CHAPEL HILL SCHOOL LTD. vs. THE ATTORNEY-GENERAL ACCRA & ANOR. [2007]DLCA6400

Date	2007-05-04
Suit No.	H1/204/2006
Citation No.	[2007]DLCA6400

QUAYE J. A

DOTSE J. A

SAMPONG J. A.

[2007]DLCA6400
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													<main id="main" class="content" style="min-height: 60rem" >CHAPEL HILL SCHOOL LTD.<o:p></o:p>vs.<o:p></o:p>THE ATTORNEY-GENERAL
ACCRA &amp; ANOR.<o:p></o:p>[COURT
OF APPEAL, ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

H1/204/2006&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;DATE: 4TH MAY, 2007<o:p></o:p>

</div>CORAM:&nbsp;
<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

QUAYE
J. A, DOTSE J. A, SAMPONG J. A. <o:p></o:p>

</div>In
the matter of the Internal Revenue Act 2000 (Act 592). <o:p></o:p>And
<o:p></o:p>In
the matter of an appeal against assessment of tax by the commissioner Internal
Revenue. <o:p></o:p>Chapel
Hill School Ltd.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
----&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;Appellant <o:p></o:p>And
<o:p></o:p>Attorney-General&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
----&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1st
Respondent <o:p></o:p>Commissioner
of Internal Revenue&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
----&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2nd
Respondent <o:p></o:p>This
is an appeal from the judgement of Sekondi High Court delivered on 1st February
2006. The facts of this case appear to be simple and they may be summarized
before addressing the issues raised in the appeal. The appellant in this case
is an institution known as Chapel Hill School Ltd. which was initially called
Chapel Hill Preparatory School based in Takoradi and it was established about
forty seven years ago.&nbsp; It was ran by a
Board of Directors according to its instrument of incorporation and it was a company
limited by guarantee in comformity with the requirements of the Companies Code
1963 (Act 179). <o:p></o:p>In
the year 2001, the company transformed itself into a company limited by shares,
again, in accordance with the provisions of the Companies Code (1963) Act 179. <o:p></o:p>During
the period between 1994-2001 the institution was assessed to pay tax in the sum
of ¢398,649,224 by the Internal Revenue Service which herein is the respondent.
<o:p></o:p>Aggrieved
by this assessment the Chapel Hill School Limited raised an objection to the
assessment but this was overruled by the Internal Revenue Commissioner. <o:p></o:p>The
appellant pursued its right under Income Tax Decree 1975 SMCD 5 and the
Internal Revenue Act (Act 2000) by filing an appeal to the High Court, Sekondi.
<o:p></o:p>The
judge after considering the evidence before him and hearing arguments from both
sides dismissed the action brought by the appellant. <o:p></o:p>It
is against this decision that the appellant has appealled to this court and the
grounds of appeal filed are the following. <o:p></o:p>1.
The appellant school is an educational institution of a public character and
thus exempt from tax by reason of section 3(1)(d) of the Income Tax Decree 1975
SMCD 5 and the Internal Revenue Act 2000, Act 592 section 10(1)d and 94 and the
court erred in holding otherwise. <o:p></o:p>2.
The second ground of appeal is that the court erred in dismissing the appeal by
the appellant school. <o:p></o:p>Even
though they indicated that they would file further grounds, none was
filed.&nbsp; In his submission the appellant
argued the two grounds together.&nbsp; The
appellant relied heavily on section 3(1)(d) of Income Tax Decree SMCD 5 1975
(92) (d) which states: "there shall be exempted from tax the income of an
ecclesiastical, charitable and educational institution of a public character in
so far as, such income is not derived from trade or business carried on by such
institution".&nbsp; Section 10(d) of
Internal Revenue Act 2000 Act 592 also states: "the following income are
exempt from tax.&nbsp; Income accruing to or
derived from an exempt organisation other than income from any business or
trade". <o:p></o:p>The
main issue for determination is whether or not the school qualifies as a public
school. According to Black's Law Dictionary (6th Edition) "Private school
is one maintained by private individuals, religious organizations, or
corporations, not at public expense, and open only to pupils selected and
admitted by the proprietors or governors, or to pupils of a certain religion or
possessing certain qualifications, and generally supported, in part at least, by
tuition fees or charges." <o:p></o:p>The same dictionary defines Public
School as follows; <o:p></o:p>"Schools established under the
laws of the state (and usually regulated in matters of detail by the local
authorities), in the various districts, countiessic, or towns maintained at the
public expense by taxation, and open, usually without charge, to the children
of all the residents of the city, town or other district. Schools belonging to
the public and established and conducted under public authority". <o:p></o:p>From
these two definitions it is quite obvious that Chapel Hill School is not a
public school but a private school being run for profit.&nbsp; Quite apart from the composition of the
governors of the school who are not chosen by the government nor the Ministry
of Education nor the local authority, the institution is engaged in
</main>