Farm Facilities (Fork Lift) Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 30 April 1987 |
| Date | 30 April 1987 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
GUS Merchandise Corporation Ltd. (1978) VATTR 28
Kenmir Ltd. v. Frizzell & Ors. UNK[1968] 1 All E.R. 414
Melon & Ors. v. Hector Powe Ltd. UNK[1981] 1 All E.R. 313
Normal Motor Factors Ltd. VAT(1978) 1 BVC 1068; (1978) VATTR 20
Assessment - Whether sale of assets amounted to transfer of part of a business as a going concern - Whether Commissioners estopped from obtaining payment of input tax wrongly claimed by appellant - Whether Tribunals have jurisdiction to review applicability of undertaking given by Treasury Minister to House of Commons -Value Added Tax (Special Provisions) Order 1981, Art. 12.
The taxpayer was established as a wholly-owned subsidiary of a corporate business dealing with fork lift trucks and other motor vehicles. Upon the creation of the company, three invoices were issued to it in respect of the sale of assets comprising plant, stock of oils and gas, and goodwill. Upon the sale of the assets the taxpayer deducted as input tax the sum of £20,338.61 which formed the subject of the assessment. Twenty-two days after the repayment of tax was made to the appellant the parent company went into receivership and, although accounting for the equivalent amount of output tax, made no payment of it to the Commissioners. A director of the taxpayer submitted a tender for the purchase of the shares of the company and some assets of the parent company in satisfaction of moneys owing by the former to the latter which tender was accepted by the Receiver in satisfaction of the outstanding debt.
For the taxpayer it was contended that as it had no actual premises from which it could trade, and was not permitted under the terms of a lease to occupy the premises of the parent company, and since it could not obtain the materials essential for the continuation of its business, had no management or administration, and was insolvent, it was not capable of separate operation from that of the parent company so that the terms of Art. 12 of the Value Added Tax (Special Provisions) Order 1981 were not satisfied. It further contended that the tender submitted to the Receiver for the shares and assets of the companies was on the basis that there was no liability to the Commissioners to repay the input tax paid by the Commissioners to the appellant company and had thereby altered his position to his subsequent detriment. The Commissioners had initially accepted that the tax had been properly deducted and were now estopped from raising an assessment in relation to the money.
For the Commissioners it was contended that the part of the business relating to the transferred assets continued to be carried on at the same premises with the same customers and in the same trading style as theretobefore, it was capable of separate operation and came within the provisions of the Order. It was further contended that when the input tax was repaid to the taxpayer there was no representation that the amount thereof had been fully and finally approved, that the Commissioners could not be estopped from recovering tax imposed by mandatory provisions in an Act of Parliament by any act, word or deed of their officers; that no estoppel lay against the Crown in such circumstances; that the payment was not an unequivocal ruling entitling the taxpayer to rely on a reply made by a Treasury Minister in Parliament and that the Tribunal had no jurisidiction in relation to such Parliamentary statement.
Held, dismissing the taxpayer's appeal:
1. In substance the three invoices issued to the taxpayer evidenced a sale to it of assets forming part of a business as a going concern. Before the transfer a division of the parent company carried out repairs to fork lift trucks and sold fuel and gas and after the transfer the subsidiary carried on the same activities without a break. Consequently, no tax was chargeable on the...
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