Discussion
Discussion
Relevant case law principles
We have been referred by the parties to various case law authorities. It will suffice for us to refer to comments of the Court of Appeal in Fleming at p381:
We make the following general comments on the duty to give reasons.
The duty is a function of due process, and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties especially the losing party should be left in no doubt why they have won or lost. This is especially so since without reasons the losing party will not know (as was said in Ex parte Dave) whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case. The second is that a requirement to give reasons concentrates the mind; if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not.
The first of these aspects implies that want of reasons may be a good self-standing ground of appeal. Where because no reasons are given it is impossible to tell whether the judge has gone wrong on the law or the facts, the losing party would be altogether deprived of his chance of an appeal unless the court entertains an appeal based on the lack of reasons itself.
The extent of the duty, or rather the reach of what is required to fulfil it, depends on the subject matter. Where there is a straightforward factual dispute, whose resolution depends simply on which witness is telling the truth about events which he claims to recall, it is likely to be enough for the judge (having, no doubt, summarised the evidence) to indicate simply that he believes X rather than Y; indeed there may be nothing else to say. But where the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other. This is likely to apply particularly in litigation where as here there is disputed expert evidence; but it is not necessarily limited to such cases.
This is not to suggest that there is one rule for cases concerning the witnesses’ truthfulness or recall of events, and another for cases where the issue depends on reasoning or analysis (with experts or otherwise). The rule is the same: the judge must explain why he has reached his decision. The question is always, what is required of the judge to do so; and that will differ from case to case. Transparency should be the watchword.
In summary, the duty to give reasons arises because fairness requires the parties to be left in no doubt as to why they have won or lost. The duty is important in ensuring that judgments are soundly based and to secure the basis for any appeal. Lack of adequate reasons is therefore a good self-standing ground of appeal. The extent of the duty depends on the subject matter, but in cases involving technical issues with reasons advanced on each side, the FTT must enter into the issues canvassed before it, and explain why it prefers one case over the other.
It is clear from the other cases to which we have been referred, principally English and Aria, that the duty must not be set too high (Aria [35]). In particular, there is no duty on the FTT to deal with every argument presented by counsel. It is sufficient if the FTT’s decision shows the parties the basis on which the FTT reached its decision. However, the issues the resolution of which were vital to the FTT’s conclusion should be identified and the manner in which it resolved them explained. If the reasons that the tribunal reached its decision are apparent from a review of the judgment, in the context of the material evidence and submissions, any challenge on the basis of inadequacy of reasons before an appellate court or tribunal should be dismissed (English [17]-[19], [26]).
- Heading
- Introduction
- Background
- VAT
- Excise duties
- The FTT Decision
- The Grounds of Appeal
- Ground 1: the burden of proof
- Background
- The FTT Decision
- The parties’ submissions in outline
- The relevant case law principles
- The burden of proof in tax appeals
- The burden of proof in penalty appeals
- DLN
- Penalties under Schedule 24 FA 2007 and Schedule 41 FA 2008
- Ground 2: approach to the issues and evidence
- Background
- The FTT Decision
- Discussion
- Conclusion
- Ground 3: conclusions inconsistent with the underlying evidence
- Background
- The FTT decision
- The parties’ submissions in outline
- Discussion
- Application to the facts of this case
- Conclusion
- Ground 4: breach of “best judgment” requirement
- Background
- Relevant case law principles
- There are two distinct questions which arise where an assessment purports to be made under section 73(1) VATA: first, whether the assessment has been made under the power conferred by that section; an
- The test as to whether an assessment is made to the best of HMRC’s judgment is classically set out in the judgment of Woolf J in Van Boeckel , at page 292e-293a, where he said this
- As to whether an alleged error in an assessment is to be taken as evidence that the assessment was not made to the best of HMRC’s judgment, the relevant question is whether the mistake is consistent w
- There are, however, dangers in an over-rigid adherence to a two-stage approach (i.e. first, validity; second, quantum) to a challenge to a best judgment assessment. The important issue for the tribuna
- The FTT Decision
- The parties’ submissions in outline
- The only relevant test of whether the assessment met the best judgment requirement was whether the mistakes in the assessment were “consistent with an honest and genuine attempt to make a reasonable a
- Application to the facts of this case
- Ground 4
- Ground 5
- Conclusion
- Background
- In relation to Ground 3
- In relation to Ground 4
- In relation to Ground 5 Why, if there was a breach of the best judgement requirement, it rejected the Court of Appeal’s guidance in Pegasus Birds at [23-29] not to automatically set aside the whole assessment but instead to
- If the Tribunal considered Mr Foster’s failure to consider the York Wine bank statements was so “serious or fundamental” that it required the whole assessment to be set aside ( Pegasus Birds [29]), wh
- The parties’ submissions in outline
- Discussion
- Application to the facts of this case
- Conclusions
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