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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Lithuanian Beer Ltd v Revenue And Customs  EWCA Civ 1406 (19 June 2018)
Cite as:  STC 1694,  EWCA Civ 1406,  1 WLR 627,  BTC 28
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ON APPEAL FROM THE UPPER TRIBUNAL (TAX AND CHANCERY CHAMBER)
(ASPLIN J and UPPER TRIBUNAL JUDGE BISHOPP)
 UKUT 245 (TCC)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE SALES
SIR COLIN RIMER
| Lithuanian Beer Limited
|- and -
|The Commissioners for Her Majesty's Revenue and Customs
James Eadie QC and Simon Pritchard (instructed by HMRC) for the Respondent
Hearing date: 7 June 2018
Crown Copyright ©
Lord Justice Sales:
"An assessment of the amount of any duty of excise due from any person shall not be made under this section at any time after whichever is the earlier of the following times, that is to say—
(a) subject to subsection (5) below, the end of the period of 4 years beginning with the time when his liability to the duty arose; and
(b) the end of the period of one year beginning with the day on which evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge;
but this subsection shall be without prejudice, where further evidence comes to the knowledge of the Commissioners at any time after the making of an assessment under this section, to the making of a further assessment within the period applicable by virtue of this subsection in relation to that further assessment."
(Prior to 1 April 2011, the time period in sub-paragraph (a) was three years, but nothing turns on this because the relevant sub-paragraph in this appeal is (b)).
"1. The commissioners' opinion referred to in s 73(6)(b) is an opinion as to whether they have evidence of facts sufficient to justify making the assessment. Evidence is the means by which the facts are proved.
2. The evidence in question must be sufficient to justify the making of the assessment in question (see Customs and Excise Comrs v Post Office  STC 749 at 754 per Potts J).
3. The knowledge referred to in s 73(6)(b) is actual, and not constructive knowledge (see Customs and Excise Comrs v Post Office  STC 749 at 755). In this context, I understand constructive knowledge to mean knowledge of evidence which the commissioners do not in fact have, but which they could and would have if they had taken the necessary steps to acquire it.
4. The correct approach for a tribunal to adopt is (i) to decide what were the facts which, in the opinion of the officer making the assessment on behalf of the commissioners, justified the making of the assessment, and (ii) to determine when the last piece of evidence of these facts of sufficient weight to justify making the assessment was communicated to the commissioners. The period of one year runs from the date in (ii) (see Heyfordian Travel Ltd v Customs and Excise Comrs  VATTR 139 at 151, and Classicmoor Ltd v Customs and Excise Comrs  V&DR 1 at 10).
5. An officer's decision that the evidence of which he has knowledge is insufficient to justify making an assessment, and accordingly, his failure to make an earlier assessment, can only be challenged on Wednesbury principles, or principles analogous to Wednesbury (see Associated Provincial Picture Houses Ltd v
Wednesbury Corp  1 KB 223) (see Classicmoor Ltd v Customs and Excise Comrs  V&DR 1 at 10–11, and more generally John Dee Ltd v Customs and Excise Comrs  STC 941 at 952 per Neill LJ).
6. The burden is on the taxpayer to show that the assessment was made outside the time limit specified in s 73(6)(b) of the 1994 Act."
"39. … Mr Ansah was not fixed with knowledge of the evidence until he had acquired it, and in this case he acquired it, not when it was identified to him in the course of his visit, and when (as we understand the judge's findings) he went no further than to satisfy himself that it was relevant, but when the copies sent to him were received.
40. We can illustrate that conclusion by a simple example. Suppose an officer has attended a trader's premises, as Mr Ansah did, with a specific enquiry in mind. He did not know, before he attended, what documents the trader might have which would assist him, but observed during his visit that the trader had various records which might or might not be relevant. As he did not have the time to examine them there and then he asked for copies to be sent. When the copies arrived the officer examined them, discovering that some were and some were not relevant to his enquiry. They reveal an underpayment of duty or tax which become the subject of an assessment. We do not see how it can reasonably be said that "evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment" came to their knowledge on the occasion of the visit; all the officer was able to do was determine that material which might contain evidence existed. That illustration is not quite parallel to the position here, as Mr Ansah identified material which was, rather than might have been, relevant, but the essential point remains the same: he identified the material, but was not in a position to identify the "evidence of facts" until the copies were supplied and he had the opportunity of examining them. That was, in substance, the conclusion of the FTT, and we see no flaw in the judge's reasoning on that issue."
Sir Colin Rimer:
Lord Justice McFarlane: