North Wiltshire District Council v HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judgment Date | 22 September 2010 |
| Neutral Citation | [2010] UKFTT 449 (TC) |
| Date | 22 September 2010 |
| Court | First Tier Tribunal (Tax Chamber) |
[2011] TC 00714
[2010] UKFTT 449 (TC)
John Walters QC (Chairman), MRS. E. Bridge (Member)
The Appellant did not appear and was not represented
Sarabjit Singh, Counsel, instructed by HMRC Solicitor's Office, for the Respondents
Application for extension of time to appeal - 14 and 21 months out of time - Whether an obligation on the tribunal to consider the criteria in r. 3.9(1) of the Civil Procedure Rules (CPR) - The appellant applied for an extension of time to appeal decisions of the commissioners that VAT said to have been overpaid on supplies of off-street parking was, in fact, properly due and payable - The appellant submitted that the tribunal's decision would have a direct impact on the residents of Wiltshire because it would affect the council's finances - Further, the appellant submitted that its failure to lodge an appeal in time was unintentional and that the council did not employ any VAT specialists or experts to provide advice on making such appeal - It considered that because of the terms of the correspondence received from the commissioners, the council was not aware that it was not following the correct appeals procedure - As soon as it discovered the oversight, action was taken to remedy the situation - The appellant added that if the application to appeal out of time was allowed then, subject to the final decision in the test case R & C Commrs v Isle of Wight Council[2009] BVC 684, any financial gain would flow directly into local government services in Wiltshire - The commissioners submitted that the 30-day time-limit for lodging an appeal was laid down by statute in Value Added Tax Act 1994 section 83G subsec-or-para 1s. 83G(1) of the Value Added Tax Act 1994 - They referred the tribunal to r. 2(1) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), which established the overriding objective of enabling the tribunal to deal with cases fairly and justly, and to r. 2(2) which expanded this concept to include avoiding delay so far is was compatible with proper consideration of the issues - The appellant's submissions focused on the criteria set out under the heading "Relief from sanctions" in CPR r. 3.9(1), but the commissioners submitted that the tribunal should not consider itself obliged to apply these criteria when deciding whether to grant an extension of time to appeal - In any event, contended the commissioners, the appellant had served no evidence in support of its case to justify an out of time appeal and the application should be refused - Held, that the commissioners were correct in their submission that the tribunal was not obliged to consider CPR r. 3.9(1) when deciding whether to grant an extension of time to appeal - The tribunal noted, however, that exercising its discretion to give effect to the overriding objective in r. 2(1) would often in involve consideration of some of the criteria in CPR r. 3.9(1) - In the opinion of the tribunal, the appeals in this case had sufficiently good prospects of success to make refusal to entertain them a real and practical loss or injury to the appellant - The tribunal was required to balance the appellant's culpability in delaying its appeal and the prejudice to the commissioners in terms of the public interest in good administration and legal certainty against the loss and injury to be suffered by the appellant if the application were refused - In the tribunal's judgment, the loss and injury which would be suffered by the appellant outweighed factors pointing the other way - Accordingly, an extension of time would be granted for the appeals to be lodged out of time - Appellant's application allowed.
Following a hearing on 19 April 2010, the Tribunal directed (by a direction released on 26 April 2010) that Wiltshire Council's ["the Appellant's"] application for an extension of time in which to appeal against the Respondent Commissioners' ["HMRC's"] decisions dated 14 December 2007 and 7 July 2008 was to be adjourned to a date to be fixed. The adjourned hearing was listed to take place on 12 July 2010, and HMRC appeared by Counsel (Mr. Sarabjit Singh). There was no appearance by or on behalf of the Appellant, but the Tribunal received written submissions from the Appellant on 9 July 2010. We have taken these written submissions into account as will appear below. Pursuant to rule 33 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 ("the Rules") the Tribunal decided to proceed with the hearing on 12 July 2010, being satisfied that the Appellant had been notified of the hearing and considering that it was in the interests of justice to proceed with the hearing. At the hearing, the Tribunal reserved its decision on the application for an extension of time to appeal. After consideration, we make the following Directions for the Reasons which appear below.
