Royal College of Obstetricians and Gynaecologists
| Jurisdiction | UK Non-devolved |
| Judgment Date | 29 October 1996 |
| Date | 29 October 1996 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
VAT Tribunal
VAT Tribunal
VAT Tribunal
VAT Tribunal
VAT Tribunal
The following cases were referred to in the decision:
Amministrazione delle Finanze dello Stato v Simmenthal SpA(Case 106/77) [1978] ECR 629
BP Supergas Anonimas Etairia Geniki Emporiki-Viomichaniki kai Antiprossepeion v Hellenic Republic TAX(Case C-62/93) [1995] BTC 5369
Congreve v Home Office ELR[1976] 1 QB 629
Corporation, etc. of Huddersfield v The Great Northern Railway(1881) 50 Law Journal QB 587
C & E Commrs v J Boardmans (1980) Ltd VAT(1985) 2 BVC 200,150
Ellerine Bros (Pty) Ltd v Klinger UNK[1982] 2 All ER 737
Francovich v Italy (Joined Cases C-6/90 and C-9/90) [1991] ECR I-5357; 1 CEC 604" [1993] 1 CEC 604
Hayter v Nelson and Home Insurance Co UNK(1990) 2 Ll Rep 265
London and North Western and Great Western Joint Railway Companies v JH Billington Ltd ELR[1899] AC 79
Maunsell v Olins ELR[1975] AC 373
Padfield v Minister of Agriculture ELR[1968] AC 997
President of India v Lips Maritime Corp ELR[1988] 1 AC 395
In re McGreavy ELR[1950] 1 Ch 269
R v Value Added Tax Tribunal Centre (Belfast), ex parte C & E Commrs VAT(1977) 1 BVC 125
Roy v Kensington and Chelsea and Westminster Family Practitioner Committee ELR[1992] 1 AC 624
Secretary of State for Employment v Mann ICR[1996] ICR 197
Woolwich Building Society v IR Commrs TAX[1992] BTC 470
Application to strike out - Whether an appeal could be made to the tribunal where there was no dispute as to quantum but the commissioners refused to make payment - Whether the tribunal had power to direct the commissioners to pay sums which they admitted to be due to the taxpayers - Value Added Tax Act 1994 section 25 section 80 section 83Value Added Tax Act 1994, ss. 25, 80 and 83.
The issue was whether an appeal made to the tribunal where the commissioners admitted that sums were due from them to the taxpayer but declined to pay was allowable and whether, in those circumstances, the tribunal had the power to direct the commissioners to make such payment.
On 18 July 1996 the Treasury announced that, with effect from that date, no repayments for overpaid or under reclaimed VAT would be made for any period longer than three years prior to the date of the reclaim. This was to be enacted in the 1996 Finance Act. In accordance with this pronouncement Customs refused to make payment to the appellants of their claims in full. The appellants appealed and Customs applied to have the appeals struck out on the ground that no dispute existed between the parties.
The tribunal directed that the applications be heard in public and that after the strike-out application had been made the appeals be heard on the basis that the tribunal had dismissed the applications without it having in fact done so.
All six appellants had reclaimed VAT either overpaid as output tax or under-reclaimed as input tax and in each case the commissioners had accepted that the amounts claimed were in fact due under current law but had refused to make full repayment.
The commissioners contended that the tribunal's jurisdiction was limited to disputes arising under the provisions of Value Added Tax Act 1994 section 83s. 83, Value Added Tax Act 1994. In the case of the Royal College of Obstetricians and Gynaecologists (RCOG),Value Added Tax Act 1994 section 83 subsec-or-para (c)subs. 83(c) was limited to disputes relating to the quantum of input tax about which there was no dispute between the parties.Value Added Tax Act 1994 section 83Section 83 made it clear that not only did there have to be a decision of the commissioners that fell within the section but the decision had to be the subject of a dispute between the commissioners and the taxpayers.
In all the appeals, whether for under-reclaimed input tax or overpaid output tax, the statements of fact, included by agreement between the parties, asserted that there was no dispute between the parties regarding either the amount or the liability, in principle, of the commissioners. It followed that the commissioners were not disputing any of the claims but merely not paying part of them. As there was no decision giving rise to a dispute within the terms of s. 83 no appeal lay to the tribunal.
