Bennett
| Jurisdiction | UK Non-devolved |
| Judgment Date | 03 April 2000 |
| Date | 03 April 2000 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
Arrow Nominees Inc v Blackledge Transcript, 2 November 1999
Bennett VATNo. 14,976; [1997] BVC 4122
Bennett v C & E Commrs VAT[1999] BVC 143
Biguzzi v Rank Leisure plc WLR[1999] 1 WLR 1926
C & E Commrs v Gil Insurance Ltd TAX[2000] BTC 8009
Farm Facilities (Fork Lift) Ltd VATNo. 2366; (1987) 3 BVC 567
Feehan v C & E Commrs VAT[1995] BVC 19
GUS Merchandise Corp Ltd (1978) VATTR 28
Haque VATNo. 16,047; [1999] BVC 2272
Maharani Restaurant VATNo. 15,088; [1997] BVC 4146
Mills v Cooper UNK[1967] 2 All ER 100
Parekh v C & E Commrs VAT(1984) 2 BVC 200,025
R v C & E Commrs, ex parte Kay & Co Ltd VAT[1997] BVC 128
Samuels v Linzi Dresses Ltd ELR[1981] 1 QB 115
UCB Corporate Services Ltd (formerly UCB Bank plc) v Halifax (SW) Ltd TLRThe Times, 23 December 1999; [1999] CPLR 691
Wan t/a Wans Chinese Takeaway VATNo. 14,829; [1997] BVC 2364
Western Fish Products Ltd v Penwith District Council UNK[1981] 2 All ER 204
Tribunals - Application - Commissioners' application for hearing to be postponed - Period of notice of application - Whether application be struck out pending hearing of similar application - Appellant's application for statement of case to be struck out - Whether wholesale disregard of rules by commissioners - Replacement of original assessment - Whether power to make new assessment - Whether estoppel by record - Whether defence of res judicata applied - Whether interests of justice required appeal to proceed - SI 1986/590Value Added Tax Tribunals Rules 1986 (SI 1986/590), r. 11, 19 and 23.
The issues were (1) whether the commissioners' application for the hearing to be postponed pending the hearing of another similar application should be allowed and (2) whether the appellant's application that the appeal be allowed on account of the invalidity of the assessment and the commissioners' non-observance of the rules should succeed.
In February 1999, the High Court allowed in part an appeal from an earlier decision of the tribunal concerning the appellant's compulsory registration, his liability to a penalty for failing to notify his liability to register and the validity of an assessment for tax and remitted the case to the tribunal for reconsideration ([1999] BVC 143). Between the original tribunal hearing which took place in April 1997 and the court hearing, the commissioners withdrew the assessments, substituting new ones. However, they omitted to bring this fact to the attention of the High Court. On 23 March 1998, the appellant appealed against the new assessment and on 4 December the tribunal directed that all matters relating to this appeal be stood over for six months or 56 days pending the release of the court's judgment in the earlier appeal. On 19 May 1999, the Tribunal Centre wrote to Customs saying that the 1998 appeal had been stood over until 19 May and that the stand-over had expired, requesting action within seven days. On 24 June, Customs applied for a further stand over until 26 July, saying that the matter had been overlooked. On 26 July, Customs submitted their statement of case in the 1998 appeal. On 9 August, the appellant applied for directions (1) that the statement of case and assessment of 25 February 1998 be struck out, (2) that costs be awarded against the commissioners and (3) that the hearing take place in public. The hearing of the application was set for 14 February 2000, but on 9 February Customs applied for the hearing to be vacated. The appellant objected.
Held, dismissing both the appellant's application that the statement of case and new assessment be struck out and the commissioners' application that the hearing be postponed:
1. Customs had nearly six months' notice of the appellant's application to have the commissioners' statement of case struck out and the appeal to be allowed and nearly two months' notice of the hearing date and yet did not apply to have the date vacated pending the hearing of the other similar application. The other appeal concerned a different appellant whose details were unknown and whose application would be heard in private. Each appellant was entitled to have his case heard and argued speedily and justly and the hearing of the appeal of one appellant should not be held over pending legal argument in another appeal except in exceptional circumstances or where the parties agreed.
2. Customs had until 14 April or 19 May 1999, according to whether the appellant or Customs was right, in which to serve their statement of case but in either case it had expired when Customs' applied on 24 June for an extension and it had to be assumed that it was out of time.
3. On the issue of whether for that reason it should be struck out, the effect of which was that the appeal would be allowed, there was nothing in the rules which enabled the tribunal to allow an appeal solely on account of delay by Customs.
4. Nevertheless, assuming for the purpose that such a power existed, following authority relating to other areas of the law, only a wholesale disregard of the rules would justify striking out the statement of case and the fact that it was served on 26 July 1999 rather than in April did not result in any risk that the appellant would not receive a fair trial. Therefore, it would not be appropriate to strike out the 1999 statement of case and allow the appeal.
5. On the issue of whether Customs could make the new assessment, it was necessary to decide whether the tribunal could strike out one issue in an appeal. The conclusion on this point was that it did, in the sense that it had the power to strike out the issues as to whether the assessment was made to best judgment and whether it was excessive.
6. To the appellant's argument that the matter had already been decided in previous proceedings and that therefore the doctrine of res judicata or estoppel arose, the appellant was not assisted in this respect, since the subject matter of the dispute in the 1996 appeal was not the same as that in the 1998 appeal, the original assessment having been withdrawn and replaced by another.
7. It was a grave discourtesy to the court that it had not been informed of the withdrawal and replacement of the assessment. However, it had been a failure of both parties and it could not be said that there had been an abuse by Customs of the process of the court with the consequence that the new assessment should be struck out. Rather, the interests of justice required that the substantive issue be determined speedily by a newly constituted tribunal.
[The tribunal set out the facts summarised above and continued as follows.]
26. Each of the applications is considered separately starting with that of Customs and Excise.
27. On 9 February 2000, Customs and Excise ["Customs"] applied for the hearing on 14 February 2000 to be vacated on the ground that the issue as to the extent of the power of the tribunal to strike out, dismiss or allow appeals for non-compliance with rules or directions of the tribunal was the subject of an application in another appeal and both applications should be heard together. That application was objected to by the appellant.
28. For Customs, Mr McNicholas accepted that the appellant had not been given 14 days' notice of the application as required bySI 1986/590r. 11 but SI 1986/590r. 23(2) [of the Value Added Tax Tribunals Rules 1986 (SI 1986/590)] provided that no notice was required for an application made at a hearing. The question of the extent of the tribunal's power to strike out an appeal was to be argued on an application in another appeal and was a difficult area of law.
29. For the appellant, Miss Lonsdale argued that SI 1986/590r. 23(1) required 14 days' notice of the application. Customs had known of the date of this hearing in December 1999 and should not have waited until the last minute to apply for the hearing to be vacated. The extent of the tribunal's power to strike out went to the heart of the argument on the appellant's application.
30. In considering the arguments of the parties, I start with the Rules. The procedure before the tribunal is governed by the SI 1986/590Value Added Tax Tribunals Rules 1986 (SI 1986/590) ("the Rules"). SI 1986/590Rule 11describes the method of applying for a direction otherwise than at a hearing. An application is made by notice served at the tribunal centre; a proper officer sends a copy of the notice to the other party to the application; and, within fourteen days of the date of such notification, the other party must indicate whether he consents to the application.SI 1986/590Rule 23 contains provisions as to notices of hearings. The relevant parts provide:
23(1) A proper officer shall send a notice stating the date and time when, and the place where, an appeal will be heard to the parties to the appeal which, unless the parties otherwise agree, shall be not earlier than 14 days after the date on which the notice is sent.
23(2) Unless a tribunal otherwise directs, an application made at a hearing shall be heard forthwith, and no notice thereof shall be sent to the parties thereto.
23(3) Subject to paragraph (2) of this rule, a proper officer shall send a notice stating the date and time when, and the place where, an application will be heard which, unless the parties shall otherwise agree, shall not be earlier than 14 days after the date on which the notice is sent …
31. Thus SI 1986/590r. 23(1) relates to notices of appeals and SI 1986/590r. 23(2) and r. 23(3) relate to notices of applications. Accordingly, SI 1986/590r. 23(2) and r. 23(3) are relevant to this application.
32. Dealing first with SI 1986/590r. 23(3) the hearing was fixed for 14 February 2000 and the date of the application was 9 February 2000. The appellant did not agree to shorter notice. Accordingly, as the appellant had not received 14 days' notice of the application it could not...
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Bennett v Commissioners of Customs and Excise (No 2)
...the taxpayer applied to strike out the statement of case. The tribunal dismissed this application and the taxpayer appealed (No. 16,590; [2000] BVC 2334). Issues (1) Whether the statement of case was out of time. (2) Whether the commissioners acted ultra vires in issuing the 1998 assessment......