1. The Appellant's application for an extension of time in which to appeal against the decisions of HMRC contained respectively in HMRC's letters dated 14 December 2007 and 7 July 2008 is GRANTED. Time will be extended to 2 October 2009, with the consequence that the notice of appeal lodged on that date is deemed to have been lodged in time in relation to the appeals against those decisions.
2. The appeals are hereby allocated to the category of Complex cases.
3. The time for the sending or delivery of HMRC's statement of case in relation to the appeals is hereby EXTENDED to 17 December 2010.
4. Each party has liberty to apply to the Tribunal for further directions.
1. On 29 June 2005, 7 August 2006 and 2 October 2007, the former North Wiltshire District Council (now abolished and replaced by Wiltshire Council, the Appellant) made voluntary disclosures claiming £713,033.35, in total, alleged to have been overpaid as VAT on the Appellant's supplies of off-street car parking.
2. On 14 December 2007, HMRC informed the former North Wiltshire District Council ["the Council"] that they considered that no overpayment of VAT had occurred because the Council's supplies were properly taxable and informed the Council that it could request a reconsideration of the decision by HMRC or appeal to the VAT and Duties Tribunal within 30 days.
3. The Council made no request for reconsideration and did not appeal to the Tribunal within 30 days (or at all) but on 25 June 2008 submitted a further voluntary disclosure claiming £241,330 alleged to have been overpaid as VAT on the same basis.
4. On 7 July 2008, HMRC informed the Council of their refusal to meet the claim for the same reasons as those given on 14 December 2007 (and in identical terms) and again informed the Council that it could request a reconsideration of the decision by HMRC or appeal to the Tribunal within 30 days.
5. Again the Council made no request for reconsideration and did not appeal to the Tribunal within 30 days (or at all).
6. The Council, along with the other district councils in Wiltshire, and the Wiltshire County Council, were replaced by the Wiltshire Council (the Appellant - a unitary authority) on 1 April 2009.
7. On 10 June 2009 the Appellant submitted a further voluntary disclosure claiming £233,860.55 allegedly overpaid as VAT on the same basis as the earlier claims. This claim related to the period 1 April 2008 to 31 March 2009.
8. On 24 July 2009, HMRC informed the Appellant of their refusal to meet the claim for the same reasons as those given on 14 December 2007.
9. On 2 October 2009, the Appellant lodged a notice of appeal with the Tribunal in which it sought to appeal out of time against HMRC's decisions dated 14 December 2007, 7 July 2008 and 24 July 2009. On 2 November 2009, HMRC objected to the Appellant's application for an extension of time in which to appeal.
10. At the hearing on 19 April 2010 at which the Appellant did not appear and was not represented, HMRC did not oppose the grant by the Tribunal of an extension of time in which to appeal against the latest decision, that dated 24 July 2009. In the directions released on 26 April 2010, the Tribunal extended the time for appealing HMRC's decision dated 24 July 2009 with the effect that the Appellant's Notice of Appeal against that decision was deemed to have been served in time.
11. However, the Tribunal made no decision at or following the hearing on 19 April 2010 in relation to the Appellant's applications for extension of time in which to appeal against HMRC's earlier decisions (those dated 14 December 2007 and 7 July 2008) and adjourned those applications to be heard on a date to be fixed. The Tribunal directed that at the adjourned hearing it would require the parties to address in their submissions the criteria (a) to (i) set out under the heading "Relief from sanctions" in CPR 3.9(1), following Sayers v Clarke Walker [2002] EWCA Civ 645 at [21]; [2002] 1 WLR 3095 and referred to at CPR note 52.6.2.
12. The adjourned hearing was fixed for 12 July 2010 and proceeded as recorded above.
13. In accordance with the Tribunal's direction, the Appellant's written submissions focussed on the criteria set out under the heading "Relief from sanctions" in CPR 3.9(1).
14. Under the heading "(a) the interests of the administration of justice", the Appellant notes that any decision made by the Tribunal will have a direct impact on the residents of Wiltshire, because it will affect the finances of the Appellant. The Appellant states that the North Wiltshire District Council "did not understand the legal procedures required following the submission of its voluntary disclosures" and submits that a refusal of an extension of time to appeal would penalise the Appellant for the Council's failure to "[recognise] due process".
15. Under the heading "(b) whether the application for relief has been made promptly", the Appellant accepts that its...
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