John Pimblett & Sons Ltd v Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judgment Date | 04 December 1987 |
| Date | 04 December 1987 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal.
Mr. Andrew Collins Q.C. and Mr. Guy Sankey (instructed by the Solicitor for Customs and Excise) for the Crown.
Mr. Robin Mathew (instructed by Barrow & Cook, St. Helens) for the company.
Before: Parker and Ralph Gibson L.JJ. and Caulfield J.
Value added tax - Zero-rating - Supply in the course of catering - Bakers selling pies freshly baked in shop - Whether baked for purpose of enabling pies to be consumed hot - Whether zero-rated - Value Added Tax Act 1983 schedule 5 group 1Value Added Tax Act 1983, Sch. 5, Grp. 1, Note (3)(b).
This was an appeal by the taxpayer company against the decision of Taylor J. ((1987) 3 BVC 3) that the sale of pies baked on shop premises, which might still be warm when sold, were zero-rated, by virtue of the Value Added Tax Act 1983 schedule 5 group 1Value Added Tax Act 1983, Sch. 5, Grp. 1.
The taxpayer company operated a central bakery and eight shops, one of which was attached to the bakery. In addition to bread and confectionery it produced three varieties of pies, meat and potato, steak and pasties. All were prepared at the central bakery. The fillings were cooked and then put in the pastry covers before being taken to the retail shops where they were baked to cook the pastry covering and to reheat the previously cooked filling. The pies were then cooled on racks where they remained warm for about an hour. There were two bakings, the first in the early morning and the other shortly before the lunch hour when demand was at its peak. The purpose of baking on the premises was to provide a pleasant smell and atmosphere, and to provide freshly baked pies. There was no provision for keeping the pies hot or for reheating them. Customers were divided between those who bought pies for immediate consumption and those who did not.
The company was assessed to VAT on the basis that a proportion of the pies sold were "supplies in the course of catering" within the exception from zero-rating for food in Value Added Tax Act 1983 schedule 5 group 1Sch. 5, Grp. 1 to the 1983 Act. Supplies in the course of catering included (by Value Added Tax Act 1983 schedule 5 group 1Grp. 1, Note (3)(b)), "any supply of hot food for consumption off [the] premises".
A VAT Tribunal dismissed the company's appeal (1985) 2 BVC 205,345 but its appeal to the High Court succeeded. The Crown appealed.
Before the Tribunal and Taylor J. it was common ground that a subjective test was to be applied. It had to be asked whether the company's purpose in selling the pies hot was to enable them to be consumed hot, or whether it was, as the company maintained, only to ensure that they were freshly baked. The judge held that the company's predominant purpose was to ensure that they were freshly baked.
In the Court of Appeal the Crown contended that the test was not subjective but objective, and, in any event, the subjective test was satisfied: it must have been part of the purpose of heating the pies to enable them to be consumed hot because the company was aware that that was what would happen.
Held, dismissing the Crown's appeal:
1. Note (3) required a subjective test as to the company's purpose to be applied.
2. Although some people would buy the pies to consume them hot, it could not be accepted that that was the company's purpose. That would involve reading the words into the note: "or which to the knowledge of the supplier would or might be [consumed hot]". There was no warrant for reading in words which were not there. Therefore the words of Note (3) did not cover the supply of pies by the company.
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...for Customs and Excise) for the Crown. The following cases were referred to in the judgment: John Pimblett & Sons Ltd v C & E Commrs VAT(1987) 3 BVC 161 Stewarts Supermarkets Ltd ENRVAT(BEL/93/60) No. 13,338; [1996] BVC 4120 Value added tax - Zero-rating - Supply in the course of catering -......
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Sub One Ltd (t/a Subway) v Revenue and Customs Commissioners
...to be consumed hot. The First-tier Tribunal (FTT), applying a subjective test in accordance with John Pimblett & Sons Ltd v C & E Commrs (1987) 3 BVC 161, concluded that the food had been heated for the purpose of enabling it to be consumed hot ([2010] UKFTT 487 (TC); [2011] TC 00747). The ......
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Pearl Chemist Ltd
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Sub One Limited T/A Subway v The Commissioners for HM Revenue and Customs
...interpretation of Note (3)(b)(i) was considered by the Court of Appeal in John Pimblett and Sons Ltd v Customs and Excise Commissioners [1988] STC 358. In that case the taxpayer operated a central bakery and eight retail shops. Among the products it made and sold were pies. The pies were ce......