He tried to justify the figures in the false GST returns he filed by providing forged invoices to the IRD, resulting in unpaid tax of $919,994, Inland Revenue said in a summary of the case.
In an earlier High Court bankruptcy proceeding Pootinun denied having fabricated anything and presumed Inland Revenue staff had accepted that the invoices were genuine because they had “used them to (incorrectly) assess the withholding tax”.
“However for them to disallow them for GST purposes is very strange,” he said in an affidavit to the High Court in 2020 on the GST issue.
Inland Revenue said in relation to this month’s sentencing decision that GST returns filed by Pootinun’s tax agent on his behalf included expenses for payments purportedly made to various sub-contractors.
But the sub-contracting arrangements were “just a ruse” to falsely claim additional costs in the GST returns.
Pootinun’s bookkeeping troubles that led to the charges go back several years.
Law blogger Mike Ross wrote that in May 2018, Inland Revenue issued assessments for GST and withholding payments due for the 2015 and 2016 tax years.
Tax law required Pootinun to deduct withholding tax from payments to hired labour but he did not respond to Inland Revenue assessments and offered no defence when it sued to recover the assessed tax debt.
Inland Revenue then applied to bankrupt Pootinun, but he complained on the basis that having paid GST on contractor invoices, he should be allowed a GST credit, Ross wrote.
Pootinun asked the High Court to dismiss Inland Revenue’s bankruptcy application, giving him time to challenge its treatment of GST.
Pootinun was too late to challenge the 2018 disputed tax assessment, Associate Judge Dale Lester ruled.
A bankruptcy notice was issued in August 2019 and served on Pootinun the following month. He then applied to set aside the judgment but the application was opposed, before it was dismissed in March 2020, leading to further action by Pootinun.
The essence of his argument was that it was “just and equitable” that he had the opportunity to seek judicial review of the court’s decision to decline his request to seek a re-assessment of the underlying tax debt on which the proceeding heard by Associate Judge Lester was based.
Pootinun argued that if he was successful then the underlying debt would fall away and the bankruptcy proceeding would come to an end.
He claimed there was “no significant prejudice” to Inland Revenue if the application was halted while the judicial review proceeded.
Associate Judge Lester said other than Pootinun’s “bare assertion” that the impugned invoices were genuine, he hadn’t provided grounds to support this claim.
By September 2020, Pootinun was liable for tax debts totalling $2.4m, including interest and penalties, of which about $527,100 was GST.
Close to $1.9m related to amounts that Inland Revenue claimed Pootinun should have withheld from payments to his contractors.
Pootinun was ordered bankrupt by the High Court in October 2020, before sentencing this month for fraud.
Tracy Neal is a Nelson-based Open Justice reporter at NZME. She was previously RNZ’s regional reporter in Nelson-Marlborough and has covered general news, including court and local government for the Nelson Mail.
