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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Khan v Customs & Excise [2005] EWHC 653 (Ch) (19 April 2005) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2005/653.html Cite as: [2005] EWHC 653 (Ch) |
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CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
MOHAMMED SIDDIQ KHAN |
Appellant |
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- and - |
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THE COMMISSIONERS OF CUSTOMS & EXCISE |
Respondents |
____________________
Miss Nicola Shaw (instructed by The Solicitor for HM Customs & Excise) for the Respondents.
Hearing dates: 6th & 7th April 2005
____________________
Crown Copyright ©
Mr. Justice Hart :
"47. Mr Arifeen on behalf of the Appellant pointed out that his client was not aware until the interview on 10 December 1998 of the importance of the ticket books. He subsequently provided an analysis of 17 such books which indicated an average price per ticket of £5.99. These books related to the year 1999.
48. The Officers of Customs and Excise had first relied upon the analysis of one ticket book which they had collected initially on 22 October 1998. They reached the conclusion that during the period 26 November 1996 to 20 October 1998 (some 23 months) between 47 to 60 ticket books may have been used. They relied upon this by checking the sequential numbering of the tickets in the lost ticket book. Mr Khan believed that those books were not used sequentially in the order of numbers and some of the tickets in the book were very old.
49. At the interview on 10 December 1998 the atmosphere and the behaviour of the Officers were found by Mr Khan to be intimidating.
50. After the interview, another ticket book had been obtained from Mr Khan which showed an average item price of £7.17. Based on the two prices of £8.13 (ascertained from the first investigation) and £7.17, an average ticket price of £7.70 had been derived for the calculation of the assessment and for requisition purposes. Mr Khan maintained that it was misleading to estimate the average ticket price based on only two books.
51. Officer Waldron in her report prepared on 23 November 1998 had allowed an arbitrary figure of 5% of turnover for uncollected garments which should have been taken into account; likewise no provision was made for 'bounced' cheques nor monies returned to unsatisfied customers.
52. It was submitted that Customs and Excise had not used best judgement in making the assessment as an inadequate method was used to derive the average ticket price and the calculation of the number of ticket books used in the assessment period (47) was excessive and not in accordance with the annual gross turnover figure in Mr Khan's accounts for the year ending 30 November 1997."
Those submissions reflect in summary the points made in the defence document.
i) Did the Appellant exceed the registration threshold of £49,000 with effect from 1 July 1997?
ii) Was the assessment made to the best judgement of the Respondents and should it be reduced?
iii) Was the civil penalty validly raised?
iv) Should the penalty be further reduced or increased?
"The Tribunal considers that the burden of proof in both the issues i) and ii) referred to in the last paragraph lies on the Appellant and the question to be determined in iii) lies on the Respondents."
"80. Therefore we take the view that it is fair and equitable to base the assessment on an average ticket price of £6.84 (£5.99 + £7.70 = £13.69 ÷ 2 = £6.84). This will have the effect of reducing the assessment and the subsequent penalty.
81. We reduce the assessment under the power given to us by section 83(p) of the 1992 [sic]Act"
"82. The third issue in the appeal is whether Mr Khan had done any acts, or omitted to take any action, for the purpose of evading tax, and whether his conduct involved dishonesty within the meaning of section 70 [sic] of the 1992 [sic] Act.
83. For Customs and Excise, Miss Shaw argued and we accept that the standard of proof of dishonesty was the civil standard of proof on the balance of probabilities. The test of dishonesty is subjective.
We apply the dicta of Lord Lane CJ in R v. Gosh [1982] 2 All ER 689 'it is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest even if he asserts or genuinely believes that he is morally justified in acting as he did.'
84. Miss Shaw submitted on behalf of Customs and Excise that the Appellant intended to evade VAT by suppressing the true level of his supplies so as to appear to fall beneath the threshold of VAT. It is clear from his interview that Mr Khan was aware of the limit and the requirements to register. Indeed, he had previously run a VAT registered dry cleaning business.
85. Mr Khan ran the business as a sole proprietor. He was responsible for the day to day running of the business. The only involvement of others in the business was one part-time worker and the Appellant's wife and son. It was very much a family business and Mr Khan would have been perfectly aware of the true takings.
