Derek Achong

A food dis­tri­b­u­tion com­pa­ny has won its law­suit against the Comp­trol­ler of the Cus­toms and Ex­cise Di­vi­sion over a move to seek to back du­ties on ship­ments of frozen pota­to wedges im­port­ed by it over the past decade. 

De­liv­er­ing judg­ment on Mon­day, High Court Judge Car­ol Gob­in up­held West­co Foods Un­lim­it­ed’s ju­di­cial re­view law­suit over the de­ci­sion. 

The law­suit be­fore Gob­in re­lat­ed to ship­ments im­port­ed by the com­pa­ny be­tween 2011 and 2017. 

In 2018, the di­vi­sion’s comp­trol­ler wrote to the com­pa­ny claim­ing that a post-clear­ance au­dit had re­vealed that it was in­cor­rect­ly al­lowed to pay the five per cent du­ty re­served for frozen French fries for its frozen pota­to wedges ship­ments when it should have paid 20 per cent. 

The com­pa­ny was asked to pay the dif­fer­ence in tax­es retroac­tive­ly. 

In de­cid­ing the case, Gob­in ruled that there was no le­gal jus­ti­fi­ca­tion for the au­dit. 

“The ac­tions of the de­fen­dant in con­duct­ing a post-clear­ance au­dit in the man­ner it did and years af­ter goods were cleared, ver­i­fied, and de­liv­ered, on­ly served to de­feat the salu­tary ob­jec­tive above of fa­cil­i­tat­ing trade, re­duc­ing time and its claim to be en­ti­tled to do this at all in­jects a lev­el of un­cer­tain­ty for im­porters which is high­ly prej­u­di­cial, un­fair, and which of­fends against com­mer­cial sense,” Gob­in said. 

Gob­in al­so ruled that the di­vi­sion on­ly had the au­thor­i­ty to claim the back du­ty in lim­it­ed cir­cum­stances in­clud­ing where im­porters are al­leged to have com­mit­ted crim­i­nal of­fences un­der the Cus­toms Act. 

“The de­fen­dant has no rov­ing ju­ris­dic­tion to sim­ply em­bark on a re­clas­si­fi­ca­tion ex­er­cise, and to de­mand fur­ther du­ty where an im­porter has com­plied with all the guide­lines and du­ty has been as­sessed and paid and de­liv­ery of goods has been al­lowed,” Gob­in said. 

“The Act makes sen­si­ble ex­cep­tions for the dis­cov­ery of crim­i­nal ac­tiv­i­ty, but oth­er­wise, in cir­cum­stances where it is rea­son­able to al­low post clear­ance au­dits for ex­am­ple in cir­cum­stances of hu­man or tech­no­log­i­cal er­rors, giv­en the clear­ly stat­ed poli­cies of the Di­vi­sion and the need for cer­tain­ty, a pe­ri­od of six months from date of de­liv­ery and no more should be al­lowed,” she added. 

Gob­in ruled that the com­pa­ny had a right to be heard be­fore the de­ci­sion was tak­en, which was breached by the di­vi­sion by on­ly al­low­ing it to pro­vide lit­er­a­ture to sup­port its con­tention that “wedges” were “fries” af­ter the de­ci­sion was com­mu­ni­cat­ed. 

“In the cir­cum­stances, I have con­clud­ed that not on­ly was there a de­nial of the right to be heard but there was a pre­de­ter­mi­na­tion of the is­sue in any case which ren­dered even the in­vi­ta­tion to sub­mit lit­er­a­ture a sham,” Gob­in said, as she de­scribed the de­ci­sion as pro­ce­du­ral­ly un­fair. 

In her rul­ing, Gob­in not­ed that there were in­con­sis­ten­cies in the im­port du­ty pol­i­cy for frozen French fries, which was based on the man­u­fac­tur­er de­scrib­ing wedges as a “spe­cial­i­ty prod­uct”. 

“So im­por­tant a de­ci­sion on clas­si­fi­ca­tion for ex­emp­tion should not re­ly on the man­u­fac­tur­er’s mar­ket­ing choic­es. If any­thing I should have thought that more weight would be at­tached to the cer­ti­fi­ca­tion from health of­fi­cials from the port of ex­port as to how the prod­uct would be clas­si­fied,” she said. 

In the judg­ment, Gob­in quashed the de­ci­sion and or­dered the comp­trol­ler and the Di­vi­sion’s Tar­iff Clas­si­fi­ca­tion Com­mit­tee to re­con­sid­er the frozen French fries du­ty pol­i­cy. 

The di­vi­sion was or­dered to pay the com­pa­ny’s le­gal costs for the law­suit. 

The com­pa­ny was rep­re­sent­ed by Jagdeo Singh, Leon Kalicha­ran, Sav­it­ri Sama­roo and Ka­ri­na Singh. 

Kar­lene Seenath, Maria Bel­mar, Nicol Yee Fung, Am­ri­ta Ram­sook and Kezia Red­head rep­re­sent­ed the Cus­toms Comp­trol­ler.