THE local appellate court yesterday put the onus back on the Carreras Group to pay the taxman $108 million for transferring its Jamaica Biscuit Company shares to a Trinidadian company three years ago.

The share transfer to Trinidad’s Caribbean Brands Limited, in exchange for a US$37-million debenture, became contentious when Carreras asked the tax department to give back the money which it claimed to have paid under duress.

The Tax authority’s refusal triggered an appeal on the group’s part to the Revenue Court which ruled that the money should be returned.

But lawyers from the Attorney-General’s Department responded with an appeal to the local Appeal Court, challenging the group’s argument that it was exempt from the tax by virtue of the fourth and sixth paragraph in the first schedule of the Transfer Tax Act.

According to lawyers representing the group, that section of the Act provides for the reorganisation or reduction of a firm’s share capital by exchange of shares in or debentures of another company, minus the tax liability.

However, two of the three judges who heard the case on appeal, yesterday ruled that the tax was payable.

The dissenting judge, Seymour Panton, said that the shares/debenture exchange represented a reorgansation of its share capital.

“In looking at paragraph 4 (2) (of the Act) it is seen that this reorganisation of the company’s share capital shall not be treated as involving any disposal of the original shares,” he said.