PARISH Court judge Justice Patichia Lopez on Monday urged business owners to file their proper returns as she warned tax cheats against cooking their books, stating: “There is no beating the system.”

Lopez issued the caution while presiding over matters involving two used car dealers — at the Corporate Area Parish Court (Civil Division) on Sutton Street in Kingston — who pleaded guilty to three counts each of making a false statement to Tax Administration Jamaica (TAJ) commissioner general submitting “nil return” (zero income or activity) over several years.

Under the Income Tax Act “any person who, for the purpose of obtaining any allowance, reduction, rebate, or repayment in respect of income tax, either for himself or for any other person, or who in any return, statement, declaration, form or particulars delivered under this Act, knowingly makes any false statement or false representation, commits an offence, shall be liable, in the case of a first offence, to a fine not exceeding $2 million, and, in default of payment thereof, to imprisonment for a term not exceeding one year”.

On Monday, a stern Justice Lopez chastised Jerome Larmond, director of Videle Imports Limited, who pleaded guilty to three counts of making a false statement to the TAJ commissioner general for nil returns in 2020, 2021, and 2023, telling the businessman that if he were to face her in court again the maximum fine would be levied on him.

Attorney Shantalle Bannerbie, who represented TAJ, in outlining the allegations against the entity said, while it had declared nil returns for 2020, 2021 and 2023, the due diligence of TAJ investigators had shown that the company had sales of $29 million in 2020 alone, $6.578 million for 2021, and $18.669 million for 2023.

Larmond, in his defence, said the nil return for 2021 had been because of the COVID-19 pandemic.

Begging the judge for “leniency” for the business which, he said, was “a small operation”, a seemingly contrite Larmond said the other returns had been filed as nil because a General Consumption Tax (GCT) audit was being conducted.

“You must realise that even if you want to file nil returns while holding, you have to go back and fix it; if not it’s going to be a costly mistake for you. That [audit] was completed last year and you sat down and allow TAJ to take you to court?” a no-nonsense Lopez enquired.

When told that the company had also filed “nil return” for 2024 the judge took Larmond to task.

“When you file nil, do you know what that means? So how do you expect me to exercise leniency; 2024 is also nil so chances are you are coming back before me, and now the entity is exposed for $5 million? So tell me now the extent of the discretion you would want me to exercise because the discretion I was minded to exercise now, I am not so inclined,” she said sternly.

“I am not sure, I can’t answer,” Larmond said quietly.

“But you can check, you are in a position to verify anything the accountant is saying he or she is doing, you can. Ignorance is not a defence… tell me now, because if they bring you back here for 2024 and 2025, rest assured we are starting at $2 million,” Lopez threatened.

“Rest assured I won’t, mi’lady. Everything will be brought up to date before the week ends. I promise you,” Larmond said.

In slapping the businessman with a $700,000 fine, which had to be paid immediately, Lopez said, “Mr Larmond, everything can be cross-referenced… you can’t put it all on the accountant; that is why you are the one who has oversight. So Mr Larmond, don’t make the same mistake twice, you now know you need to file proper returns in respect of the years 2024 and 2025.

“You need to bear in mind that an audit can be conducted at some point in time, and that audit can go as far back as six years; so if you are hiding anything they are going to find it and you have no choice, you have to give the TAJ access. There is no beating the system, that is what I want all of you sitting inside here to understand. You might think you can file nil returns but then guess what, when you hear that they are giving back some money in terms of GCT and you go and claim, that is going to show something entirely different,” she said in addressing other litigants.

Also on Monday, Gregory Forrester, director for Walk In Drive Out Limited used car dealership, also located in the Corporate Area, pleaded guilty to three counts of making a false statement to the TAJ commissioner general for nil returns in 2021, 2022, and 2023.

“Alright Mr Forrester, are you in a position to enter a plea?” Lopez asked, to which Forrester quickly replied, “Yes, your honour, I plead guilty.”

Counsel for the TAJ told the court that for 2021 the company imported 135 vehicles and sold six for $13.3 million. The attorney said for 2022 the company conducted sales amounting to $50.699 million and filed amended returns for 2023 of $66 million.

Forrester, in pleading guilty to all three counts, was ordered to pay $600,000 before leaving the court’s precincts.

“So, Mr Forrester, remember you have oversight you know what exactly needs to happen, so we never make the same mistake again,” Lopez said in adjourning the matter.