Commissioners of Customs and Excise v Harz
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE THESIGER,MR. JUSTICE CANTLEY,MR. JUSTICE BLAIN,JUDGE KILNER BROWN |
| Judgment Date | 08 July 1966 |
| Judgment citation (vLex) | [1966] EWCA Crim J0708-1 |
| Docket Number | No. 3328/65 |
| Court | Court of Criminal Appeal |
| Date | 08 July 1966 |
[1966] EWCA Crim J0708-1
Mr. Justice Thesiger
Mr. Justice Cantley
and
Mr. Justice Blain
No. 3328/65
No. 3326/65
IN THE COURT OF CRIMINAL APPEAL
Royal Courts of Justice
MR. MONTAGUE WATERS and MR. N. BRANDT appeared as Counsel on behalf of the Appellant Harz.
MR. SEBAG SHAW, Q.C. and MR. R. DU CANN appeared as Counsel for the Crown.
MR. CHRISTMAS HUMPHREYS, Q.C. and MR. R. PRENDERGAST appeared as Counsel on behalf of the Appellant Power.
MR. D. TUDOR PRICE appeared as Counsel for the Crown.
The Criminal Appeal Act 1907 by Section 1 (4) and (5) provides that:-
The determination of any question before the Court of Criminal Appeal shall be according to the opinion of the majority of the members of the court hearing the case.
Unless the court direct to the contrary in cases where, in the opinion of the court, the question is a question of law on which it would be convenient that separate judgments should be pronounced by the members of the court, the judgment of the court shall be pronounced by the president of the court or such other member of the court hearing the case as the president of the court directs, and no judgment with respect to the determination of any question shall be separately pronounced by any other member of the court.
In this case the opinion of the Court is that there is a question of law on which it would be convenient that separate judgments should be pronounced by the members of the Court and the Court directs that separate judgments with respect to the determination of the question of law be pronounced.
On 17 December 1965, after a trial lasting 40 days at which the jury disagreed, followed by a re-trial lasting 54 days, the appellant Power was convicted on 3 counts, and the appellant Harz on 5 counts, of an indictment containing 7 counts, of conspiracy to cheat and defraud the Commissioners of Customs and Excise of purchase tax. Certain other individuals and companies were charged on the same indictment, as shown in Appendix A to this judgment.
On 20 December 1965, the appellants were sentenced by Judge Kilner Brown as follows:-
Harz to concurrent terms of imprisonment of 5 years on Count 1, 3 years on each of counts 2 and 4, and 2 years on each of Counts 5 and 7 (5 years in all). He was ordered to pay the costs of the prosecution to an amount not exceeding £5,000. Power to concurrent terms of imprisonment of 18 months on Count 1 and 9 months on each of Counts 2 and 4 (18 months in all).
The other convicted defendants were sentenced as shown in Appendix A.
Harz and Power appealed against conviction on the grounds stated in a certificate issued by Judge Kilner Brown, and they applied for leave to appeal against conviction (on other grounds) and sentence.
The grounds on which the certificate was granted may be summarised as follows:-
That a question arises as to the admissibility of answers given by the appellants to questions put by Customs officers at interviews on and between 27 February and 26 November 1963 because
- (a) the answers were not made voluntarily but pursuant to the exercise or purported exercise by the officers of powers contained in the Finance Act 1946, Section 20(3) (replaced on 1 April 1963 by the Purchase Tax Act 1963, Section 24(6).
- (b) none of the officers had any specific authority to exercise those powers;
- (c) the appellants were not required to furnish the answers within a particular time or in a particular form, except that they were required to give those answers orally and at once.
The Finance Act, 1946, Section 20(3) provides as follows:-
Every person concerned with the purchase or importation of goods or with the application to goods of any process of manufacture or with dealings with imported goods shall furnish to the Commissioners within such time and in such form as they may require information relating to the goods or to the purchase or importation thereof or to the application of any process of manufacture thereto or to dealings therewith as they may specify, and shall, upon demand made by any officer or other person authorised in that behalf by the Commissioners, produce any books or accounts or other documents of whatever nature relating thereto for inspection by that officer or person at such time and place as that officer or person may require.
The Purchase Tax Act, 1963, Section 24(6) provides in almost exactly similar terms.