86. Customs and Excise asserted that the deliberate suppression of takings so as to evade a liability to account for VAT would be regarded as dishonest by ordinary people and that the Appellant would have been only too aware that his actions would be regarded as dishonest.
87. No explanation at all has been offered for the suppression of sales. Neither Mr Khan nor his accountant gave evidence at the Tribunal. The Appellant has refused to accept the calculations produced by Customs' Officers. However, we do note that Mr Khan has changed his story since his initial interview. He now maintains that approximately 18.5 ticket books are used per year and that the average ticket price is £5.99. Such a change can only be regarded as a deliberate attempt to mislead the Officers.
88. We find Mr Khan's dishonesty can readily be inferred from his conduct. His actions were obviously dishonest and he must have known that the ordinary person would have so regarded them.
89. Taking all the above into account and considering all the evidence, we find that no explanation other than deliberate suppression is possible. The Respondents have used best judgement and have discharged the burden on them of proving dishonesty."
i) ought to have considered the gravity of the charges against Mr Khan and made inquiry as to whether the appellant's rights to a fair hearing would be infringed;
ii) misdirected itself as to law in respect of the admissibility and/or weight of evidence which had been obtained unfairly to such an extent that it rendered the Tribunal's Decision unsafe;
iii) misdirected itself as to law in respect of the standard and burden of proof it ought to apply when considering an appeal against the imposition of a penalty under section 60 of the Value Added Tax Act 1994;
iv) reached a conclusion that was irrational.
The statutory provisions
"Where a person has failed to make any returns required under this Act (or under any provision repealed by 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 VAT due from him to the best of their judgement and notify it to him."
Section 60 of the 1994 Act is headed "VAT evasion: conduct involving dishonesty". It provides so far as material:
"(1) In any case where-
(a) for the purpose of evading VAT, a person does any act or omits to take any action, and
(b) his conduct involves dishonesty (whether or not it is such as to give rise to criminal liability),
he shall be liable, subject to subsection (6) below, to a penalty equal to the amount of VAT evaded or, as the case may be, sought to be evaded, by his conduct…
"(3) The reference in subsection (1) above to the amount of the VAT evaded or sought to be evaded by a person's conduct shall be construed—
(a) in relation to VAT itself or a VAT credit as a reference to the aggregate of the amount (if any) falsely claimed by way of credit for input tax and the amount (if any) by which output tax was falsely understated; and ….
(4) Statements made or documents produced by or on behalf of a person shall not be inadmissible in any such proceedings as are mentioned in subsection (5) below by reason only that it has been drawn to his attention—
(a) that, in relation to VAT, the Commissioners may assess an amount due by way of a civil penalty instead of instituting criminal proceedings and, though no undertaking can be given as to whether the Commissioners will make such an assessment in the case of any person, it is their practice to be influenced by the fact that a person has made a full confession of any dishonest conduct to which he has been a party and has given full facilities for investigation, and
(b) that the Commissioners or, on appeal, a tribunal have power under section 70 to reduce a penalty under this section,
and that he was or may have been induced thereby to make the statements or produce the documents.
(5) The proceedings mentioned in subsection (4) above are—
(a) any criminal proceedings against the person concerned in respect of any offence in connection with or in relation to VAT, and
(b) any proceedings against him for the recovery of any sum due from him in connection with or in relation to VAT.
(6) Where, by reason of conduct falling within subsection (1) above, a person is convicted of an offence (whether under this Act or otherwise), that conduct shall not also give rise to liability to a penalty under this section.
(7) On an appeal against an assessment to a penalty under this section, the burden of proof as to the matters specified in subsection (1)(a) and (b) above shall lie upon the Commissioners.
Section 72 is headed "Offences" and reads:
" (1) If any person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of VAT by him or any other person, he shall be liable—
(a) on summary conviction, to a penalty of the statutory maximum or of three times the amount of the VAT, whichever is the greater, or to imprisonment for a term not exceeding 6 months or to both; or
(b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding 7 years or to both."
Fresh evidence
"93. Mr Arifeen inferred during the hearing that his client's human rights had been infringed as a result of the investigation and particularly when the interview took place. He did not elaborate further or give specific submissions in this respect.
