Commissioners of Customs and Excise v Le Rififi Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 27 July 1993 |
| Date | 27 July 1993 |
| Court | Queen's Bench Division |
Queen's Bench Division (Crown Office List).
Leonard J.
Nigel Pleming QC (instructed by the Solicitor for Customs and Excise) for the crown.
Edward Cohen (instructed by Tarlo Lyons) for the company.
The following cases were referred to in the judgment:
Don Pasquale (a firm) v C & E Commrs VAT(1990) 5 BVC 76
Grange (SJ) Ltd v C & E Commrs WLRVAT[1979] 1 WLR 239(1978) 1 BVC 210
International Language Centres Ltd v C & E Commrs VAT(1983) 1 BVC 545
Value added tax - Assessment - 24 accounting periods assessed by one document - First of the periods assessed outside time limit - Whether one global assessment which fell by virtue of first period being out of time or whether first period could be severed leaving the assessment for 23 periods operative - Finance Act 1985 section 22 subsec-or-para (1)Finance Act 1985, sec. 22(1)
This was an appeal from a decision of the VAT tribunal ([1992] BVC 646) that where VAT was assessed for 24 prescribed accounting periods by one document there was a single global assessment, and, if the first of the periods was outside the time limit for making assessments, the whole assessment was invalidated.
Control visits by Customs to the company's premises indicated that there were grounds for doubting accuracy of its gross takings declared in its VAT returns. Consequently in August 1989 Customs issued a notice of assessment based on an average per cent mark-up over the whole period covering 24 quarterly prescribed accounting periods. The assessment was made more than six years after the end of the first prescribed accounting period included in the assessment.
Before the VAT tribunal the company took a preliminary point that there was a single global assessment which was wholly invalidated by the fact that the first period was made outside the time limit imposed by theFinance Act 1985 section 22 subsec-or-para (1)Finance Act 1985, sec. 22(1).
It was argued for Customs that the notice of assessment was to be distinguished from the 24 separate assessments contained in it, and there was nothing to prevent them from withdrawing the first quarter assessed so that the whole of the remainder was validly made.
The tribunal regarded themselves as bound by a decision of the Court of Appeal where the form of the assessment was similar to that in the present case. They held that there was one assessment and that it was not capable of being severed. It was therefore not possible to withdraw the amount assessed by deleting the first quarter and to maintain that the assessment was valid as to the remaining quarters.
On appeal to the High Court Customs agreed that if there was indeed a single global assessment then it would be invalidated if any part of it was out of time. They claimed, however, that the present assessment should not be treated as a global assessment. If it was impossible to establish the facts in order to make separate assessments, Customs might make an assessment for a period of any length, but here it was possible to make separate assessments for the 24 periods which were set out separately within the notice of assessment and the one period which was out of time might be severed leaving the other 23 in operation.
The company contended that Customs in correspondence had referred to "an assessment" in the singular; that the calculation by reference to an average per cent mark-up over the whole period indicated a single assessment and the Court of Appeal had held, in a case decided on identical documents, that there was a single assessment.
Held, dismissing Customs' appeal:
There was only one global assessment. The assessment was invalidated by the presence of the out of time first entry. (Decision of the Court of Appeal in Don Pasquale (a firm) v C & E CommrsVAT(1990) 5 BVC 76 followed.)
Customs appealed against a decision of the VAT tribunal (chairman Mr Neil Elles). The grounds of the appeal were:
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