Case No: CO/3312/2001
Neutral Citation EWHC 1852 (Admin) 
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, 
London, WC2A 2LL

Tuesday 29 July 2003
Before :

THE HONOURABLE MR JUSTICE McCOMBE

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Between :

	RORY KERR CARVILL	Claimant	
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	COMMISSIONERS of INLAND REVENUE	Defendants	

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(Transcript of the Handed Down Judgment of
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
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Miss E Gloster QC & Mr G Goodfellow QC (instructed by Slaughter & May) for the claimant
Mr R Singh QC & Mr H McKay (instructed by the Solicitor of Inland Revenue) for the defendant  

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Judgment
Mr Justice McCOMBE :

1.	This is an application for Judicial Review brought on the application of Mr. Rory Kerr Carvill (“Mr. Carvill”) against the Commissioners of Inland Revenue (“the Revenue”).  Mr. Carvill asks for the review of the Revenue’s refusal to repay the sum of £4,537,342.80 in respect of income tax and statutory interest said to have been wrongly paid to them by Mr. Carvill for the years of assessment 1987-88 to 1992-93 inclusive.  It is said that the decision is recorded in a letter of 21 May 2001 from a Mr. Waterson of the Revenue Solicitor’s Office to a Mr. John Kavanagh of Messrs. Tuson and Partners Limited (“Tusons”).  The Revenue say that the relevant decision was actually made on or about 28 July 2000.  No point was taken by the Revenue at the hearing before me that the claim is brought out of time.  However, if the decision was taken at the earlier date then it is common ground that no point can arise under the Human Rights Act 1998.  If, however, the later date applies then a point under the 1998 Act may arise.  I return to this in due course.
2.	In short, the problem is that by a decision made on 8 December 1994 by  a Commissioner for the special purposes of the Income Tax Acts (Mr. T.H.K Everett) an appeal by Mr. Carvill against assessments made under Section 739 of the Income and Corporation Taxes Act (“ICTA”) 1988 was dismissed.  Following that decision, Mr. Carvill paid the tax so assessed.  Similar assessments were raised against Mr. Carvill in later years of assessment, namely 1993/4 to 1995/6 inclusive.  Mr. Carvill appealed against those assessments also.  Those appeals were heard before a different Commissioner, Dr. J. Avery-Jones CBE, who allowed the appeals by a written decision of 20 March 2000. Both appeals were concerned with the same underlying transactions but the evidence surrounding them, which was before Mr. Everett and Dr. Avery-Jones respectively, was different.  In subsequent years although relevant income has arisen, the Revenue have not assessed Mr. Carvill to tax upon it under Section 739.  Mr. Carvill says that Dr. Avery-Jones’s decision was right and that of Mr. Everett was wrong and the Revenue should repay to him the tax paid under the original assessments.  The years of assessment covered by Mr. Everett’s decisions have been called “the Earlier Years”; those covered by Dr. Avery-Jones’s decisions have been called “the Later Years” and the years thereafter have been called “the Future Years”.  I adopt those terms in this judgment.  I shall call Mr. Everett’s decision “the First Decision” and Dr. Avery-Jones’s decision “the Second Decision”.
3.	On 7 June 2000, Tusons, taxation consultants for Mr. Carvill, wrote to the Revenue stating that they assumed that arrangements would shortly be made for the tax paid in respect of the Earlier Years (and interest) to be repaid, together with repayment supplement.  On 19 June 2000 the Revenue asked for an explanation of why such an assumption was being made.  Correspondence ensued and it became clear that the Revenue did not accept any such obligation to repay the tax paid in respect of the Earlier Years.  As already indicated there is a dispute about when the decision not to repay was made.
4.	It may be that Mr. Carvill considered that repayment had been refused at latest by 28 March 2001 when he began proceedings against the Revenue in the Chancery Division claiming repayment of the tax for the Earlier Years and interest.  On the other hand it, may be that the proceedings so issued were designed initially as protection against any limitation point.  There is no need to say more about this.  The claim began in the Chancery Division has been called (and is called here) “the Restitution Claim”.  The Claim Form in these proceedings was issued on 20 August 2001.  That claim has been and is called “the Judicial Review Claim”.  By an Order of Mr. Justice Burton dated 11 January 2002, 14 preliminary issues were ordered to be determined in both sets of proceedings.  Those preliminary issues came before Mr. Justice Hart between 11 and 14 June 2002 and were resolved (so far as that learned judge considered appropriate) by a judgment delivered on 24 July 2002.  As a result, the Restitution Claim was struck out by an Order drawn up on 17 September 2002.  The remainder of the Judicial Review Claim is now before me.