94. Miss Shaw referred the tribunal to the lead decision of the Court of Appeal in Customs and Excise Commissioners v. Han & Yau and other appeals [2001] 4 All ER 687 and particularly the judgment of Potter LJ at paragraphs 83 and 84 on pages 1213 and 1214. He held that the effect of certain ECHR decisions was that the penalties had to be regarded as involving a 'criminal charge' for the purposes of Article 6 of the European Convention on Human Rights. He observed that 'it by no means follows from a conclusion that Article 6 applies that civil penalty proceedings are, for other domestic purposes, to be regarded as criminal and, therefore, subject to those provisions of the Police and Criminal Evidence Act 1984 and/or the codes produced thereunder, which relate to the investigation of crime and the conduct of criminal proceedings as defined by English law.'
95. He continued 'if matters are made clear to the taxpayer… at the time when the nature and effect of the inducement procedure are also made clear to him (whether by VAT Notice 730 or otherwise), it is difficult to see that there would be any breach of Article 6…' the hearing, but photocopies of the entries were made available at a much earlier date.
96. Mr Khan was made fully aware of the contents of VAT Notice 730 and we are satisfied from the evidence before us that there was no breach of Article 6 in the investigation and interview. In our view, he has received a fair and public hearing and his rights have not been infringed in connection herewith. It is regrettable that the two test ticket books taken by Customs Officers were not returned as promised until the first day of the hearing, but photocopies of the entries were made available at a much earlier date."
The first submission
"(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require."
" Certainly, in itself the appointment of legal aid defence counsel does not necessarily settle the issue of compliance with the requirements of Article 6(3)(c). As the Court stated in its ARTICO judgment:
'The Convention is intended to guarantee not rights that are theoretical or illusory but rights that are practical and effective . . . . [M]ere nomination does not ensure effective assistance since the lawyer appointed for legal aid purposes may die, fall seriously ill, be prevented for a protracted period from acting or shirk his duties. If they are notified of the situation, the authorities must either replace him or cause him to fulfil his obligations.'
Nevertheless, 'a State cannot be held responsible for every shortcoming on the part of a lawyer appointed for legal aid purposes.' It follows from the independence of the legal profession of the State that the conduct of the defence is essentially a matter between the defendant and his counsel, whether counsel be appointed under a legal aid scheme or be privately financed. The Court agrees with the Commission that the competent national authorities are required under Article 6(3)(c) to intervene only if a failure by legal aid counsel to provide effective representation is manifest or sufficiently brought to their attention in some other way."
"The Court agrees with the Commission that where deprivation of liberty is at stake the interests of justice in principle called for legal representation."
"[to tell] Mr Khan that if he were unable to afford legal representation, the Legal Services Commission did make aid available for the provision of legal representation at penalty appeals before the Tribunal. Only after providing this information for Mr Khan's consideration should the Tribunal have determined to carry on with hearing the appeal."
"I did not give evidence at the appeal, although I would have been willing to do so. Mr Arifeen decided that it was not necessary to call me. He based his case on the analysis he carried out. If his analysis was accepted, this would have meant that the takings for the period concerned, would have been under the threshold for registration, and ended the matter."
He added at the end of his witness statement:
"I did not know that I could have been granted legal aid for my appeal in the Tribunal. If I had known I could have received legal aid then I would have wanted a lawyer or specialist to represent me in the Tribunal."
"Without prior notification, the interview was conducted under caution and was tape recorded. Both Mr Khan and Mr Arifeen considered the atmosphere of the interview and the behaviour of the officer intimidating."
The second submission
"(9) Persons other than police officers who are charged with the duty of investigating offences or charging offenders shall in the discharge of that duty have regard to any relevant provision of … a code."
"You do not have to say anything. But it may harm your defence if you do not mention when questioned something which you later rely on in court. Anything you do say may be given in evidence."
"THE RELEVANT FEATURES OF THE VAT CIVIL PENALTY CODE
[46] Section 60 of VATA was enacted pursuant to the Keith Report recommendations for a civil penalty code for VAT offences; however, the recommendation that mitigation of the penalty imposed for offences involving dishonesty should not exceed 50% was not followed, s 70 of VATA permitting reduction to such amount (including nil) as the commission should think proper.
