R Atwal v Lewes Crown Court (First Defendant) HM Revenue & Customs (Second Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Blake,Lord Justice Beatson |
| Judgment Date | 13 March 2015 |
| Neutral Citation | [2015] EWHC 1783 (Admin),[2015] EWHC J0313-2 |
| Docket Number | CO/5397/2014 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 13 March 2015 |
[2015] EWHC 1783 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Lord Justice Beatson
Mr Justice Blake
CO/5397/2014
Mr A Jones QC (instructed by Rainder Hughes) appeared on behalf of the Claimant
The First Defendant did not appear and was not represented
Mr Little (instructed by Her Majesty's Revenue & Customs) appeared on behalf of the Second Defendant
This is the judgment of the court. On 3 October 2014, His Honour Tain, sitting in the Lewes Crown Court at Brighton, granted applications made on behalf of Her Majesty's Revenue & Customs (the second defendants in these proceedings) for a number of warrants to enter premises connected with the claimants and to search for items and seize them. The warrants were executed on 7 October 2014. On 21 November 2014, these 15 individual and corporate claimants issued these proceedings to challenge their validity. The second defendant lodged an acknowledgement of service on 16 December resisting each of the grounds of challenge and on 14 January 2015 McGowan J directed that there be an oral hearing of the permission application that was assigned to a Divisional Court to determine.
The information that was before Judge Tain consists of 48 pages and 131 paragraphs and there were also 11 appendices. It reveals that the second defendant is conducting an investigation into the activities of an organised crime group based in Essex that is suspected of engaging in excise alcohol diversion fraud: essentially, deliveries inward to the United Kingdom of alcohol on which no excise duty had been paid were diverted to people outside the bonded warehouse system by misuse of administrative registration codes issued to consignments. The second defendants suspected that a number of registered companies were involved in these activities. Glenn & Co (Essex) Limited is the 11th claimant in these proceedings. The late Shammi Atwal was a joint shareholder and director before his death in the course of a robbery at the premises in November 2013 of Glenn & Co. The first claimant is Davinder Atwal, brother of Shammi Atwal. The second claimant is the estate of Shammi Atwal, represented by his widow. Inn Drinks Limited and Inn Drinks (Europe) Limited had as their directors the brothers Dalvinder and Mandeep Dhillon in the case of the first company and Mandeep Dhillon in the case of the second. These brothers are the 6th and 7th claimants.
The information reveals part of the background to the application for a warrant. It seems on 18 April 2012 a vehicle with 25 pallets of beer was found at the premises of Glenn & Co and the load was seized on suspicion that excise duty in the sum of nearly £27,000 had been evaded. Between August 2013 and November 2013, suspect deliveries were monitored as being made to an industrial estate in Grays, Essex rented by another firm: River Cash & Carry. Manjit Verk, the 8th claimant, is assessed to be associated with this address through a motor vehicle driven by him. He is the husband of Kamaljit Verk, the 9th claimant, who is a director of River Cash & Carry and also operates a company called GS Wines.
Observations had been made on deliveries between Glenn & Co Limited, River Cash & Carry and another company, Gardner Shaw (London) Limited, Barking. Avtar Mann, the 5th claimant and Prasad Singal, the 10th claimant, are employees of Gardner Shaw, which trades from premises close to Glenn & Co. The current director of Gardner Shaw is Bernard Scotland, the 12th claimant. The leasehold of its trading address is held by a company of which Avtar Mann is a director and the late Mr Atwal a shareholder. Janesh Malik, the 13th claimant, has been observed driving a vehicle registered to Gardner Shaw. Observations have also been made of Davinder Atwal and Santokh Singh Bharj, the 3rd claimant, at Glenn & Co's premises in Essex. Mr Varj is the husband of the 4th claimant: Chitral Bharj.
