R v Income Tax Special Comrs.ex parte Magill
| Jurisdiction | Northern Ireland |
| Judgment Date | 20 November 1979 |
| Date | 20 November 1979 |
| Court | Queen's Bench Division (Northern Ireland) |
HIGH COURT OF JUSTICE (QUEEN'S BENCH DIVISION, NORTHERN IRELAND)-
Income tax - Judical review - Mandamus/certiorari - Special Commissioners declined to state a Case on their refusal of an application to bring an appeal out of time - Whether jurisdiction to state Case - Whether proper question determined - Taxes Management Act 1970 (c 9), ss 31(1) and (5), 46(2), 48(1), 49(1), 46, 58 and 59- Judicature (Northern Ireland) Act 1978 (c 23), s 18; Rules of the Supreme Court (Northern Ireland) 1936, Ord 97, r 3.
The Inspector referred an application by M under s 49(1), Taxes Management Act 1970, to bring an appeal out of time to the Special Commissioners. They held that M had a reasonable excuse for not bringing his appeal within the time limit, but that he had not thereafter made his application "without unreasonable delay" within the meaning of s 49(1). When M asked for a Case to be stated under s 56 of that Act they refused on the grounds that the determination of an application under s 49(1) was not the determination of an appeal, so that s 56 did not apply.
M sought an order of mandamus requiring them to state a Case or alternatively an order of certiorari directing them to determine his application according to law.
The Queen's Bench Division (Northern Ireland), held that orders of mandamus and certiorari would be refused because:
(2) the words "on an application for the purpose" in s 49(1) were satisfied only if either in the body of a notice of appeal or separately an express application were made to the Inspector for obtaining relief from being out of time and for satisfying him that there was a reasonable excuse for being out of time and that there was no unreasonable delay in making the application: therefore the general terms of M's notice of appeal out of time could not be regarded as such an application;
(3) the consideration by the Commissioners of the subsequent application made by M was not by way of appeal but by way of reference of the original question whether an appeal out of time should be entertained. Until such an application had been determined favourably to the applicant there was no appeal:
(4) since an application under s 49(1) was not an appeal, M had no right under s 56(1) to require the Commissioners to state a Case;
(5) there was no error of law involved in the Commissioners' determination to refuse the application.
Per Curiam: even a short delay by an applicant might be deliberate, unreasonable and inexcusable. Therefore, it would not be a due performance of an Inspector's duty to assume in any case that because the delay was short the statutory requirements of s 49(1) were satisfied.
The facts are recited in the judgment.
The case was heard in the Queen's Bench Division (Northern Ireland) before Gibson L.J. on 8 November 1979 when judgment was reserved. On 20 November 1979, judgment was given in favour of the Crown, with costs.
Gibson L.J.-The papers before me and the statements of Counsel make it clear that not all the facts in the case are agreed, but I believe I can reach a conclusion without departing from firm factual ground.
In 1968 and 1969 Mr. Magill, the Applicant, bought 14 acres of land which, he stated, he intended to use for the purpose of his business, but which due to change of circumstances he resold in 1971 at a profit of £15,976. In June 1973 he made his income tax return for the year 1971-72 and included this sum as a capital gain. The Inspector of Taxes issued an assessment dated 17 December 1973 for £6,190.70 which was shown to be calculated at 38.75 per cent. (the then standard rate of income tax) on the gain, and this gain was described under the heading: "Profit of trade, etc. Transaction in land. Section 488 I.C.T.A. 1970". Section 488 of the Income and Corporation Taxes Act 1970 is intended to prevent the avoidance of tax by persons engaged in what are described as "artificial transactions in land" and renders any gains resulting therefrom liable to tax as income and not as capital. Section 31(1) of the Taxes Management Act 1970 (the Act) specifies the time for appealing from such an assessment as 30 days from the date of the notice of assessment and notice of this appeared on the face of the Applicant's notice of assessment together with the further information that the notice of appeal should be in writing and should specify the grounds of appeal, which is required by s 31(5).
No appeal in due time was lodged by the Applicant, but by letter dated 5 February 1974 he wrote to the Inspector as follows: "I am in receipt of your assessment 1971/72 dated 17/12/73. Please confirm that Tax chargeable at 38.75% is correct and not at Capital Gains Rate of 30%." From the terms of this letter I infer that he knew that the appropriate rate of tax for capital gains was 30 per cent. and also that the gain had been assessed not as a capital gain, as he had claimed, but as income. To this letter the Inspector replied on 6 March 1974:
Thank you for your letter of 5 February, 1974. Under section 488 of the Income Tax Act 1970 where "land or any property deriving its value from land is acquired with the sole or main object of realising a gain from disposing of the land" then this income will be chargeable not as a capital gain but to Income Tax under Case VI of Schedule D. Tax charged on the assessment concerned would therefore...
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