Court of Appeal
| Published date | 01 June 2002 |
| DOI | 10.1177/002201830206600303 |
| Date | 01 June 2002 |
| Subject Matter | Court of Appeal |
Court
of
Appeal
Tax Evasion: Civil and Criminal Consequences
Han
v
Commissioners
of
Customs
and
Excise
[2001] 1 WLR
2253
The three sets of shopkeepers
who
were the respondents to the appeals
reported
under
the above title were considered by the Commissioners of
Customs
and
Excise
to
be liable for the
payment
of tax
and
to be fully
aware of
that
liability,
but
to have adopted adishonest course of conduct
for the purpose of deliberately evading the payment which they
knew
to
be due. In two cases
(Han
v
Commissioners
of
Customs
and
Excise
and
Martins
v
Commissioners
of
Customs
and
Excise)
the respondents were said
to be in breach of s. 60( 1) of the
VAT
Act 1994 in respect of fish
and
chip
shops and takeaways, while the third respondent was in breach of
s. 8(1) of the Finance Act 1994 in respect of betting duty due as a result
of his activities in his off-course betting shop. In each case, the Commis-
sioners' officers complained
that
the tradesmen
had
failed to make a full
documentary
return
to
the Commissioners of the turnover of the busi-
ness done in their shops.
In such circumstances, the Commissioners have an option as
to
how
they will proceed. They may certify the
amount
of tax due
and
the
amount
of the monetary penalty they impose. Although
that
penalty
may be of a very substantial
amount
and is admittedly for the purposes
of
punishment
for the dishonesty
and
to deter
them
and
the public at
large from evasion of taxes which are due, the penalty is described as a
'civil penalty'
and
is recoverable as a debt. The Commissioners' second
option is to treat the conduct as a criminal offence
and
to
leave the police
and
the prosecuting authorities to follow the appropriate criminal proce-
dure (which may end in the imprisonment of the accused). In each of
the three present cases, the Commissioners certified the tax
and
the
penalty,
that
is, they opted for the civil route.
The matter was brought before the
VAT
and
Duties Tribunal.
where
the chairman was asked by all three taxpayers to give a ruling on a
preliminary point. They argued that, although the penalty certified by
the Commissioners was ostensibly a 'civil penalty', the issue in
the
proceedings before the tribunal was in reality for
'the
determination
...
of a criminal charge' in the sense in which those words are used in the
European Convention on Human Rights, which the respondents
claimed to be 'part' of English law, since they were set
out
in
the
Schedule to the Human Rights Act 1998. They eventually claimed
that
the prosecutions were in breach of a
number
of the
'minimum
rights'
guaranteed by Article 6(1) of the Convention. The chairman ruled in
favour of the taxpayers, which ruling was certified by the tribunal. The
Commissioners appealed from
that
decision,
and
Aldous LJ granted
leave to go straight to the Court of Appeal.
219
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