5.	 On each of the two appeals by Mr. Carvill against the Revenue’s assessments the central issue for determination was whether Section 739 of ICTA 1988 applied.  The relevant provisions of the legislation are set out in paragraph 7 of Mr. Justice Hart’s judgment and I do not repeat them.  Similarly, the “skeletal form” of the transactions at which the assessments were directed are set out in paragraph 9 of the same judgment.  For present purposes, I gratefully adopt Mr. Justice Hart’s summary.
6.	As already stated, the Restitution Claim has been struck out and there is no appeal from that order.  Accordingly, it is now clear that there is no “private law” claim available to Mr. Carvill for repayment of the tax paid for the Earlier Years.  In these proceedings, however, Mr. Carvill contends that the Revenue’s decision not to repay, even in the absence of any private law obligation to do so, is “irrational”, “unfair” and an “abuse of power”.  Therefore, it is submitted that in public law, the Revenue is obliged to make the repayment sought.
7.	The basis of this claim can be summarised by reference to paragraph 7 of the written argument by Miss Gloster QC and Mr. Goodfellow QC who appeared for Mr. Carvill. 
“(1)  Mr. Carvill pursues his claim for repayment of 100% of the tax and interest for the earlier Years on the basis of  the disparity of treatment accorded to Mr. Carvill as compared with the Revenue’s practice of repaying tax paid under assessments which have become final and conclusive when a subsequent decision reveals that those assessments may have been erroneous.
(2)  Mr. Carvill pursues a claim, in the alternative of 41% of that same tax and interest on the basis of certain assumptions made in respect of the preliminary issues and, in particular, that the assessments were contrary to the Revenue’s then unpublished practice and/or understanding of the law to the extent that the assessments sought charge Mr. Carvill on income which was attributable to the “Old Minority Shares”, unless it can be established that Mr. Carvill processed the transfer of those shares by the relevant shareholders.  In this respect, it is said that the Revenue’s officers having conduct of the first appeals knew or ought to have known
a) the practice;
b) that there was no allegation that Mr. Carvill had procured the transfer of those shares;
c) that Mr. Carvill and his advisers were or were unlikely to be aware of the practice.
(3)  Further, Mr. Carvill contends that the Revenue’s failure at the time of the first appeals to inform Mr. Carvill of the practice mentioned in (2) above or to apply it before  agreeing the income assessable at that time has resulted in inconsistent treatment of Mr. Carvill compared with other taxpayers”.
8.	In support of these claims Mr. Carvill relies upon the “care and management” powers conferred upon the Revenue under Section 1 of the Taxes Management Act 1970 (“TMA 1970”).  He submits that, if there is no justification or no rational justification for the treatment of a taxpayer in the manner in which the Revenue’s care and management powers are exercised towards him, that is “unfair” in the public law sense and an abuse of power.  These concepts, submits Miss Gloster, are not to be applied too rigidly.  Those submissions were addressed in particular in response to submissions of Mr. Rabinder Singh QC (with whom Mr. Hugh McKay appeared) for the Revenue that this Court is not a Court of Appeal on the merits of a public authority’s decisions.  Mr. Singh submits that this is not an area where the Revenue has an open ended discretion; its primary duty is to collect what Parliament says is payable, subject to limited powers of “care and management”.
9.	Mr. Singh took me to the summary of past authority on the ambit of the Court’s powers of  judicial review given by Lord Lowry in R v Secretary of State for the Home Department ex p. Brind [1991] 1 AC 696 at p. 764 – 766C.  I confine myself to the quotation of the passage between 765D and H. 
