Van Boeckel v Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judgment Date | 18 December 1980 |
| Date | 18 December 1980 |
| Court | Queen's Bench Division |
Queen's Bench Division.
Mr. R. Noble (for Mr. W. Aylen) (instructed by Messrs. Davies Topping and Watkins) appeared as Counsel on behalf of the appellant.
Mr. D. Latham (instructed by Mr. G. F. Gloak, Solicitor for Customs and Excise) appeared as Counsel on behalf of the respondents.
Before: Woolf J.
Value added tax - Taxpayer licencee of public house - Assessment covering period of three years based on material made available by taxpayer and on a test conducted over a five-week period - No account taken for pilferage - Whether assessment made to the best judgment of the Commissioners - section 31 subsec-or-para (1)Finance Act 1972, sec. 31(1) (now schedule 7 subsec-or-para 4Sch. 7, para. 4(1)).
This was an appeal by C. P. M. Van Boeckel ("the taxpayer") against the decision of the London Value Added Tax Tribunal dismissing his appeal that an assessment made on him by the Commissioners had not been made to the best of their judgment.
The taxpayer was the licencee of a public house which was run by a manager. He based his VAT returns on the takings handed to him by his manager. When officers of Customs and Excise visited the taxpayer's premises they concluded that the taxpayer's returns for VAT were incorrect because the taxpayer had failed accurately to account and declare tax due on the full value of supplies made by him. The taxpayer suggested that pilferage was probably the cause of the deficiency. The officers did not interview the manager nor did they visit the premises of the taxpayer during opening hours. The officers conducted a test over a period of five weeks by noting the takings and on that basis issued the assessment. The taxpayer appealed contending that the assessment had not been made to the best of the Commissioners' judgment. They had taken insufficient steps to ascertain the true amount of tax due and the period of five weeks over which the test was conducted was too short a period on which to base an assessment covering a three-year period. Further, the Commissioners had taken no account of the possiblity of pilferage. The Tribunal dismissed the appeal but reduced the amount of the assessment to take account of pilferage. The taxpayer appealed.
Held, dismissing the taxpayer's appeal:
In assessing an amount of tax assessed to the best of the judgment of the Commissioners, under the section 31 subsec-or-para (1)Finance Act 1972, sec. 31(1), the Commissioners were required to consider fairly all material put before them by the taxpayer and to make a decision which was reasonable as to the amount of tax due upon the basis of that material. The Commissioners were not required to make investigations provided that there was some material on which they could reasonably base an assessment. If they did not make investigation they had to take into account the material disclosed by the investigation. In the instant case the Commissioners had acted properly in making a test limited to five weeks and taking the results obtained from the test as the basis for their assessment. It followed, therefore, that the assessment had been made to the best of the Commissioners' judgment.
The fact that the Tribunal had decided to reduce the assessment by taking into account pilferage did not mean that the taxpayer could challenge the validity of the assessment.
Woolf J.: This is an appeal by Mr. Van Boeckel from a decision of the London VAT Tribunal given on 7 November 1977. On that appeal before the Tribunal it was decided that the assessment of VAT made by the C. & E. Commrs. upon Mr. Van Boeckel on 15 November 1976, in the sum of £2,656 should be recomputed on the basis that an allowance should be made of £50 per week throughout the period of assessment, for pilferage of stock. In this court, it is contended that the assessment which led to the appeal to the VAT Tribunal is an assessment which should be quashed as being one which is, in effect, made ultra vires.
An appeal to this court from the decision of the VAT Tribunal is an appeal confined to a point of law. However, if on the facts of the matter which were before the VAT Tribunal, it was shown that the assessments were in fact ones which the C. & E. Commrs. had no authority to make then that is a matter which can be properly questioned on the appeal to this court.
The right of appeal against an assessment made by the C. & E. Commrs. in respect of VAT to the Tribunal is governed by section 40sec. 40 of the Finance Act 1972. section 40 subsec-or-para (1)Section 40(1) so far as relevant, provides:
40(1) An appeal shall lie to a value added tax tribunal … against the decision of the Commissioners with respect to … (b) an assessment under section 31 of this Act or the amount of such an assessment.
That provision dealing with the right of appeal makes it clear that, before the Tribunal, not only can the amount of the assessment be challenged, but also the actual making of the assessment itself. The power of the Commissioners to assess VAT which is due is contained in section 31 subsec-or-para (1)sec. 31(1) in these terms:
31(1) Where a taxable person has failed to make any returns required under this Part of this Act or to keep any documents and afford the facilities necessary to verify such returns or where it appears to the Commissioners that such returns are incomplete or incorrect they may assess the amount of tax due from him to the best of their judgment and notify it to him.
section 31 subsec-or-para (1)Section 31(1) sets out various conditions which have to be fulfilled before the right to assess arises. Some of those conditions are ones which depend on an objective state of affairs such as the taxable person failing to make returns. Others are ones which depend upon the judgment of the Commissioners, for example, the judgment of the Commissioners when it appears to them that the returns which were made were incomplete. If the conditions or one of the conditions are fulfilled which give the right to make an assessment, then the power of the Commissioners is to make an assessment of the amount of tax due from the taxpayer to the best of the Commissioners' judgment.
The issue which arises on the appeal before this court is whether or not the Commissioners, in making their assessment, complied with the requirement that the assessment must be for the amount of tax...
To continue reading
Request your trial
-
Rahman (trading as Khayam Restaurant) v Commissioners of Customs and Excise (No 2)
...as to the answer to that question. The chairman took the view—in the light of observations made by Mr Justice Woolf in Van Boeckel v Commissioners of Customs & Excise [1981] STC 290 —that it was enough that the Commissioners had, through Mrs Stark, acted "honestly and bona fide". That requ......
-
Henderson (t/a Tony's Fish and Chip Shop) v Commissioners of Customs and Excise
...Inland Services Inc v C & E Commrs VAT(1987) 2 BVC 200,276 Seto v C & E Commrs VAT(1980) 1 BVC 363 Van Boeckel v C & E Commrs VAT(1980) 1 BVC 378 Value added tax - Registration - Liability - Notification - Registration effective from end of month following relevant month - Customs determine......
-
Rahman (t/a Khayam Restaurant) v Commissioners of Customs and Excise
...102 Georgiou (t/a Mario's Chippery) v C & E Commrs VAT[1996] BVC 236 Koca v C & E Commrs VAT[1996] BVC 35 Van Boeckel v C & E Commrs VAT(1980) 1 BVC 378 Value added tax - Assessment to best of Customs' judgment - The tribunal chairman and the second member disagreed as to "best of judgment"......
- Georgiou and another (trading as Marios Chippery) v Customs and Excise Commissioners