International Language Centre Ltd v Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judgment Date | 08 March 1983 |
| Date | 08 March 1983 |
| Court | Queen's Bench Division |
Queen's Bench Division.
Mr. R. Cordara (instructed by Messrs. Baker, Freeman & Co.) for the taxpayer.
Mr. Simon D. Brown (instructed by the Solicitor to H.M. Customs and Excise) for the Crown.
Before: Woolf J.
Value added tax - Assessment covering more than one period - Time limits for making of assessments - Assessment out of time in respect of some periods - Whether whole assessment voided - Whether part of assessment made within time limits valid - section 31Finance Act 1972, sec. 31.
This was an appeal by the taxpayer company from a decision of the VAT Tribunal that, insofar as an assessment on the taxpayer was not made outside the specified time limits, it should be upheld.
The disputed assessment, dated 12 January 1982, related to the period from 1 December 1978 to 28 February 1981. section 31Section 31 of the Finance Act 1972 gives the Commissioners of Customs and Excise a wide power to assess for VAT, but provides that no such assessment may be made later than two years after the end of the prescribed accounting period which is included in the notice of assessment or later than one year after evidence of the facts justifying the assessment comes to the knowledge of the Commissioners. The assessment in dispute was issued out of time in respect of some of the periods included therein and the company claimed that it was wholly void.
The assessment notice showed a total sum due of £41,966. In the column for reasons were the words "See attached schedule". That schedule, headed basis of assessment for the periods from 1 December 1978 to 28 February 1981, set out the tax declared for tuition courses provided by the company between specified dates and the tax assessed for those dates. These were followed by various adjustments, sundry items and credits.
Before the court, the company contended that the tribunal's decision was incorrect as, in upholding the assessment in respect of the sum which was not outside the time limits specified in section 32 subsec-or-para (2)sec. 32(2), the tribunal had, in effect, rewritten the assessment in a way in which it was not originally written by the Commissioners. It was further argued that the proper approach was to regard the assessment as one global assessment covering the whole period for the sum of £41,966.
The Crown claimed that it was quite proper to regard the assessment as covering three different individual matters for assessment, taking as one separate matter the £1,406.34 which the tribunal had upheld as having been assessed within the statutory time limit.
Held, appeal allowed.
1. The notice of assessment and the attached schedule should be construed as being one single assessment amounting to no more and no less than an assessment in the sum of £41,966.
2. A taxpayer is entitled to be informed in reasonably clear terms of how the amount assessed is made up and the schedule did no more than that.
3. The reasoning of the tribunal would have been correct had the assessment been made up of three distinct parts, but that reasoning was not appropriate where the proper course was to regard it as a single assessment of a global nature.
4. Where a global assessment has been made the Commissioners must comply with the time limits in section 31 subsec-or-para (2)sec. 31(2)(b) in respect of the whole of the sum included in that assessment.
Woolf J.: This is an appeal under section 13sec. 13 of the Tribunals and Inquiries Act in respect of a decision of the Value Added Tax Tribunal on an appeal by the International Language Centres Limited in respect of an assessment for value added tax which was served upon them, dated 12 January 1982. The contention of the appellant before the tribunal, who is also the appellant before me, was that that assessment was out of time and therefore wholly bad.
The power to assess is contained in section 31sec. 31of the Finance Act 1972, which provides:
Where a taxable person has failed to make any returns required under this Part of this Act or to keep any documents and afford the facilities necessary to verify such returns or where it appears to the Commissioners that such returns are incomplete or incorrect they may assess the amount of tax due from him to the best of their judgment and notify it to him.
section 31 subsec-or-para (2)Sub-section (2) r...
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