“ …. I believe that the subject is nowhere better discussed than by Sir William Wade in chapter 12, “Abuse of Discretion,” of his authoritative textbook, Administrative Law, 6th ed. (1988), pp. 388-462.  The author, with the aid of examples covering more than a century, clearly demonstrates that what we are accustomed to call Wednesbury unreasonableness is a branch of the abuse, or misuse, of power: the court’s duty is not to interfere with a discretion which parliament has entrusted to a statutory body or an individual but to maintain a check on excesses in the exercise of discretion.  That is why it is not enough if a judge feels able to say, like a juror or like a dissenting member of the Cabinet or fellow-councillor, “I think that is unreasonable; that is not what I would have done.”  It also explains the emphatic language which judges have used in order to drive home the message and the necessity as judges have seen it, for the act to be so unreasonable that no reasonable minister etc. would have done it.  In that strong, and necessary emphasis lies the danger.  The seductive voice of counsel will suggest ( I am not thinking specifically of the present case) that, for example, ministers, who are far from irrational and indeed are reasonable people , may occasionally be guilty of an abuse of power by going too far.  And then the court is in danger of turning its back not only on the vigorous language but on the principles which it was intended to support.  A less emotive but, subject to one qualification, reliable test is to ask, “Could a decision-maker acting reasonably have reached this decision?”  The qualification is that the supervising court must bear in mind that it is not sitting on appeal, but satisfying itself as to whether the decision-maker has acted within the bounds of his discretion. …”       
10.	Miss Gloster was content with the application to this case of that question posed by Lord Lowry at 765H (quoted above).  However, she wished to temper that with the references to the concept of “unfairness” referred to in particular by Lord Scarman in IRC v National Federation of Self Employed etc. Ltd. [1982] AC 617, 651 and in IRC v Preston [1985] 1 AC 835, 851-852 and by Lord Templeman in the same case at p.862-867 (especially at pp. 864D-G and 866H-867C.)  I quote from the last two of these passages:
“… a taxpayer cannot complain of unfairness, merely because the commissioners decide to perform their statutory duties including their duties under section 460 to make an assessment and to enforce a liability to tax.  The commissioners may decide to abstain from exercising their powers and performing their duties on grounds of unfairness but the commissioners themselves must bear in mind that their primary duty is to collect, not to forgive taxes.  And if the commissioners decide to proceed the court cannot in the absence of exceptional circumstances decide to be unfair that which the commissioners by taking action against the taxpayer have determined to be fair.  The commissioners possess unique knowledge of fiscal practices and policy.  The commissioners are inhibited from presenting full reasons to the court for their decisions because of the duty of confidentiality owed by the commissioners to each and every taxpayer. 
The court can only intervene by judicial review to direct the commissioners to abstain from performing their statutory duties or from exercising their statutory powers if the court is satisfied that “the unfairness” of which the applicant complains renders the insistence by the commissioners on performing their duties or exercising their powers an abuse of power by the commissioners. … ”
[1985] 1 AC at p. 864
“… In principle I see no reason why the appellant should not be entitled to judicial review of a decision taken by the commissioners if the decision is unfair to the appellant because  the conduct of the commissioners is equivalent to a breach of contract or  a breach of representation.  Such a decision falls within the ambit of an abuse of power for which in the present case judicial review is the sole remedy and an appropriate  remedy.  …”
[1985] 1 AC at p. 866H-867A
Mr. Singh further relied on the following passage in the judgment of Judge J (as he then was) in R v CIR ex p. MFK Underwriting Agencies Ltd (1989) 62 T.C. 607 at p. 647 E-G.
“There is a detailed procedure for resolving disputes between the Inland Revenue and the taxpayer and if necessary for bringing such disputes to the courts for decision.  In addition, however, as the Inland Revenue is an “administrative body with statutory duties” (per Lord Wilberforce in Regina v Commissioners of Inland Revenue ex parte National Federation of Self Employed at page 632) it is not immune from an order for judicial review.  Since the decision in the House of Lords in Regina v Commissioners of Inland Revenue ex parte Preston [1985] AC 835 the principle has been established that acts which are an abuse of the Inland Revenue’s powers or acts done outside those powers may be subject to judicial review.
Abuse of power may take the form of unfairness.  This is not mere “unfairness” in the general sense.  Even if “unfair”, efficient performance of the statutory obligations imposed on the Inland Revenue will not, of itself, amount to an abuse of power”
Miss Gloster points out that this was said in a “legitimate expectation” case and not one dealing with the review of a decision upon grounds such as those alleged here.  However, the statement is, in my view, of assistance in considering questions of unfairness and abuse in a case where the “detailed procedure” has been involved and applied on two occasions as here.
