R v City of London Magistrates, ex parte Asif
| Jurisdiction | England & Wales |
| Judgment Date | 07 February 1996 |
| Date | 07 February 1996 |
| Court | Queen's Bench Division |
Queen's Bench Division (Divisional Court).
Kennedy LJ and Forbes J.
Michael Birnbaum QC and Andrew Colman (instructed by Nicholson Graham) for the applicants.
David Elvin and John Anderson (instructed by the Solicitor for Customs and Excise) for the Crown.
The following cases were referred to in the judgment:
R v Crown Court at Lewes, ex parte Hill UNK(1991) 93 Cr App R 60
R v Epsom Magistrates' Court, ex parte Bell VAT(1988) 3 BVC 326
R v Grossmann UNK(1981) 73 Cr App R 302
R v IR Commrs, ex parte Rossminster Ltd ELR[1980] AC 952
R v Manchester Crown Court, ex parte Taylor WLR[1988] 1 WLR 705
R v Marlborough Street Stipendiary Magistrate, ex parte SimpsonUNK(1980) 70 Cr App R 290
Value added tax - Access orders - Magistrates - Orders obtained by Customs in criminal investigation - Orders obtained ex parte - Whether orders properly obtained - Whether Customs permitted to apply ex parte - Value Added Tax Act 1994 schedule 11 subsec-or-para 11Value Added Tax Act 1994, Sch. 11, para. 11.
This was an application for judicial review by three applicants seeking to quash orders obtained by Customs under the Value Added Tax Act 1994 schedule 11 subsec-or-para 11Value Added Tax Act 1994, Sch. 11, para. 11 on the ground that the orders should not have been sought or granted ex parte.
On 25 July 1995 one of the applicants was arrested in connection with alleged VAT offences, but it was decided not to charge him at that stage.
On 14 September 1995 Customs obtained, at an ex parte hearing, three orders from the magistrates' court under the Value Added Tax Act 1994 schedule 11 subsec-or-para 11Value Added Tax Act 1994, Sch. 11, para. 11 requiring three banks to give Customs access to certain documents in order to further their investigation. Fresh orders after a full hearing were granted on 1 November.
Held, granting the relief sought:
1. While recognising the needs of investigation authorities, the interests of individuals who were liable to be affected by the orders sought should be safeguarded. That should be done by requiring applications to be made inter partes whenever it was practicable to proceed in that way.
2. The provisions of Sch. 11, para. 11 did not expressly give a power to Customs to seek orders ex parte, but they might do so in appropriate circumstances. However, they should consider, and any magistrate to whom they applied should also consider, whether it was appropriate to proceed in that way, bearing in mind that the balance was in favour of proceeding inter partes unless there was good reason to believe that something of value to the investigation might be lost if that course was adopted. Moreover, it was normally appropriate that notice of an application should be given to everyone who had a genuine interest in the proposed order.
In this case we have to consider whether access orders which were obtained by Customs from a magistrate sitting in and for the City of London were properly obtained and appropriately worded.
The applicants, Masood Asif and Nasreen Ahkter are husband and wife, and control the business of Jenice Ltd which trades in leather goods from premises in Bethnal Green Road, London, E1. Those two applicants also, it seems, control bank accounts in the name of Mohamed Bashir, the third named applicant, who is the father of Masood Asif. During 1995 Customs suspected that Jenice Ltd and its controllers had been avoiding payment of VAT, or had been obtaining repayments to which they were not entitled, by means of fraud. For present purposes the means thought to have been used do not matter, but it seems that what is alleged is the inflation of figures in relation to exports.
On 24 July 1995 Mr Asif was arrested and eventually he was granted bail without being charged. On 26 July 1995 orders in relation to property were obtained under s. 77 and 78 of the Criminal Justice Act1988 but those orders were later discharged because at that stage it was decided not to charge Mr Asif with an offence. On 14 August 1995 solicitors acting for him indicated that if necessary he would volunteer security, but on 14 September 1995 Customs ex parte obtained from the magistrates' court three orders under para. 11 of Sch. 11 of theValue Added Tax Act 1994. Those three orders, which are the first three orders challenged in these proceedings, required three banks, the United Bank Ltd, the Allied Bank of Pakistan and the Habib Bank, to give Customs access to certain certified documents which the officers of Customs wished to examine in order to further their investigation. The applicants, when they learnt of the orders, started proceedings for judicial review. On 2 October 1995 Popplewell J gave leave to move, and granted a stay. In fact the judge's order related to only two banks, but nothing now turns on that. In the affidavit filed on behalf of the applicants at that stage an offer was made to release bank accounts for the period 1 January 1993 to date, but as Customs made clear in their letter of 5 October 1995 they wanted more than just bank accounts, they wanted the items listed in the orders, and no unqualified offer to provide all of those items seems to have been forthcoming.
On 19 October 1995 Customs decided to seek fresh orders, no doubt because they realised that valid criticisms could be made of the way in which the orders of 14 September 1995 had been obtained. They encountered difficulty because the clerk to the justices considered, wrongly, that the judge's order prevented Customs from making a fresh...
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