 Section 2 of the Exchequer and Audit Departments Act, 1921(the 1921 Act) dealt specifically with the examination of accounts of receipts of revenue by the Comptroller and Auditor General and provided as follows:-

5 2 "(1) The accounts of the receipts of revenue by the Departments of Customs and Excise, Inland Revenue and Post Office, and the accounts of every receiver of money which is by law payable into the Exchequer, shall be examined by the Comptroller and Auditor General on behalf of the House of Commons in order to ascertain that adequate regulations and procedure have been framed to secure an effective check on the assessment, collection, and proper allocation of revenue, and the Comptroller and Auditor General shall satisfy himself that any such regulations and procedure are being duly carried out.

6 (2) The Comptroller and Auditor General shall make such examination as he thinks fit with respect to the correctness of the sums brought to account in respect of such revenue as aforesaid, and shall, together with his report on the appropriation accounts of the departments concerned, present to the House of Commons a report on the results of any such examination."

7 Section 2 of the 1921 Act was the statutory provision which governed the audit by the Plaintiff, who is the Comptroller and Auditor General under Article 33, of the revenue account of the Revenue Commissioners for the financial year ended 31st December, 1993, which is in issue in these proceedings.

8 In respect of financial years beginning on or after 1st January, 1994, Section 2 of the 1921 has been replaced by Section 3(7) of the Comptroller and Auditor General (Amendment) Act, 1993(the 1993 Act), which provides as follows:-

9 a "(a) The Comptroller and Auditor General shall examine the accounts of the receipt of revenue of the State collected by the Revenue Commissioners and the accounts of such persons who receive money which is by law payable into the Exchequer as he considers appropriate.

10 (b) The Comptroller and Auditor General shall carry out such examinations as he considers appropriate of the accounts aforesaid in order to satisfy himself as to whether they are complete and accurate.

11 (c) The Comptroller and Auditor General shall carry out such examinations as he considers appropriate in order-

12 (i) to ascertain whether systems, procedures and practices have been established that are adequate to secure an effective check on the assessment, collection and proper allocation of the revenue aforesaid, and

13 (ii) to satisfy himself as to whether the manner in which the systems, procedures and practices have been employed and applied is adequate."

14 As regards the issues which arise for determination in these proceedings and the implication of Section 2 of the 1921 Act and Section 3(7) of the 1993 Act in such determination, in my view, there is no substantial difference between the two provisions.

15 In 1993, a scheme which has come to be known colloquially as "the tax amnesty" was introduced and given effect to in the Waiver of Certain Tax, Interest and Penalties Act, 1993(the Amnesty Act). There were two elements involved in the amnesty - the schemes which have become known colloquially as "the incentive amnesty" and "the general amnesty". It is the implementation of the incentive amnesty in the financial year ended 31st December, 1993 which has given rise to the issues in these proceedings.

16 Section 2 of the Amnesty Act identified the taxes to which the incentive amnesty applied - primarily, income tax and capital gains tax. Section 2 also identified the persons eligible to avail of the incentive amnesty, namely, individuals who owed tax on declared or undeclared income or gains in respect of any period ending on or before 5th April, 1991, but there was a proviso to Section 2(2) which, in broad terms, excluded from the scope of the incentive amnesty the following persons and taxes:

17 (a) Individuals who were subject to audit or investigation before 25th May, 1993;

18 (b) Tax which was subject to specified enforcement procedures before 25th May, 1993; and

19 (c) Tax in respect of income or chargeable gains which arose from or by reason of an illegal source or activity.

20 In effect, the proviso imposed certain eligibility pre-conditions to participation in the incentive amnesty.

21 The inducement to participate in the incentive amnesty was threefold. First, tax at a concessionary rate of 15% was accepted in satisfaction of outstanding tax. Secondly, any interest due on the outstanding tax was waived and penalties forgiven. Thirdly, the incentive amnesty was to be administered by a special collection unit staffed by the Chief Special Collector and special collectors who were bound by a declaration of confidentiality so as to ensure confidentiality and anonymity for the participating taxpayers.

22 The incentive amnesty operated on a self-assessment basis. A participating individual was required to give to the Chief Special Collector by 30th November, 1993 a full and true declaration of all income and chargeable gains in respect of which tax was unpaid embodying a statement that the declared amounts did not arise from or by reason of an unlawful source or activity. He was further required, either contemporaneously with the signing of the declaration or, in any event, not later than 14th January, 1994, to remit to the Chief Special Collector an amount equal to 15% of the declared amounts. By Section 2(4) the Special Collector was required to issue to each participating individual two documents: a certificate setting out his name and address, the settlement amount paid by him and the respective amounts of the declared amounts; and evidence that such a certificate had been given.

23 The provisions designed to guarantee confidentiality were contained in Section 7 of the Amnesty Act which provided that special collection functions might only be discharged by special collectors. The administrative tasks involved in special collection functions were -

24 (a) the receipt and retention of declarations submitted by participating taxpayers,

25 (b) the receipt, recording and lodgment of settlement amounts, and

26 (c) the issue and recording of certificates issued to participating taxpayers.

27 By subsection(2) each special collector was required to make and subscribe a declaration of confidentiality in which he undertook not to disclose to a person who was not a special collector any information he would acquire, or have access to, in the course of...