[47] Following the recommendations of the Keith Report, s 13 of the 1985 Act introduced a penalty for evasion of VAT where it could be shown that a taxpayer's conduct involved dishonesty, the terms of which are now embodied in s 60 of VATA. Section 14 of the Finance Act 1986 introduced a provision allowing the recovery of the penalty from directors and managing officers where it could be shown that the facts giving rise to the penalty was attributable to their dishonesty. That is now s 61 of VATA. Section 8(1) of FA 94 introduced the power to issue a civil evasion penalty for evasion of excise duty involving dishonesty.
[48] Before us the parties have emphasised various features of the civil penalty code introduced by VATA. In the following list, the commissioners emphasise points (1) to (4), while the respondents emphasise points (5) to (10).
(1) Section 60(4)(a) of VATA expressly refers to 'an amount due by way of a civil penalty'.
700
(2) Such penalties were provided for as a deliberate decriminalisation of the VAT and duty penalty scheme.
(3) They are alternatives to criminal penalties which are available in more serious cases.
(4) The taxpayer is dealt with by means of a civil procedure, subject to the lower burden of proof (balance of probability) and avoids the stigma of a criminal conviction.
(5) The penalties require a finding of dishonesty.
(6) There is no ascertainable legal distinction or touchstone of liability as between treatment of a taxpayer under the civil penalty provisions of s 60 and his prosecution under s 72 of VATA. Despite the invitation of the court, neither counsel was able to think of circumstances (apart from the evidence necessary to satisfy the burden of proof) in which establishment of liability under s 60 could not equally suffice for a prosecution under the provisions of s 72.
(7) The distinction in application depends upon the discretion of Customs and Excise, which in turn depends upon internal criteria relating to the seriousness of the case, the availability of resources and the likelihood of obtaining a conviction in criminal proceedings, bearing in mind the different burden of proof.
(8) The function of the civil penalties is not compensatory. They are imposed in addition to the assessed liability for tax or duty and the interest recoverable thereon.
(9) The function of the penalties is one of punishment and deterrence vis-à-vis the individual taxpayer and general deterrence so far as taxpayers at large are concerned.
(10) The penalties (subject to mitigation) are substantial, being 100% of the tax evaded or sought to be evaded."
"VAT NOTICE 730 1 December 1994
Investigations: Statement of Practice
1. This notice explains what happens when the Commissioners of Customs and Excise investigate your VAT affairs under their Civil Evasion Penalty (CEP) procedure. It outlines the:
- Customs and Excise approach to reaching an agreement on the VAT underdeclared; and
- How you can lessen any penalty.
What is the law?
2. Under the VAT Act 1994 Section 60(1) a penalty may be imposed "in cases where:
a. for the purpose of evading VAT a person does any act or omits to take any action; and
b. his conduct involves dishonestly (whether or not it is such as to give rise to criminal liability)"
The penalty which the law imposes is an amount equal to the VAT evaded, but the Commissioners or a VAT Tribunal, have the power to mitigate (lessen) the penalty as they think proper.
The Commissioners will not normally order criminal proceedings where a person has been invited to co-operate but, where applicable, they reserve the right to do so.
What happens first?
3. The investigating officer will
- Interview you;
- Explain the CEP procedure; and
- Ask you to co-operate in establishing your true VAT liability.
The officer will explain why it is felt that any underdeclaration arises from dishonest conduct on your part, but will listen to any explanations that you, or your adviser, wish to give. If you have a satisfactory explanation for the discrepancy, a CEP will not apply.
How are penalties worked out?
4. They are a percentage of the tax evaded. (We hope that you will agree the amount of underdeclaration with the officer at an early stage, but you may dispute it to a VAT Tribunal or ask for a reconsideration by your local VAT office). In law, the penalty can be 100%, but if the arrears are agreed, it will be less than that.
The officer starts with a penalty figure of 100% of the tax alleged (or agreed) to be underdeclared. However, whilst in cases of dishonest evasion a penalty will normally be applied, you can considerably reduce this by the actions which you take during the investigation.
How can I reduce the penalty?
5. You can reduce the penalty significantly by promptly disclosing full details of your true VAT liability and by the extent to which you co-operate over the whole enquiry.
Disclosure
At interview an early and truthful admission of the extend of the arrears and why they arose will attract a considerable reduction.
Of course, a wide variety of circumstances is possible. The officer has to decide how much information you gave, how soon you gave it and how it contributed towards settling the investigation.