11.	Finally, in this short review of the authorities in this area, I must mention R v IRC, ex p. Unilever plc [1996] STC 682, which was relied upon by both sides.  The case concerned the tax affairs of  a large group of companies where the practice had grown up for the group companies to provide to the Revenue a schedule designed to show their likely taxable profits in any particular year.  They did so by deducting trading losses from profits of the current year.  They did not state expressly that such losses had been deducted nor did they make an express claim to loss relief under Section 393 of ICTA 1988.  On many occasions the computations had been submitted outside the period in which loss relief should have been claimed, but the Revenue did not reject those claims.  After a change of personnel within the relevant Revenue department, the Revenue did reject loss relief claims for three accounting periods since they were submitted outside the statutory time limit.  The result was that £17 million in additional tax became technically due. 
12.	In the course of his judgment in the Unilever case Sir Thomas Bingham MR (as he then was) said that he accepted “almost all” of the following propositions advanced for the Revenue by Mr. Moses QC (as he then was) in the resulting judicial review claim:
“… (i) The Revenue’s public duty is to collect taxes imposed by Parliament in accordance with the will of Parliament.  A taxpayer’s entitlement to deduct trading losses from same-year profits is not absolute: it is subject to the making of a claim within the statutory time-limit.  It is not for the Revenue, or the taxpayer, or the courts to override a clear statutory time limit on the ground that it is unnecessary or merely regulatory.
(ii) There was no clear, unambiguous and unqualified representation by the Revenue, oral or written, such as was held to be necessary in R v IRC, ex p MFK Underwriting Agencies Ltd [1989] STC 873, [1990] 1 WLR 1545 before it could be held unfair for the Revenue to do its duty.  The Revenue’s conduct, on 30 occasions over 20 years, could not be relied on as making such a representation.  In any event, the conduct relied on was silence and inaction, in failing to point out and disallow late claims, and in private law such conduct would not found an estoppel unless there was a duty to speak, which here there was not.
(iii) If the Revenue were to be held to have acquiesced in or waived any failure by Unilever to comply with the time limit for making loss-relief claims, it had to be shown that it had done so knowingly.  It could not acquiesce in or waive any non-compliance of which it was unaware.  Here the evidence was that on 30 critical occasions the Revenue had simply failed to notice that the claim was late.  It was clear on the evidence that the Revenue had followed no settled policy or practice of accepting late claims.
(iv) ‘Unfairness’ in public law is not used in a loose general sense (see MFK Underwriting [1989] STC 873 at 895, [1990] 1 WLR 1545 at 1573 per Judge J).  Where substantive unfairness is alleged, it is necessary to show a recognised form of unfairness, such as departure from a ruling on which the taxpayer has relied or inconsistency prejudicial to the taxpayer (cf HTV Ltd v Price Commission [1976] ICR 170).  The ‘court cannot in the absence of exceptional circumstances decide to be unfair that which the commissioners by taking action against the taxpayer have determined to be fair’ (see Preston v IRC [1985] STC 282 at 293, [1985] AC 835 at 864 per Lord Templeman)”.
(It perhaps should be explained that the Master of the Rolls did not identify which of the “almost all” he did not accept!)
13.	Notwithstanding the acceptance of “almost all” of these points, Sir Thomas Bingham pointed out ten factors which made the case unique so as to make the refusal of relief so unreasonable as to be irrational.  In particular, Miss Gloster points to the last of these factors:
“(10) On an objective but untechnical view, it would be hard to regard Unilever as owing £17m additional tax to the Revenue.  If this tax is due it can fairly be regarded as an adventitious windfall, accruing to the Revenue through the understandable error of an honest and compliant taxpayer, cleared over many years by the Revenue.”
Sir Thomas opined that the ten factors, cumulatively persuaded him that on the unique facts of that case the application for judicial review should succeed.  His judgment also included the much cited sentences, “The threshold of public law irrationally is notoriously high” and “… in all save the most exceptional circumstances the Revenue are the best judges of what is fair”.  I was also grateful for the following distinction drawn by Simon Brown LJ in the Unilever case  (at p.695) which he described as “… determining the border between on the one hand mere unfairness – conduct which may be characterised as “a bit rich” but nevertheless understandable – and on the other hand a decision so outrageously unfair that it should not be allowed to stand”.
