Sitar Tandoori Restaurant v Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judgment Date | 28 May 1993 |
| Date | 28 May 1993 |
| Court | Queen's Bench Division |
Queen's Bench Division (Crown Office List).
Henry J.
Ajmalul Hossain (instructed by Sykes Anderson) for the taxpayer.
Alison Foster and Robert Jay (instructed by the Solicitor for Customs and Excise) for the Crown.
Value added tax - Appeal to VAT tribunal - Application for waiver of tax pending appeal - Application refused - Assessment reduced by Customs before hearing - Fresh appeal lodged - Appeals consolidated on application by Customs and dismissed without hearing on the ground that tax not paid - Whether appeals should have been consolidated - Whether reduced assessment gave rise to fresh appeal - schedule 7 subsec-or-para 4Value Added Tax Act 1983, Sch. 7, para. 4
This was an appeal by the taxpayer against a decision of the VAT tribunal that if an appeal has been lodged against an assessment which is subsequently reduced, the original appeal subsists and a fresh appeal against the reduced assessment cannot be brought.
The taxpayer appealed against a VAT assessment of £35,066 made under the schedule 7 subsec-or-para 4Value Added Tax Act 1983, Sch. 7, para. 4(1). Customs refused to waive the requirement in section 40 subsec-or-para (3)sec. 40(3) that the tax in issue should be paid before the appeal was heard. On 26 April 1991 the taxpayer made an application to the tribunal on the ground that to pay the tax before the hearing would cause hardship to the taxpayer. The application was successful to the limited extent that the tribunal made a direction giving the taxpayer three months to pay. The order was perfected on 8 May 1991 so that the date when the tax had to be received was 8 August.
Meanwhile, on 23 May, Customs issued an amended assessment in the reduced sum of £25,334.
On 10 July 1991 the taxpayer filled in a new notice of appeal in relation to the revised sum which, as the result of an administrative error, was given a new appeal number when it was received at the tribunal. Customs realised that two appeals were listed and applied to the tribunal to have them consolidated. That application was unsuccessfully opposed by the taxpayer.
The date by which the payment should have been received passed but no payment was made. On 13 August the taxpayer asked that the original assessment should be discharged and made a new hardship application.
Customs applied for a direction, giving both reference numbers, that, in the absence of any payment by the taxpayer, the appeal (in the singular) should be dismissed without a hearing. On 18 September the tribunal ordered that, for the avoidance of doubt, "both" appeals should be dismissed on the ground that tax had not been paid in accordance with the tribunal's direction of 8 May.
The taxpayer contended that the two appeals should not have been consolidated. After the second appeal was lodged, the first appeal should have been treated as won and consequently the direction of 8 May no longer operated. The time for paying the tax should have been extended, or at least the amount should have been reduced to the amount of the revised assessment covered by the original appeal.
Customs contended that schedule 7 subsec-or-para 4para. 4(9) of Sch. 7 to the 1983 Act contemplated that an assessment might be withdrawn or reduced and accordingly a reduced assessment remained the original assessment.
The issue was whether, when Customs reduced the amount of an assessment by amendment after an appeal to the tribunal had been lodged, the original assessment survived in a reduced amount or whether there was a new assessment which might be the subject of a fresh appeal.
Held, dismissing the taxpayer's appeal:
There was no right to appeal separately against a reduced appeal, nor was there any statutory machinery for a new appeal. It had not been necessary to consolidate the two appeals because the original appeal stood and there had always been a single appeal. Thus, the tribunal's direction on the hardship application giving three months to pay applied to the alleged second appeal, and, as no sum had been paid, to reduce the sum would have been a mere formality. The direction had not been complied with and the tribunal was entitled to dismiss the appeal.
The taxpayer appealed against a decision of the VAT tribunal (chairman Miss Plumtre). The grounds of the appeal were that the tribunal erred in law:
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