Co-operation
You can receive further major reduction if you:
- supply information promptly;
- attend interviews;
- answer questions honestly and accurately; and
- give the relevant facts to establish your true liability.
The Commissioners will consider the extent to which your co-operation has saved official time and resources, and the extent to which co-operation was possible when applying a penalty.
You may receive no penalty reduction at all if you:
- put off supplying information
- avoid attending interviews
- give untrue answers to questions
- do nothing until formal action is taken against you
- or generally obstruct the course of the investigation.
By how much can the penalty be reduced?
6. Reductions from the penalty figure will normally be made for three reasons, too the maximum percentages specified, as follows:
a. An early and truthful explanation as to why the arrears arose and the true extent of them-
up to 40%
b. Co-operation in substantiating the true amounts of arrears-
up to 25%
c. Attending interviews and producing records and information as required-
up to 10%
In most cases therefore, the maximum reduction obtainable will be 75% of the tax underdeclared. In exceptional circumstances however, consideration will be given to a further reduction, for example where you have made a full and unprompted voluntary disclosure, as in a. b. and c. above.
If there are any other matters whatsoever which you consider may affect the level of penalty, you should inform the officer accordingly.
What happens next?
7. When the arrears have been established and/or agreed, you will receive an assessment notifying the tax arrears and any interest chargeable. Subsequently you will receive a penalty assessment and a letter showing how much mitigation has been allowed.
What if I cannot pay?
8. It may be possible to pay by instalments. You will be expected to make a significant down payment, with the balance by agreed instalments over a short period.
Failure to pay may result in Civil Recovery Proceedings.
What if I do not agree with the arrears and/or penalty?
9. If you disagree with the tax assessment or penalty, you may ask the issuing office to reconsider the matter. If you are not satisfied with the outcome you have the right of appeal to a VAT Tribunal.
What if I am unhappy about the way the investigation has been conducted?
10.If at any time you are dissatisfied with the conduct of the investigation, you can complain to the Assistant Collector at you local VAT office, who will review the case as necessary. There is a Notice No 1000 which explains complaints procedures."
"2.2 Do I have to co-operate?
You are under no obligation to speak to the investigating officers or provide information. Any information you do provide may be used in assessing your liability to tax or to a penalty, should the evidence show that an offence has been committed. However it is a matter for you to decide whether or not you wish to provide information or respond to questions. If you are being interviewed you are free to leave at any time.
You should remember that the investigation is not being conducted with a criminal prosecution in mind. We may prosecute in the event of a false disclosure being made to the investigating officers, but will not use the information gathered in a civil investigation in a criminal prosecution of the same offence."
"[83] It appears that the inducement procedure, at least as refined in December 2000, makes explicit to the taxpayer, in addition to the information supplied in VAT Notice 730, that the civil evasion investigation is not being conducted with a view to prosecuting the trader for VAT evasion, that the trader is not obliged to co-operate in the Customs investigation, and it is entirely a decision for the trader to decide whether or not to speak to the investigating officer or assist generally in the Customs investigation. It must be remembered that the requirements of art 6(1) in relation to a fair trial, together with what has been held to be the implicit recognition of a right to silence and a privilege against self-incrimination, are of a general nature and are not prescriptive of the precise means or procedural rules by which domestic law recognises and protects such rights.
[84] It by no means follows from a conclusion that art 6 applies that civil penalty proceedings are, for other domestic purposes, to be regarded as criminal and, therefore, subject to those provisions of PACE and/or the codes produced thereunder, which relate to the investigation of crime and the conduct of criminal proceedings as defined by English law. Any argument as to whether and how far that Act and the codes apply is one which will have to be separately considered if and when it is advanced. In this context, however, the specific provisions of s 60(4) of VATA are plainly of considerable importance. I would merely add my view that, if matters are made clear to the taxpayer on the lines indicated at [83] above at the time when the nature and effect of the inducement procedure are also made clear to him (whether by VAT Notice 730 or otherwise), it is difficult to see that there would be any breach of art 6. It also seems to me that, even if PACE were applicable, it is most unlikely that a court or tribunal would rule inadmissible under ss 76 or 78 of that Act any statements made or documents produced as a result, at any rate in the absence of exceptional circumstances. On the other hand, it follows from this decision that a person made subject to a civil penalty under s 60(1) of VATA will be entitled to the minimum rights specifically provided for in art 6(3)."
