Marks & Spencer Plc v Commissioners of Customs and Excise (No 2); Marks & Spencer Plc v Commissioners of Customs and Excise (Appeal: Jurisdiction of Tribunal)
| Jurisdiction | UK Non-devolved |
| Judgment Date | 01 January 1998 |
| Date | 01 January 1998 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
VAT Tribunal
VAT Tribunal
The following cases were referred to in the decision:
ACF Chemiefarma NV v EC Commission (Case 41/69) [1970] ECR 661
Amministrazione delle Finanze dello Stato v Simmenthal SpA(Case 106/77) [1978] ECR 629
Argos Distributors Ltd v C & E Commrs VAT(Case C-288/94) [1997] BVC 64
Barra v Belgian State (Case 309/85) [1988] ECR 355
BP Supergas Anonimas Etairia Geniki Emporiki-Viomichaniki kai Antiprossopeion v Hellenic Republic (Case C-62/93) [1995] ECR I-1883; [1995] 2 CEC 359
C & E Commrs v Arnold VAT[1996] BVC 464
"Defrenne II") (Case 43/75) [1976] ECR 455
Deville v Administration des Impôts (Case 240/87) [1988] ECR 3513; [1990] 2 CEC 689
IR Commrs v Joiner UNK[1975] 3 All ER 1050
Marks & Spencer plc VAT[1997] V & DR 85; [1997] BVC 2243
R v Secretary of State for Employment, ex parte Equal Opportunities Commission ELR[1995] 1 AC 1
Tribunals - Jurisdiction - Overpaid tax - Three-year capping provisions applied - Whether tribunal had jurisdiction to declare relevant domestic legislation ineffective - Whether jurisdiction to control administration of law by Customs - Whether jurisdiction to consider claim to enforceable Community rights ranking in priority to domestic provisions - Value Added Tax Act 1994 section 80 subsec-or-para (4) section 83Value Added Tax Act 1994, ss. 80(4) and 83(t); European Communities Act 1972, s. 2(1). Appeals - Appealable matter - Whether decision of commissioners necessary to give right of appeal - Letter informing appellant that three-year capping provisions applied to claim - Whether amounted to "decision" - Value Added Tax Act 1994 section 83Value Added Tax Act 1994, s. 83.
The issues were: (1) whether there was an appealable matter falling within Value Added Tax Act 1994, Value Added Tax Act 1994 section 83s. 83 which gave rise to a right of appeal to the tribunal and, if there was, (2) whether the tribunal had jurisdiction to give effect to any enforceable community rights which the appellant could substantiate in resolving the claim under Value Added Tax Act 1994, Value Added Tax Act 1994 section 80s. 80.
The commissioners had conceded ten per cent of a £3.5m claim for overpaid tax on the basis that teacakes had been incorrectly treated by the appellant as standard-rated since 1973. Of that ten per cent, Customs were prepared to repay the amount which fell within the three-year period permitted under the capping provisions. Similarly, they invoked the three-year cap on the appellant's claim for overpaid tax on gift vouchers, following Argos Distributors Ltd v C & E Commrs VAT(Case C-288/94) [1997] BVC 64.
The tribunal considered as a preliminary issue whether it had jurisdiction to entertain an appeal against the application by Customs of the capping provisions.
The commissioners contended that in informing the appellant of the effect of Value Added Tax Act 1994 section 80 subsec-or-para (4)s. 80(4), which stated that "The Commissioners shall not be liable, on a claim made under this section, to repay any amount paid to them more than three years after the making of the claim", they had not made a "decision" so as to give rise to a right of appeal underValue Added Tax Act 1994 section 83s. 83. They further contended that, even if the matter did fall within Value Added Tax Act 1994 section 83s. 83(t) as being "a claim for the repayment of an amount under Value Added Tax Act 1994 section 80section 80", Value Added Tax Act 1994 section 80 subsec-or-para (4)s. 80(4) absolutely stopped the recovery of the element of the claim which fell outside the three-year period, since it had retrospective effect.
The appellant pointed out that Value Added Tax Act 1994 section 84s. 84 made no mention of the word "decision" and that, in any event, the letter invoking the cap constituted a decision. It conceded that taken in isolation UK law gave no right to the repayment of amounts paid more than three years before the claim, but it argued that enactingValue Added Tax Act 1994 section 80 subsec-or-para (4)s. 80(4) violated an established principle of Community law by retrospectively seeking to deprive traders of their acquired rights. The commissioners had overstepped their authority by acting in a discriminatory manner, favouring opticians and mail-order businesses in respect of which they had not invoked the cap.
Held, matter to proceed to a substantive hearing:
1. Section 83 consolidated s. 40(1), Value Added Tax Act 1983, which had provided that an appeal lay "against the decision of the commissioners" under the various headings set out. Consequently, there had to be a decision by the commissioners for a right of appeal to exist.
2. On the basis that a decision was "an official act by the Customs authorities pertaining to VAT statutory provisions that gives a ruling in a particular case and has legal effect upon the person at whom it was directed", Customs' letters intimating that the capping provisions applied contained decisions giving rise to a right of appeal.
3. The tribunal did not have jurisdiction to declare ineffective an Act of Parliament, but had to proceed on the basis thatValue Added Tax Act 1994 section 80s. 80 was good law.
4. Neither did its jurisdiction extend to controlling the manner in which the commissioners had administered the law. It was a creature of statute and it had no supervisory jurisdiction in respect of claims under Value Added Tax Act 1994 section 80s. 80.The tribunal could only rule on the legality of the commissioners' refusal of the claim for repayment.
5. While there was nothing in Directive 77/388, the sixth VAT directive, that had any direct application to claims for a refund of VAT unduly paid by taxable persons, where a claimant could successfully assert enforceable Community rights the tribunal must give effect to these. The appellant had identified potentially enforceable Community rights of which the commissioners were seeking retrospectively to deprive them and this was an issue within the tribunal's jurisdiction. The matter was to proceed to a substantive hearing.
[The tribunal set out the facts summarised above and continued as follows.]
…
Marks & Spencer say that Value Added Tax Act 1994 section 83s. 83 should be read as written. On this basis no decision is required; it is enough if, as here, the matter in dispute falls withinValue Added Tax Act 1994 section 83s. 83(t). In any event, they say, the letters of 10 March 1997 and 16 October 1996 are "decisions" of the commissioners in the relevant sense.
The Value Added Tax Act 1994 ['the 1994 Act'] is a consolidation act and the presumption with such acts is that no change in the law is intended: see for example Lord Diplock in IR Commrs v Joiner UNK[1975] 3 All ER 1050 at p. 1059. The presumption must therefore be that, as with s. 40(1) of theValue Added Tax Act 1983, a decision is a pre-requisite to an appeal. The presumption is confirmed by related provisions elsewhere in the 1994 Act. For example, Value Added Tax Act 1994 section 84 subsec-or-para (3)s. 84(3) refers to a decision. And the same section retains the provisions of Value Added Tax Act 1994 section 84 subsec-or-para (10)subs. (10) which enable the tribunal to entertain an appeal against a "decision" of the commissioners even where that decision depends on a "prior decision" of the commissioners. Accordingly, I interpret Value Added Tax Act 1994 section 83s. 83 as requiring that there be a decision of the commissioners as the necessary pre-requisite to our jurisdiction.
Was the letter of 10 March 1997 a "decision" for the purposes ofValue Added Tax Act 1994 section 83s. 83? Mr Paul Lasok argues the contents of that letter (and of a letter of 16 October 1966 relating to the bottled water claim) merely confirmed the applicability of...
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