A man called Mian Kufer Ghaffur resides at an address in E17. He is facing charges of conspiracy to corrupt a public official following a separate HMRC investigation. Davinder Atwal has been seen at Mr Ghaffur's house and it is suspected that their association is connected with money laundering the product of excise evasion. Cohen Trading Limited (formally known as Cohen Feinstein & Spiegler Beverage Consortium Limited) is a registered VAT trader with a turnover of around £34 millions predominantly in bonded goods. Its sole shareholder and director is Jamal Romeh, the 14th claimant, who resides in Cardiff. The company operates from residential premises and does not have a warehouse but its turnover increased by 482 per cent between 2011 and 2012 and it was making very substantial payments to other companies not registered for VAT as they should have been if their turnover had exceeded £81,000.
The investigation as described in the information was built up as a result of (1) investigation of the income tax and VAT records of the suspect individuals and companies; (2) examination of production orders from accounting records of companies believed to be connected with duty evasion; (3) observations on premises and vehicles; (4) stops of vehicles carrying goods on which excise is believed to have been evaded, and those are recorded in appendix 3 to the information; (5) evidence of other regulatory breaches or non-compliant behaviour with VAT status, including disclosure of documents summarised in appendix 6; (6) cash flow charts showing distribution of money, examples of which were given at appendices 7 and 8.
The information at paragraphs 58 to 91 details suspect transactions between some of the companies above and a number of other corporate entities said to have been used to receive and transmit money which is connected with the investigation. Paragraphs 92 to 103 analyse the income tax records of the individual claimants, of which either there are no records or details that appear inconsistent with the monies connected to these individuals through the companies. All those conclusions were drawn together and summarised at paragraph 123 of the information that reads as follows:
"The financial inquiries above have been conducted on the individual suspects and investigation as well as the companies in which they are involved. It is apparent from this that the suspects have benefited from their criminality. Comparisons have been made with bank accounts and declared income to HMRC, this, in turn, has been compared to observations in the general lifestyle of the suspects. It is clear that these aspects do not correlate and each suspect appears to be more 'cash rich' than they should be. It is my belief that this is the result of benefiting from the proceeds of their criminality and we are seeking evidence of cash deposits, bank accounts and items of value. It is possible that there will be large amounts of cash and items of value on the premises due to the nature of the crimes."
Appendix 9 to the information contained the relevant legal materials, including both the statutory scheme under which the warrants were requested and the then recent judgment of the Lord Chief Justice sitting in the Divisional Court in the case of Golfrate Property Management Ltd & Anor, R (On the Application Of) v The Crown Court At Southwark & Anor [2014] EWHC 840 (Admin), where helpful guidance is given both to the prosecutors making the application and judges deciding such applications.
The judge read the information that he had been supplied earlier. The information explained what was in the appendices. There was a short hearing, of which we have a transcript, at which he first summaries his understanding of what the evidence showed and sought assurance that his understandings were correct. He indicated that having gone through the paperwork everything was clear to him and he did not need anything else. He confirmed that the HMRC had reviewed everything that was needed to do so to comply with the guidance of the Lord Chief Justice. We understand that to be a reference to the requirement for a prosecutor to put his defence hat on when making such an application without notice. He did not give a reasoned judgment but he reached the conclusions that there were not merely grounds but abundant grounds to meet the requirements of section 352 of the Proceeds of Crime Act 2002 for a warrant in respect of a money laundering investigation. Having indicated this, there was a further exchange, in which the advocate then appearing for the HMRC, having drawn attention to Golfrate, and sought clarification that the various aspects of the statutory test had been applied.
A great many warrants were then issued as requested, each in the following terms:
"I am satisfied, having heard the application, that the requirements for issuing a search and seizure warrant under section 352(1) and (6)(b) of the Proceeds of Crime Act 2002 are fulfilled, specifically the conditions set out in sections 353(2), (5) and section 353(8), money laundering investigation, and section 353(9). I hereby authorise David Sheet Offices or any appropriate officer of Her Majesty's Revenue and Customs, UK Border Force, police or any other appropriate persons to enter on one occasion only and search premises [then the particular premises relevant to each warrant is set out] and seize and retain material that cannot be specified, which may include any documents or other things...
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