HM Revenue and Customs v Robertson'sElectrical Ltd [Court of Session Inner House Second Division]

JurisdictionScotland
Judgment Date11 November 2005
Neutral Citation[2005] CSIH 75
Date11 November 2005
CourtCourt of Session (Inner House)
Docket NumberNo 12

Court of Session Inner House Second Division

Lord Justice-Clerk (Gill), Lord Johnston, Lord Hardie

No 12
Commissioners for Her Majesty's Revenue and Customs
and
Robertson's Electrical Ltd

Revenue - Value Added Tax - Online sales - Tax point - Value Added Tax Act 1994 (cap 23), sec 6(2), (4) - Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334), reg 10

Section 6 of the Value Added Tax Act 1994 provides, inter alia:"(2) … a supply of goods shall be treated as taking place- (a) if the goods are to be removed, at the time of the removal; … (c) if the goods (being sent or taken on approval or sale or return or similar terms) are removed before it is known whether a supply will take place, at the time when it becomes certain that the supply has taken place or, if sooner, 12 months after the removal … (4) If, before the time applicable under subsection (2) or (3) above, the person making the supply issues a VAT invoice in respect of it or if, before the time applicable under subsection (2)(a) or (b) or (3) above, he receives a payment in respect of it, the supply shall, to the extent covered by the invoice or payment, be treated as taking place at the time the invoice is issued or the payment is received."

Regulation 10 of the Consumer Protection (Distance Selling) Regulations 2000 entitles the consumer to cancel the contract within the cancellation period without having to give a reason.

The respondent was a retailer of electrical goods, selling some of its goods online. When customers ordered goods online they paid for them by recording their credit or debit card details on the respondent's website. When the goods were sent to the customers, the respondent prepared an invoice, either at the date of dispatch or at a later date, but in all cases within seven days from the date of delivery. The appellants contended that the tax point was the date of payment. The respondent contended that the tax point was the date on which the customer ceased to be entitled under the 2000 Regulations to cancel the contract. The VAT and Duties Tribunal upheld the appeal of the respondent. The appellants appealed to the Court of Session.

Held that: (1) although the respondent's terms and conditions were subject to the statutory right of cancellation under reg 10, they nonetheless determined the nature of the transaction under which the goods were supplied, and the provisions relating to payment, ordering and returns all indicated that the nature of the online transaction was one of outright sale (paras 15, 17); (2) there was a taxable supply which took place on the making of the online payment (para 18); and appeal allowed.

Littlewoods Organisation plc v CCE [1997] V & DR 408 applied.

Robertson's Electrical ltd appealed to the Edinburgh VAT and Duties Tribunal in respect of a notice of assessment dated 16 February 2004 issued by the Commissioners of Customs and Excise. By decision dated 28 June 2004 and communicated to the Commissioners of Customs and Excise by post and received on 8 September 2004, the tribunal (JG Reid QC, FCI, Arb, Mr K Pritchard OBE, BL, WS and IR Welch CA, JP) upheld the appeal. The Commissioners of Customs and Excise appealed to the Court of Session.

Cases referred to:

Bryce v EhrmannUNK (1904) 7 F 5; (1904) 12 SLT 378

Littlewoods Organisation plc v CCE [1997] V & DR 408

Macdonald v WestrenUNK (1888) 15 R 988; 25 SLR 710

Staatssecretaris van Financiën v Shipping and Forwarding Enterprise Safe BVUNKUNK C-320/88; [1991] STC 627; [1990] ECR I-00285; [1993] 3 CMLR 547

The cause called before the Second Division, comprising the Lord Justice-Clerk (Gill), Lord Johnston and Lord Hardie, for a hearing on the summar roll, on 25 October 2005.

At advising, on 11 November 2005, the opinion of the Court was delivered by the Lord Justice-Clerk (Gill)-

Opinion of the...

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  • Commissioners Of Customs And Excise V. Robertsons Electrical Limited
    • United Kingdom
    • Court of Session
    • November 11, 2005
    ...--> SECOND DIVISION, INNER HOUSE, COURT OF SESSION Lord Justice Clerk Lord Johnston Lord Hardie [2005CSIH75] XA134/04 OPINION OF THE COURT delivered by THE LORD JUSTICE CLERK in APPEAL by THE COMMISSIONERS OF CUSTOMS & EXCISE Appellants; against ROBERTSON'S ELECTRICAL LIMITED Respondent: fr......

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