plant or machinery. The difference is not relevant to anything in this appeal and I shall treat the two regimes as interchangeable. There is no dispute that the taxpayer received these allowances and therefore, in principle, if the termination of the franchise and lease can be regarded as a sale of the buildings and structures, prescribed fixed assets and plant and machinery to the Authority and the consideration for each of those assets exceeded the residual value after allowances, a balancing charge should be added to the profits for that year of assessment: see section taxpayer’s 18F(1). The taxpayer submitted to the Court of Appeal that the Commissioner should not at that stage be allowed to put forward a claim that the taxpayer was liable to be assessed on balancing charges. It was an entirely new basis for assessment. The Court of Appeal, in a judgment delivered by Kwan JA, with which Fok and Lam JJA concurred, rejected this objection. She said that the Court could deal with the case the “on existing materials…without the need for view was that the case further evidence.” Her Commissioner’s failed because, for reasons to which I shall in due course return, the Ordinance excluded a balancing charge in the circumstances in which the franchise and lease had come to an end. The Commissioner appeals against this decision on the merits and I shall have something to say about it later. But the chief question, in my opinion, is whether the Commissioner should have been allowed to raise the question of a balancing charge at the last minute before the hearing in the Court of Appeal.
plant or machinery. The difference is not relevant to anything in this appeal and I shall treat the two regimes as interchangeable. There is no dispute that the taxpayer received these allowances and therefore, in principle, if the termination of the franchise and lease can be regarded as a sale of the buildings and structures, prescribed fixed assets and plant and machinery to the Authority and the consideration for each of those assets exceeded the residual value after allowances, a balancing charge should be added to the taxpayer’s profits for that year of assessment: see section 18F(1). The taxpayer submitted to the Court of Appeal that the Commissioner should not at that stage be allowed to put forward a claim that the taxpayer was liable to be assessed on balancing charges. It was an entirely new basis for assessment. The Court of Appeal, in a judgment delivered by Kwan JA, with which Fok and Lam JJA concurred, rejected this objection. She said that the Court could deal with the case “on the existing materials…without the need for further evidence.” Her view was that the Commissioner’s case failed because, for reasons to which I shall in due course return, the Ordinance excluded a balancing charge in the circumstances in which the franchise and lease had come to an end. The Commissioner appeals against this decision on the merits and I shall have something to say about it later. But the chief question, in my opinion, is whether the Commissioner should have been allowed to raise the question of a balancing charge at the last minute before the hearing in the Court of Appeal.
FACV000014_2013.docx