The Supreme Court of Maldives made a landmark decision in the case of Moosa Naseer v Maldives Inland Revenue Authority (MIRA) on June 22, 2020. The case centered around the authority of MIRA to sue for non-tax payments and whether it had the legal power to initiate court action to recover lease rent and fines due under an agricultural lease from Moosa Naseer. The Court unanimously held that MIRA did not have the legal authority to do so.
The Tax Admin Act grants MIRA the power to collect and enforce tax and related fees. However, in this case, MIRA overreached its powers by attempting to recover lease rent and fines due to the state from Naseer. The Supreme Court’s decision has clarified three key points that are essential to understanding the legal authority of MIRA:
Firstly, the Court held that MIRA did not have the legal authority to initiate court action against Naseer over amounts due in lease rent and fines in October 2011. MIRA’s powers over enforcement measures were exercisable only in respect of amounts due in tax and related fees.
Secondly, the Court emphasized that even when MIRA was subsequently given enforcement power over a host of payments in section 35 of the Tax Admin Act, the amendment required all those payments to be collected under the direction of an Act, unless another Act said otherwise. The amount claimed from Naseer was neither enabled nor directed to be paid under an Act to MIRA.
Finally, the Court stated that where MIRA collects a payment on behalf of a government agency under an agreement, the exercise would sit outside its prescribed role of a tax collector. Therefore, MIRA cannot take enforcement action against non-payment of those payments.
The Moosa Naseer v Maldives Inland Revenue Authority (MIRA) case is significant because it sets a precedent for the scope of MIRA’s authority. The decision of the Supreme Court limits MIRA’s powers to tax and related fees, and it clarifies that MIRA cannot take enforcement action for non-tax payments unless it has been granted the legal authority to do so under an Act.
This case highlights the importance of clear legal frameworks and the need for regulatory authorities to operate within their prescribed roles. It also demonstrates the role of the courts in ensuring that the powers granted to regulatory authorities are exercised within the bounds of the law. The decision of the Supreme Court in this case strengthens the rule of law and protects the rights of individuals and businesses from arbitrary exercise of regulatory authority.
In conclusion, the Moosa Naseer v Maldives Inland Revenue Authority (MIRA) case is a significant milestone in the legal history of Maldives, and it highlights the importance of clear legal frameworks, the need for regulatory authorities to operate within their prescribed roles, and the role of the courts in ensuring that regulatory authorities exercise their powers within the bounds of the law.