In the case of the RCOG it was contended that the commissioners were incorrect. The dispute was about the amount of input tax which might be credited to a person, which are the words in subs. 83(c). In their letter declining to credit the RCOG with their input tax in full the commissioners stated that the amount properly reclaimable had been decreased. This clearly showed a decision by the commissioners concerning the amount of input tax which could be credited by the appellant. Where the law said that the commissioners "shall pay" it meant "pay immediately" and not "we might pay if the law does not get altered".
For the other appellants it was contended that nowhere in Value Added Tax Act 1994 section 83s. 83 was there any reference to the need for a dispute to be in existence as to any of the matters listed. The wording of the section was deliberately wide and all that was necessary for an appeal to be admissible was that it be "with respect to any of" the matters listed in the section. There was no basis for reading into Value Added Tax Act 1994 section 83 subsec-or-para (c)subs. 83(c) the words "any dispute arising as to liability or quantum". In any event there plainly was a relevant dispute in that in each case while there was no dispute as to liability the commissioners declined to pay and claimed to have a legal basis for not paying, namely that they had an alleged discretion as to the timing of repayments otherwise due under s. 80. The mere fact that there is no arguable defence to a claim does not mean that there is no dispute. If there is neither defence from nor payment by the commissioners the only options that a taxpayer has is to appeal.
In reply the commissioners maintained that the assertion that the amounts in question would never be paid was a gross distortion of the truth. The commissioners accepted both quantum and liability in every case and if Parliament failed to approve the Paymaster General's announcement of 18 July 1996 the amounts claimed would be paid automatically.
The discretion of the commissioners not to pay did not flow fromValue Added Tax Act 1994 section 80s. 80 but came under the care and management of VAT as contained in Value Added Tax Act 1994 schedule 11 subsec-or-para 1para. 1(1), Sch. 11, Value Added Tax Act 1994. The fact that there was no specific obligation under Value Added Tax Act 1994 section 25 section 80ss. 25 and 80 obliging the commissioners to pay the sums concerned was a telling argument against the case advanced by the appellants.
Held, dismissing the commissioners' application and allowing the appeals:
1. While there was no dispute as to the amount the commissioners ought to pay or repay to each of the six appellants under the law as it currently stood, there was a dispute as to the amount the commissioners were in fact prepared to pay. It followed that a dispute existed between the appellants and the commissioners in each of the cases.
2. In any event the tribunal did not accept that where the commissioners accepted that monies were due to taxpayers underValue Added Tax Act 1994 section 25 section 80s. 25 and s. 80 and raised no issue as to quantum that they thereby deprived the tribunal of jurisdiction under s. 83.
3. Value Added Tax Act 1994 section 25 subsec-or-para (3)Section 25(3) provided that the amount of any VAT credit exceeding output tax due from the taxpayer "shall be paid to the taxable person" and Value Added Tax Act 1994 section 80 subsec-or-para (1)s. 80(1) provided that, where a taxpayer has paid an amount by way of VAT which is not VAT due to them, they (the commissioners) "shall be liable to repay the amount to him" that was the law as it stood and the commissioners were bound by that law. That was sufficient for Customs' application to be dismissed.
4. Although there is nothing in Value Added Tax Act 1994 section 25Value Added Tax Act 1994, s. 25 that specifies the time or date within which the commissioners are required to make a payment, it appeared to the tribunal implicit from Value Added Tax Act 1994 section 78 section 79ss. 78 and 79 that the commissioners were expected to make payments in most cases within a period of 30 days beginning from the date of the receipt by the commissioners of the return. Similar conditions apply to Value Added Tax Act 1994 section 80s. 80 which imposes no duty on the commissioners to make a repayment by a specified date or within a specified period of time, but that does not mean that the timing of the payment is therefore a matter of discretion for the commissioners.
5. In none of the six appeals had the commissioners exercised a discretion to delay payment of the amount due to the individual appellants; rather they had plainly refused to make payment or repayment. Even if the commissioners had a discretion in the matter its exercise in the present circumstances would be wholly improper and their decision not to pay would be totally unreasonable.
6. The specific statutory rights granted to taxpayers to obtain payment or repayment of sums due and payable by the commissioners did not fall to be dealt with within Value Added Tax Act 1994 schedule 11 subsec-or-para 1para. 1(1) of Sch. 11 of the 1994 Act and, whatever might be the scope of para. 1, it did not extend to the matters with which these appeals were concerned.
7. Despite the most detailed consideration of the legislation the tribunal was unable to find anything therein which gave it the power to direct the commissioners to make payment or repayment as the case might be of the sums which they were...
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