Commissioners of Customs and Excise v Young
| Jurisdiction | Scotland |
| Judgment Date | 09 March 1993 |
| Date | 09 March 1993 |
| Court | Court of Session (Inner House - First Division) |
Court of Session (Inner House).
Lord President Hope, Lord Allanbridge and Lord Cullen.
C J Harris QC (instructed by Shepherd & Wedderburn WS for Customs and Excise) for the Crown.
Colin Tyre (instructed by W & J Burness WS) for the taxpayer.
The following cases were referred to in the judgment:
Gault v IR Commrs TAX[1990] BTC 442
Hodge v British Coal Corporation 1992 SLT 484
McKerron (R & D) Ltd v IR Commrs TAX(1978) 53 TC 28
Value added tax - Appeal by Customs - Customs granted extension of time to lodge documents - Direction by tribunal chairman that documents be lodged by specified date - Direction not complied with by Customs - Tribunal exercised discretion to allow appeal as direction had not been complied with - Whether discretion properly exercised - SI 1986/590 section 19 subsec-or-para (4)Value Added Tax Tribunals Rules 1986 (SI 1986/590), r. 19(4) as amended.
This was an appeal by Customs from a decision of the VAT tribunal which allowed a taxpayer's appeal without considering the merits because Customs had failed to comply with a procedural direction issued by the tribunal under the SI 1986/590 section 19 subsec-or-para (4)Value Added Tax Tribunals Rules 1986 (SI 1986/590), r. 19(4).
Having granted an extension of time to Customs for lodging their statement of case and list of documents, the tribunal chairman issued a direction under SI 1986/590 section 19 subsec-or-para (1)r. 19(1) of the 1986 rules that the documents were to be lodged by 26 June 1992.
The direction was not complied with because the officer responsible for the conduct of the appeal received the documents only on 23 June and dispatched them on 26 June, too late to reach Edinburgh in time to comply with the direction. However, she inadvertently put them in the London and not the Edinburgh internal mail distribution box. The mistake did not come to light until over a week later and the documents were received in Edinburgh on 8 July.
At a hearing before the tribunal the taxpayer took the preliminary point that, as there had been a failure to comply with the direction, the tribunal should exercise its power under SI 1986/590 section 19 subsec-or-para (4)r. 19(4) to allow the appeal. The tribunal considered the circumstances and said that once a direction was given, it expected the direction to be complied with. The taxpayer's appeal was allowed and Customs appealed to the Court of Session.
The question for the Court of Session was whether the tribunal had exercised its discretion unreasonably in deciding, in the light of the circumstances, to allow the appeal.
Customs submitted that since the failure to comply with the direction was not wilful but merely inadvertent, and that the failure had caused no prejudice to the taxpayer, the tribunal should have exercised its discretion under SI 1986/590 section 19 subsec-or-para (5)r. 19(5) to waive the failure.
Held, dismissing Customs' appeal:
The tribunal had emphasised that, having given a direction, it expected it to be complied with. Had that been the sole reason for the decision, the tribunal's discretion might have been exercised unreasonably because the facts and circumstances of the case had not been properly considered. But the tribunal made it clear that non-compliance might have been excused had there been compelling reasons to justify taking that course.
This is an appeal under section 13sec. 13 of the Tribunals and Inquiries Act 1971 against a decision of the VAT tribunal sitting at Edinburgh. The taxpayer, Colin Young, had appealed against the refusal by the Commissioners of Customs and Excise of his claim for a refund of VAT. They had given their reasons for their decision to refuse his claim in a letter dated 12 March 1992. He served his appeal on 26 March 1992, following which the commissioners, who were the respondents in that appeal, made an application for an extension of time to lodge their statement of case and list of documents. The taxpayer, who wished to have a speedy decision in the case, at first objected to the application for an extension of time. But he later withdrew his objection, and on 13 May 1992 the chairman of the tribunal issued a direction...
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