![UT/2022/000157 - [2024] UKUT 00346 (TCC)](https://backend.juristeca.com/files/emisores/logo_ICfrj4g.png){kind=logo}
Introduction
Introduction
This is an appeal by the appellants, the Commissioners for His Majesty’s Revenue and Customs (“HMRC”), against a decision of the First-tier Tribunal (the “FTT”) dated 5 October 2022 (the “FTT Decision”) (Footnote: 1).
In the FTT Decision (Footnote: 2), the FTT allowed the appeals of the respondents, Sintra Global Inc. (“Global”) and Mr Parul Malde, against various decisions and assessments of HMRC relating to the non-payment of VAT and excise duties and related penalties, which HMRC say arose from the fraudulent diversion of alcohol into the UK and its subsequent sale in the UK by Global and Sintra SA (“SA”). Global is a company that is incorporated in Panama. SA is a company incorporated in Belize. It is HMRC’s case that Global and SA were at all material times controlled by Mr Malde.
HMRC appeals against the FTT Decision with the permission of the FTT.
At the hearing, HMRC were represented by Mr Ben Hayhurst and Mr George Penny. Global and Mr Malde were represented by Alistair Webster KC and Mr Simon Gurney. We are grateful to counsel for their helpful submissions both orally and in writing and for their assistance during the hearing. We should express particular thanks to Mr Hayhurst (supported by Mr Penny) who, we understand, took over this case from John McGuinness KC at short notice due to a clash with Mr McGuinness’s other court commitments. We are also grateful to the parties for arranging for a transcript of the hearing, at our request. We have found the transcript to be of great assistance in considering the submissions of counsel made at the hearing.
- 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