To similar effect Mance LJ at paragraphs 88 and 89 said:
"[88] The classification of a case as criminal for the purposes of art 6(3) of the ECHR, using the tests established by the Strasbourg jurisprudence, is a classification for the purposes of the ECHR only. It entitles the defendant to the safeguards provided expressly or by implication by that article. It does not make the case criminal for all domestic purposes. In particular, it does not, necessarily, engage protections such as those provided by the Police and Criminal Evidence Act 1984. The submissions before us did not address this point, or, indeed, the subject of burden of proof (although I note that no objection was even raised to a civil burden in Georgiou's case). As Mr Stephen Oliver and Potter LJ have both observed, the precise implications under the ECHR of classification of any case as criminal for the purposes of the ECHR will have to be worked out on a case-by-case basis.
[89] The present decision might be thought to be detrimental to a sensible policy of decriminalisation, although any stigma which might attach to convention criminality has evidently been outweighed in the respondent taxpayers' thinking by the perceived benefits of protections afforded during investigation and determination of any claims to penalties. I think that it is perhaps unfortunate that the case law cited to us does not enable, and the present preliminary issue does not allow, any more detailed analysis or conclusions with respect to the effects of treating the present offences as criminal for convention purposes. But I remain to be convinced that our decision will seriously undermine or disrupt the general nature of existing procedures."
It is clear that all these observations were obiter.
"…you should be under no misapprehension that this means you are obliged to co-operate in our investigation. It is up to you to decide whether or not to speak to us or assist us generally in our investigation. Do you understand?"
"We're looking at this in a civil manner where it's not a criminal investigation… that we're looking at. You're more than welcome to leave any time you want to here… but if there has been an evasion of VAT and we find out that that is the case, then a penalty will look to a 100% can be levied, 100% of the amount evaded and with your co-operation that could be reduced down to 25%."
"18. Paragraph 33 [of the Decision] deals with my interview on 10 December 1998. At the time I understood the meaning of the significance of the Notice 730. I was not formerly cautioned. Mr Arifeen was present with me at the interview. I was happy for the interview to proceed, although I felt intimidated by the officers, and it was necessary for Mr Arifeen to interrupt the officers on a number of occasions. I felt under pressure at the interview (paragraph 49) as mentioned by Mr Arifeen in his submissions."
"[37] While we fully understand the importance of the Revenue being able to recover the tax owed to it and the value of the Hansard procedure in that regard, we are unable to accept the Revenue's submission. The statement of the Chancellor of the Exchequer made in Parliament on 18 October 1990 makes it quite clear that, while in cases of tax fraud the Revenue will be influenced by a full confession in deciding whether to accept a money settlement (including presumably an appropriate penalty), it gives no undertaking to do so or to refrain from instituting criminal proceedings. Tax fraud involves the commission of a 691 criminal offence or offences, so that it is in our view evident that the role of the SCO investigating tax fraud involves the investigation of a criminal offence.
[38] Although we recognise that a caution had not been administered in the past at a Hansard interview because such an interview has not been regarded by the Revenue as subject to Code C, in our judgment, that is to give too narrow an interpretation of the expression 'charged with the duty of investigating offences' in s 67(9) of the 1984 Act. The officers of the SCO were charged with investigating serious fraud and, since serious fraud inevitably involves the commission of an offence or offences, it seem to us to follow that they were charged with the duty of investigating offences.
[39] The purpose of Code C is to ensure that interviewees are informed of their rights, one of which is not to answer to questions, and to inform them of the use which might be made of their answers in criminal proceedings. It is clear from the parliamentary statement that the SCO had the possibility of criminal proceedings in mind in respect of the fraud about which they were asking questions and we can see no reason why the Revenue should not have cautioned taxpayers suspected of fraud before asking them questions in these circumstances. We cannot see why a caution should reduce the chances of a taxpayer making a full confession, which was the purpose of the process. However that may be, since the Revenue expressly reserved the right to prosecute for fraud, it appears to us that one of the purposes of asking the questions must have been the 'obtaining of evidence which may be given to a court in a prosecution', even if the Revenue's main aim was to arrive at a monetary settlement. question."
The third submission
Burden of proof
Standard of proof
Irrationality