Hallamshire Industrial Finance Trust Ltd v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Date | 1978 |
| Year | 1978 |
| Court | Chancery Division |
Revenue - Income tax - Assessment - Appeals to special commissioners - Amount of income assessed, but no assessment of amount of tax - “Assessment” - Whether special commissioners' decision final determination of appeals -
The taxpayer appealed to the special commissioners against certain assessments to profits tax and income tax for the years 1957–1958 to 1964–1965 inclusive, on the grounds that such assessments were “estimated, excessive and ought to be reduced.” The special commissioners gave a decision on certain issues on May 24, 1971, and a further decision on February 23, 1973, which purported to be a decision “determining the income tax and profits tax appeals.” The form of their determination was to state the amounts of income assessable to tax and not the amounts of tax payable. On March 12, 1973, revised assessments were sent to the taxpayer by the revenue in respect of each relevant year showing tax in excess of £400,000 to be payable. Apart from a minor mathematical error it was accepted that the revised assessments gave proper effect to the decision of the special commissioners. The taxpayer contended that the appeals had not been determined since the special commissioners, had not determined the amount of tax payable and that no tax was payable until such determination had been made by the special commissioners. The special commissioners took the view that they had finally determined the appeals on February 23, 1973, and refused to make any further determination unless both parties agreed or the court declared that they had not determined the appeals. The taxpayer therefore issued a writ on July 26, 1973, seeking, inter alia, a declaration that the special commissioners had not finally determined the appeals:—
Held, (1) that the references to “assessment” in sections 29 and 50 of the Taxes Management Act 1970 were references to assessments of the tax actually payable by the taxpayer, and not merely of the income assessable to tax and accordingly before the tax became payable, a taxpayer had to be told the amount of tax he had to pay (post, pp. 626H–627A).
(2) Dismissing the taxpayer's action, that section 31 (5) of the Taxes Management Act 1970 made it clear that it was not the task of the special commissioners on an appeal to make a general reassessment of the tax payable, that function having been transferred by the
The following case is referred to in the judgment:
Income Tax General Purposes Commissioners for City of London v. Gibbs [
The following additional cases were cited in argument:
B.P. Refinery (Kent) Ltd. v. Kent River Board [
Inland Revenue Commissioners v. Sneath [
Maclaine & Co. v. Eccott [
Ranaweera v. Ramachandran [
Rex v. Income Tax General Commissioners for Morleston & Litchurch Division (
ACTION
By a writ dated July 26, 1973, as re-amended, and a statement of claim, as re-re-amended pursuant to an order of Megarry V.-C. dated April 5, 1978, the taxpayer, Hallamshire Industrial Finance Trust Ltd., sought declarations and relief as follows. (1) A declaration that since the special commissioners, by their decision on February 23, 1973, on certain appeals by the taxpayer did not determine the amount of taxes payable by the taxpayer in respect of income tax for the years 1956–57 to 1964–1965 inclusive and profits tax for the periods within those years specified in the decisions, the appeals were not yet determined by the commissioners. (2) A declaration that the refusal by the inspector of taxes to request the special commissioners to determine the amount of taxes payable by the taxpayer in respect of income tax and profits tax for those years and periods respectively was not in accordance with the Taxes Management Act 1970. (3) A declaration that until after the determination had been made by the special commissioners and the appeals determined the taxpayer was not liable to pay income tax or profits tax for those years or periods. (4) A declaration that on any appeal to the general commissioners in respect of the loss claim made by the taxpayer for the year 1970 the commissioners were bound to determine the amount of the loss allowable and the amount (if any) of the tax repayable in consequence.
By a re-re-amended defence and counterclaim, the Commissioners of Inland Revenue counterclaimed for a declaration that the appeals were determined by the special commissioners on February 23, 1973, and that accordingly the tax became payable according to such determination.
The facts are stated in the judgment.
Jeremiah Harman Q.C., A. Park Q.C. and Robert Reid for the taxpayer.
Donald Rattee Q.C. and C. H. McCall for the Inland Revenue Commissioners.
October 25. BROWNE-WILKINSON J. read the following judgment. In this case the plaintiff company whom I will call “the taxpayer” is claiming a declaration that the special commissioners for income tax have not finally determined appeals by the taxpayer against assessments to income tax and profits tax for the years 1957–58 to 1964–65 inclusive. The special commissioners purported to determine such appeals by a decision given on February 23, 1973. The taxpayer's reason for seeking the declaration is that the revenue agrees that, pending final determination of the appeal to the special commissioners, the taxpayer is not bound to pay the tax: but once such appeal has been determined the tax becomes immediately payable notwithstanding a further appeal by the taxpayer to the High Court against the special commissioners' determination.
The relevant facts are all agreed and I can state them very shortly. In the absence of accounts furnished by the taxpayer, the revenue made estimated assessments against it, for the years I have mentioned, in respect of income tax and profits tax. The taxpayer appealed to the special commissioners: the notices of appeal are not before me but I am told that the grounds of appeal were that the assessments were “estimated, excessive and ought to be reduced.” After a very long hearing, on May 24, 1971, the special commissioners gave their decision in principle on certain issues. Other issues remained to be decided, which were the subject of a further hearing in 1972. Then on...
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