Acting Chief Justice Yonette Cummings-Edwards last week granted provisional orders quashing the government’s decision to revoke an investment agreement with a Berbice businessman and the demand made by the Guyana Revenue Authority (GRA) for him to pay $212M in customs duties and taxes that were not applied due to concessions that he was granted with the expectation that he would engage in mining.
Inshanally Bacchus, the owner of I&R Bacchus Trucking Service, located at Lot 139, Section ‘D’, Bush Lot Village, West Coast Berbice, said in court documents that it was GRA’s demand for payment and the threat of seizure and forfeiture of his machinery and other assets that prompted him to file a High Court action.
In his application to the court, filed by attorney Anil Nandlall, Bacchus admits that he was granted concessions on duties and taxes under an Investment Development Mineral Prospecting, Mining and Stone Quarrying Agreement with government, but maintained that he had never indicated that he was the holder of any mining concession. Instead, he claims that it was the Guyana Geology and Mines Commission (GGMC) that was responsible for misrepresentations and therefore he ought not to be held liable for its negligence.
In a Notice of Motion, Nandlall asked that the court grant several orders as well as costs and reliefs to Bacchus.
Nandlall asked the court to grant an Order or Rule Nisi of Certiorari directed to the Minister of Finance Winston Jordan quashing his decision, made on November 23, 2016, which purports to terminate the Investment Development Mineral Prospecting, Mining and Stone Quarrying Agreement entered into on the March 13, 2014 between the government and Bacchus on the grounds that the said decision was “capricious, whimsical, arbitrary, in breach of the rules of natural justice, [and] in violation of the Applicant’s legitimate expectations.”
He also asked the court to grant a Writ of Certiorari directed to the Minister of Finance quashing the decision he made; an Order or Rule Nisi of Certiorari directed to Fitzroy Corlette, Head Law Enforcement at GRA, quashing his decision to demand from Bacchus by letter, dated November 22, 2016, $212,378,021 as customs duties and taxes in respect of certain machinery, equipment and motor vehicles for which tax exemptions were granted; a Writ of Certiorari directed at Corlette quashing the decision he made; and an Order or Rule Nisi of Prohibition directed to the GRA restraining it and its servants from seizing, forfeiting and/or disposing certain machinery, equipment and motor vehicles belonging to Bacchus.
Justice Cummings-Edwards on March 10 issued an Order or Rule Nisi of Certiorari quashing the Minister’s decision and called on him to show cause why the order should not be made absolute. She ordered that an Order or Rule Nisi of Certiorari be directed to Corlette quashing his demand for Bacchus to pay the $212M and that he must show cause what why the Order should not be made absolute.
An Order or Rule Nisi of Prohibition was also issued to the GRA stopping any seizure, forfeiture and/or disposing of machinery, equipment and motor vehicles belonging to Bacchus and requesting that cause must be shown why the order should not be made absolute.
No intention of mining
In his Affidavit in support of a Notice of Motion, Bacchus explained that on October 29, 2013, he entered into a written agreement with the Bauxite Company of Guyana Inc. (BCGI), a mining company, to carry out certain mining operations mainly at Kurubuka, Upper Berbice River, to evacuate and transport bauxite overburden.
He said that by way of a letter, dated November 14, 2013, he applied to the then Minister of Natural Resources and the Environment Robert Persaud for a waiver of duties and taxes on a list of trucks and machinery.
Bacchus said the waiver was granted and before signing an agreement he told the officers of the GGMC that he was not engaged in any form of gold or diamond mining and had no immediate intention of doing so but rather his only activity at the time was the excavation and transportation of bauxite mineral to and from various locations as stated in his application.
He said he was informed that the agreement before him was the standard prototype agreement being used by the Commission for the purpose of recommending the grant of the concessions for which he had applied.
Bacchus said that he signed the agreement, which was also signed by the then Minister of Finance Dr. Ashni Singh, and witnessed by a GRA officer and the GGMC.
He said he was then advised to apply to the Commissioner of General of GRA for VAT exemptions on the equipment for which he required the exemptions. On December 19, 2013, he said he wrote to the Commissioner-General and he was subsequently granted exemptions for heavy-duty caterpillar equipment. On April 2, 2014, Bacchus said he received a letter from GGMC officers to apply to the GRA for exemptions on the items contained in the list approved by the Minister of Finance and that copies of invoices and worksheets for every consignment or cargo imported must be submitted before the arrival of the items to facilitate timely processing of applications for tax exemptions.
Bacchus said that he ordered from N.M Trucking Auto Sales and Agricultural Machinery eight Caterpillar trucks and one Caterpillar excavator, costing a total of approximately $464M. He was granted tax exemptions for the machinery on April 16, 2014. The machinery arrived subsequently and after the tax exemptions were applied they were transported to the mining operation at Kurubuka.
He said that he made another tax exemption application on July 2, 2014 and approval was granted 16 days later. This time the tax exemption was for vehicles and equipment that totaled approximately $960M.
Bacchus said that his contractual agreement with the BCGI ended during the last quarter of 2015 and as a result his equipment was parked for several months until August, 2016, when he was contracted by China Habour Inc. to transport sand and loam for the ongoing construction works at Timehri.
It was during the month of November, 2016 that he received a letter from Corlette. The letter stated that an investigation conducted by GRA revealed that Bacchus was not the holder of a Prospecting Licence, Mining Permit, Privilege or any other licence issued by GGMC and that he had breached his agreement with government by failing to undertake any activities of an investment nature specified in the work programme that had been submitted to the GGMC. Instead, it was noted that he utilised the vehicles and machinery for the airport expansion project. As a result, he was told that he would be required to pay within 14 days $212M, representing duties and taxes due on payable on the machinery and vehicles he had imported.
Bacchus stated that it was through a subsequent letter from Corlette that he first learnt of the termination of his agreement with government. Further, he said he was never served with any notice nor was he in any manner notified of the alleged termination of the agreement. He said that as far as he was aware the tax concessions and exemptions that were granted have never been terminated or revoked.
Bacchus maintained that he has committed no wrong and that he was “full and frank” in his discussions with the GGMC from the inception and that it was the agency that was responsible for any misrepresentation.
He said that any attempt to seize his property will expose him to “tremendous and unaffordable liabilities,” financial ruin, irreparable harm and damage and will destroy his ability to discharge his contractual obligations to China Harbour Incorporated. “…the Guyana Revenue Authority cannot rely upon its own negligence or upon the negligence of the Guyana Geology and Mines Commission or the negligence of the Government of Guyana and to impugn tax exemptions and concessions granted to me, moreover when I am not in default,” he added.
The matter will be heard again on March 22 at 11 am.