The other point of law on which the appellants appeal against conviction is:-
In the case of both Harz and Power:- that a question arises as to the admissibility of books, accounts and other documents produced by the appellants and other defendants to the Customs officers because they were not produced voluntarily but pursuant to demand by the officers exercising the powers contained in the above Acts.
In the case of Harz leave to appeal was applied for on the ground that the judge misdirected the jury.
In the case of Power leave to appeal was applied for on the grounds:
- (a) that the length and complexity of the trial made it so difficult for the jury to do justice as to amount in itself to a miscarriage of justice;
- (b) that the judge's ruling, in relation to Count 1, that the jury could not find the appellant Harz guilty of conspiring with the defendant Harry Lee & Co. Ltd., produced strong and unressonable pressure on the jury to convict the appellant Power;
- (c) that the judge failed to refer adequately to the absence from the trial of one Oades who played an important part in the business conducted by Harry Lee & Co. The Court has refused leave to appeal on these grounds and has given its reasons.
Incidentally the Court thought the summing up of this long case was a masterly and helpful direction on law and fact and scrupulously fair to the accused.
The seven counts of the indictment each charged a conspiracy to cheat and defraud the Customs of purchase tax, for which Harry Lee & Co. Ltd. would be accountable, in relation to certain transactions in chargeable goods, by means of the falsification, concealment, and destruction, of invoices, records, books of account and other documents relating to those transactions. The transactions to which each count related are set out in Appendix B.
The appellant Harz was the principal defendant. In 1955 he became majority shareholder in the defendant company Harry Lee & Co., and in fact controlled the company, although he was not a director. He became a director of M. Friede Ltd. in April 1962, of Geber & Dunn Ltd. in June 1962, of Spack & Paulden Ltd. in July 1962, of Glenmar (Wholesale) Co. Ltd. Harz also ran another business in his personal capacity.
The appellant Power was a director and secretary of Harry Lee & Co. from 1955 until about the end of 1962. He was succeeded at the beginning of January 1963 by Whipp (who was acquitted).
Green was a director of Green and Russell Ltd. and the defendant Gerald Ross was employed by his brother, Sidney Ross, who owned a business known as Ross of Hackney.
The remaining individual defendants shown in Appendix A were connected with one or other of the companies Temple Meads Warehouse Ltd., M. Friede Ltd., Glenmar (Wholesale) Co. Ltd., Geber & Dunn Ltd., and Spack & Paulden Ltd., and these individuals need not be considered further.
The prosecution case was that the appellant Harz was the central figure of a conspiracy, involving an agreement between Harry Lee & Co. and himself, on the one hand, and the remaining accused, on the other hand, to cheat and defraud the Revenue of purchase tax by dealing in goods on which purchase tax should have been paid, and evading payment of the appropriate tax by covering up the real amount of trading and the real prices and omitting from books, and records, some of the transactions in goods.
Purchase tax is payable on certain types of goods only, which are known as chargeable goods. It is calculated on the wholesale value of the goods, which is a notional price which the goods would fetch in the wholesale market. There is a standard wholesale value in respect of each type and variety of goods, this value being agreed between the trade and the Customs and Excise authorities.
The tax becomes due on a "chargeable sale". This is theoretically when a manufacturer sells to a wholesaler, but the law provides that a wholesaler may become a "registered trader". A registered trader is given a reference number and he may send to the manufacturer a purchase tax letter which indicates that ho undertakes the responsibility for collecting the purchase tax and that he wishes to buy, from the manufacturer, free of tax. He would then collect the tax when he sold the goods to a retailer, or to an unregistered wholesaler. An unregistered trader, on the other hand, has to buy from his suppliers at a price which includes purchase tax.
A registered trader is required to keep a purchase tax day book, in which he must keep records of transactions in which purchase tax is due from him, showing the amount of tax due. The level of tax is altered from time to time, but at all material times it was levied on different commodities at rates varying between 10 per cent and 45 per cent. Every quarter, a registered trader had to submit a purchase tax return showing the amount of tax due, and had to pay the tax.
Harz, Harry Lee & Co., and the other associated companies, dealt largely with branded toilet goods, and to a lesser extent in toys. Harz himself was not registered, so that purchasers from him were entitled to assume that he had paid the purchase tax on the goods when he himself had bought them. Neither were the associated companies registered.
Harry Lee & Co....
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