NOTES OF CASES
| Date | 01 July 1960 |
| DOI | http://doi.org/10.1111/j.1468-2230.1960.tb00617.x |
| Published date | 01 July 1960 |
NOTES
OF
CASES
THE
HINCHY
CASE
THE problem which arose in
I.
R.
C.
v.
Hinchy’
is not uncommon
today; what degree of ambiguity must
a
court discover in a statu-
tory provision, whose normal meaning produces an apparently
absurd result, before that court can give the provision another and
more reasonable meaning? Under section
25
(8)
of
the Income Tax
Act,
1952,
a person who neglects to deliver a true and correct return
which he is required to deliver is liable to a penalty
of
€20
and
“treble the tax which he ought to be charged under this Act.’’
The Crown contended that the words quoted meant three times the
tax on his income for which the offender was assessed in the relevant
tax year. Whilst this construction leads to a not unreasonable
result in the case where a man makes
no
return and thus manages
to avoid tax
on
the whole of his income, the penalty is inappropriate
in
a
case where the return relates to some other person’s income,
e.g.,
when the secretary
of
a company fails to make
a
return which
he
is
liable to make in respect of the company’s affairs.
As
in
1910
the House of Lords held that the predecessor of this
subsection was apt to cover
a
case where a man makes a return but
it
is inaccurate, the penalty
is
even more inappropriate in the case
of a man with
a
large income, who understates
it
by a few pounds.
Even with comparatively modest figures such as existed in
Mr.
Hinchy’s case, the penalty can be wholly unreasonable in relation
to the offence.
Mr.
Hinchy was a salaried employee of the Crown
and in addition he and
his
wife had some bank interest.
For
1951-52
Mr.
Hinchy made an income tax return in which he under-
stated that bank interest by some
230.
His code number for
P.A.Y.E. purposes was calculated on the basis that he had
221
untaxed interest. At the time he was never
assessed at all as both he and the Revenue were satisfied with the
deductions under P.A.Y.E. When the true facts came to light the
Revenue made formal assessments on him, both in respect
of
his
salary and the previously undisclosed interest, and the total tax
assessed on him for the year in question was
2139 11s.
6d., of which
€14
5s.
represented tax on the extra interest.
In these circumstances the Revenue brought an action in the
High Court claiming a penalty
of
E438,
i.e.,
E20
plus three times
2189 11s.
6d., a penalty which was more than thirty times the tax
on the undisclosed income. Throughout the case the Crown made
In
fact
he had
251.
[1960]
2
W.L.R.
448
(H.L.);
[1960] 1
All
E.R.
505;
reversing
[1959]
2
Q.B.
357
(C.A.),
who
in turn varied Diplock
J.
[1959] 1
Q.B.
327.
Att.-Gelz.
v.
Till
[1910]
A.C.
50.
425
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