William Ovenell ; Walter A. Cartwright Ltd
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE BLAIN |
| Judgment Date | 26 January 1968 |
| Judgment citation (vLex) | [1968] EWCA Crim J0126-5 |
| Docket Number | No. 3621/67 No. 3620/67 |
| Court | Court of Appeal (Criminal Division) |
| Date | 26 January 1968 |
[1968] EWCA Crim J0126-5
The Lord Chief Justice of England (Lord Parker)
Lord Justice Sachs
and
Mr. Justice Ashworth
No. 3621/67
and
No. 3620/67
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Royal Courts of Justice
MR. S. PARRISH appeared on behalf of both Applicants.
On the 23rd June of 1967 these two applicants, the limited company W.A. Cartwright Limited and one Ovenell, were convicted of furnishing a false purchase tax return for the period the 1st April-30th June 1965 and convicted also of a like offence for the period 1st July-30th September 1965. Each was fined £200 on each count, with nine months to pay, three months' imprisonment in default in Ovenell's case, and each was ordered to pay £100 costs. They now seek leave to appeal against conviction and the notice of application, though this is not pursued, is against sentence also.
The defendant company are wholesalers dealing in domestic hardware and kindred commodities. The defendant Ovenell is a Director of the company, he controls it, and to all intents and purposes he owns it. His wife holds one share and he holds the remainder.
By virtue of the Purchase Tax Act 1963 and regulations made thereunder wholsesalers of chargeable goods are required to register with the Commissioners of Customs and Excise. The defendant company is such a wholesaler and has been so registered at all material times. It is therefore required to keep proper records of its purchases and sales of what are called chargeable goods, and when such goods are sold to unregistered persons purchase tax becomes payable to the Commissioners and the records of purchases and sales are required to show the amount of such tax payable in respect of such sales.
Section 31 of the Purchase Tax Act 1963 empowers the Commissioners to make regulations for the purpose of giving effect to the provisions of the Act and of enabling the Commissioners to discharge their functions thereunder and, in particular, for requiring registered persons to keep accounts and to make returns of the amounts for which they are accountable. Under these powers the Commissioners made the Purchase Tax Regulations of 1965, Statutory Instrument 1965 Ho. 1050. The regulation in question here is Regulation 7, which requires every registered person in each year to furnish returns in a prescribed form showing the amount of tax for which he is accountable in respect of each of the quarterly periods from 1st January-31st March; 1st April-30th June; 1st July-30th September; and 1st October-31st December and to pay the amount of tax appearing by such returns to be due. This case is concerned with the defendant's returns for the second and third periods of 1965.
Under the provisions of Section 33(2)(a) of the 1963 Act any person who "with intent to deceive, for the purposes of this Act or of regulations made thereunder, produces, furnishes, sends or otherwise makes use of any book, account, estimate, return or other document which is false in a material particular" shall be liable to a penalty of £500 or to imprisonment for a term not exceeding two years or to both. It is under that Section that these defendants were charged and indicted.
The return made in respect of the period 1st April-30th June 1965 and admittedly signed by the defendant Ovenell was dated the 22nd July 1965, and indicated the total amount of purchase tax due and payable as £1125. 7s.0d. The comparable return made in respect of the period 1st July-30th September 1965, also admittedly signed by the defendant Ovenell, was dated the 19th October 1965 and indicated the total amount of purchase tax due and payable as £1068. 8s.7d.
On the 13th January 1966 an Investigating Officer of the Commissioners of Customs and Excise, a gentleman named Downs, together with his colleague named Rigby visited the company's premises and there interviewed Ovenell, the company's secretary, Jackson, also being present. There was discussion as to registered customers; as to stock records and stock held at the beginning and end of the company's previous financial year; as to methods of dealing with orders and payment by customers. Then Downs asked to see the Sales Day Book, which was produced and which Ovenell told him covered all taxable goods transactions. After further discussion Downs said to Ovenell, "Let me say this, I have had some years experience of purchase tax, and I know that registered wholesalers are sometimes under a certain amount of pressure; sometimes traders like yourself are faced with demands from unregistered customers to supply goods without charging purchase tax, and I know that such pressure on registered wholesalers in this type of business can be very great indeed. Sometimes such traders succumb to the pressure." Ovenell replied, "It doesn't happen now, you fellows cleaned up the trade, it is much better since that Court case." He was referring to the case of The Commissioners of Customs and Excise v. Hartz-Lee, which at that time had not reached the Court of Criminal Appeal. Then came the next statement - it is not in the form of a question - from Downs which gives rise to the first ground of application. Downs said, "I can have some sympathy for a registered wholesaler who finds himself under great pressure from an unregistered customer. There seems to me to be two different types of fraud, one where the registered trader deliberately defrauds the revenue for his own profit, and another where the registered trader is faced with the alternative of either making no sale or selling without charging tax, and he himself makes no profit from the revenue but has the advantage of undercutting his competitors by the amount of tax; but a registered trader does have a duty to account for the tax on all chargeable sales." Ovenell did not say anything, and Downs went on, "Would I be right in assuming that this is what has happened in this business?", and Ovenell said, "Something like that, yes." Downs then said, "So that there were in fact off-record sales of chargeable goods?". Ovenell said, "Yes, but I never made a penny out of it …".
It is not possible to quantify the true liability to purchase tax in respect of either of the two quarterly periods in question since the detailed items of goods involved in the off-record sales, as they were called, are neither recorded nor ascertainable.
A submission was made by Mr. Parrish on behalf of Ovenell and this company that that oral admission of Ovenell should not be received in evidence on the ground that it was not truly voluntary within the principle annunciated by Lord Sumner in the well-knowm case of ( Ibrahim v. The King 1914 Appeal...
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