Commissioners of Customs and Excise v W Timms & Son (Builders) Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 16 March 1992 |
| Date | 16 March 1992 |
| Court | Queen's Bench Division |
Queen's Bench Division (Crown Office List).
Macpherson J.
Stephen Richards (instructed by the Solicitor for Customs and Excise) for the Crown.
The Company was not represented.
The following cases were referred to in the judgment:
Aikman (Customs & Excise) v White VAT(1985) 2 BVC 200,144
Costain (Richard) Ltd (No. 2) VAT(LON/87/724) No. 3076; (1988) 3 BVC 802
Hayman v Griffiths & Anor VAT(1987) 3 BVC 101
Lang v Devon General Ltd ICR[1987] ICR 4
Value added tax - Repayment supplement - Return claiming repayment of input tax posted in good time but not received by commissioners - Amount of input tax claimed paid on receipt of duplicate return - Repayment made more than 30 days after original return would have been delivered - Whether return "received" when posted or when actually received by commissioners - Whether taxpayer entitled to repayment supplement - Finance Act 1985 section 20 subsec-or-para (1)Finance Act 1985, sec. 20(1).
This was an appeal by the Commissioners of Customs and Excise from a decision of the VAT tribunal (LON/89/632) No. 4690;VAT(1990) 5 BVC 1330 that for the purpose of claiming repayment supplement under the Finance Act 1985 section 20 subsec-or-para (1)Finance Act 1985, sec. 20(1) it was enough that all outstanding returns had to been duly posted to the commissioners, even if they had not been actually delivered by the Post Office.
Most of the company's work involved zero-rated supplies. Its VAT returns which it rendered monthly usually recorded an amount of input tax in excess of the output tax so that a refund of the difference was claimed.
On 14 September 1987 the company secretary posted the return for the month of August, which was due to reach the commissioners by 30 September and obtained a certificate of posting. The return claimed repayment of £4,290.87 which had not been received by the time the company secretary came to complete the return for the month of September on 6 November, again claiming repayment. He posted that return on 10 November.
On 21 November he received a notice that repayment would be withheld until all outstanding returns had been received. He then discovered that the August return had not reached the commissioners. He completed a duplicate return and posted it on 2 December. The commissioners then paid the £4,290.87 within 14 days.
The return posted on 15 September was eventually received by the commissioners on 31 March 1988, but no explanation was given by the post office for the delay.
The company appealed to the VAT tribunal against the refusal by the commissioners of its claim for a repayment supplement under the Finance Act 1985, Finance Act 1985 section 20 subsec-or-para (1)sec. 20(1) on the ground that the repayment had not been made within 30 days of receipt of the August return.
The company argued that receipt of the August return by the commissioners should be taken to be the date on which it was posted which was within the time limit provided by the SI 1985/886 regulation 58Value Added Tax (General) Regulations 1985 (SI 1985/886), reg. 58(1). The commissioners maintained that the word "received" in Finance Act 1985 section 20 subsec-or-para (1)sec. 20(1)(b) meant what it said, i.e. the date when a return was received by the commissioners.
The VAT tribunal held that the commissioners had appointed the Post Office as their agent for the purpose of receiving a return on their behalf and accordingly a return was received by them when it was posted. The August return was posted within the time limit laid down and the company was entitled to a repayment supplement.
The issue was whether a VAT return was "received" within the meaning ofFinance Act 1985 section 20 subsec-or-para (1)sec. 20(1) of the 1985 Act when it was received by the commissioners or when it was posted.
Held, allowing the commissioners' appeal:
Finance Act 1985 section 20Section 20 had to be looked at with common sense and in the light of the 1985 legislation which removed the system of criminal liability and replaced it with financial penalties for late payment imposed on both the taxpayer and the commissioners. In the context of Finance Act 1985 section 20sec. 20 the return was received when it was delivered to the commissioners and had not reached them in the time laid down byFinance Act 1985 section 20sec. 20. That was in accordance with the ordinary meaning of the word and with common sense. (Aikman (Customs & Excise) v White TAX[1985] BTC 5069 and Hayman v Griffiths & Anor TAX[1987] BTC 5084 not followed.)
The Commissioners of Customs and Excise appealed against a decision of the VAT tribunal released on 12 March 1990. The grounds of the appeal were that the tribunal had erred:
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1. In law in holding:
(a) that the company was entitled to payment of a repayment supplement under Finance Act 1985 section 20sec. 20 of theFinance Act 1985;
(b) that notwithstanding that the relevant return was not received by the commissioners until 31 March 1988. It was received for the purposes of Finance Act 1985 section 20sec. 20 not later than 30 days after 30 September 1987;
(c) that the tribunal was bound by the decisions in Aikman (Customs & Excise) v White VAT(1985) 2 BVC 200,144 and Hayman v Griffiths & Anor VAT(1987) 3 BVC 101 to hold that the return had been received within the 30-day period;
(d) that the Post Office was the commissioners' agent to receive the return.
2. On the undisputed facts, the commissioners did not receive the relevant return within the period prescribed by the Finance Act1985, Finance Act 1985 section 20 subsec-or-para (1)sec. 20(1)(b).
Macpherson J: This is an appeal by the Commissioners of Customs and Excise against a decision of the VAT tribunal, in the person of his Honour Judge Medd QC, dated 12 March 1990. By that decision the tribunal allowed an appeal by W Timms & Sons (Builders) Ltd ("Timms") against a determination by the commissioners who had refused to pay to Timms a repayment supplement under the provisions ofFinance Act 1985 section 20sec. 20 of the Finance Act 1985.
The issue before the tribunal and on this appeal is whether a VAT return is "received by the commissioners" within the meaning ofFinance Act 1985 section 20 subsec-or-para (1)sec. 20(1) of the Finance Act 1985 at the time when it is actually received by the commissioners or at the time when it is posted. The...
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