14.	Mr. Singh argued that Mr. Carvill could only argue the present application on very limited grounds because of the effect of Mr. Justice Hart’s decision on the preliminary issues.  I shall return to that submission hereafter.  However, I think it is easier initially to look at Miss Gloster’s argument untrammelled by any such alleged limitation.
15.	Miss Gloster’s fundamental point was that the chargeability to tax under S.739 rested on the same transactions and the same underlying facts in all the years of assessment whether the Earlier Years, the Later Years or the Future  Years.  The transactions were the same and so was Mr. Carvill’s purpose in participating in them.  There could not logically be two different answers to the question.  Therefore, it behoved the Revenue, after the Second Decision, to examine for itself the underlying circumstances and to consider the evidence founding each Decision.  It was necessary for them to consider whether Mr. Carvill was honest in identifying his true purpose in the transactions or whether he was not.  To do that it was necessary to consider the evidence in the case and to compare the respective merits of the two decisions.  However, she submits that, when one examines the internal documents produced, they show that the Revenue did not come to any view at all on the underlying facts, including the credibility of witnesses where necessary.
16.	In reply, Miss Gloster formulated the “unfairness” alleged as follows.  It was a failure to give any or any proper consideration as to whether it would be fair to Mr. Carvill, in the light of the Second Decision, to repay him in respect of the Earlier Years.  The Revenue did not even consider the further evidence.  There was an obsessional reliance upon the technical finality of the First Decision.  The First Decision was, as Mr Justice Hart called it, a “datum” (page 34).  The unfairness was not merely that there was no consideration of the relative merits of the two Decisions but also there was no consideration of the evidence relied upon in the Second Decision.  Moreover, there was no consideration of the tension between (on the one hand) thinking it was “unfair” to make Mr. Carvill  litigate for the Future Years and a refusal to repay in respect of the Earlier Years.
17.	The evidence discloses that upon receipt of the request for repayment in respect of the Earlier Years various officials in the Revenue were consulted and gave their views.  It is true that the recorded views suggest that those officials did not seek to “weigh” the merits of the two Decisions.  Various points of policy are set out by those officials for consideration by the relevant decision maker who was Mr. Gabriel Makhlouf , the Revenue’s Director of Revenue Policy International, who has made a witness statement in these proceedings.  He also produces the internal documents which record the various officials’ views in the manner that I have mentioned.
18.	Miss Gloster’s approach was to suggest deficiencies in the arguments put forward by the various officials and to argue that some of the points made were “wrong” or unjustified in some other way.  However, it seems to me that such documents were only contributions to internal discussions provided to Mr. Makhlouf to enable him to reach a decision. In his witness statement Mr. Makhlouf summarises the points that were considered and says that he took the decision to refuse repayment on the grounds set out in a letter of 28 July 2000 from the Revenue’s solicitor to Tusons.  The letter reads as follows:
“My clients have now given careful consideration to your letter of 5 July.  They are not persuaded that Mr Carvill is entitled to the repayment claimed.
The Inland Revenue does not share your interpretation of the decision of Dr Avery Jones.  Dr. Avery Jones had no jurisdiction to find that the conclusion reached by Mr Everett in the early appeals was wrong, and he did not purport to make such a finding.  He made different findings of fact (and having done so referred to several advantages he had over Mr Everett, including access to many of  Mr Tuson’s documents, the benefit of hearing more witnesses, and the benefit of an extremely detailed cross-examination) but Dr Avery Jones did not suggest that Mr Everett was not entitled to make the findings he did on the evidence adduced before him.
For its part, the Inland Revenue may not agree with Dr Avery Jones’s findings, but that is beside the point.  It is Parliament that has laid down the procedures for ascertaining the facts in disputed cases and the correct amount of tax payable by taxpayers.  Those procedures include a right of appeal which Mr Carvill exercised in respect of two different sets of assessments.  The Inland Revenue is bound by the result of both sets of appeals, because Parliament provided that an appeal was the only route by which the question whether an assessment was correct or in correct might be answered.
It follows that your statement that the earlier decision “retains no vestige of credibility whatsoever” is misconceived, and it is not accepted that you have shown by reference to subsequent events or otherwise that the tax assessed on Mr Carvill under section 739 for the 1987/8 to 1992/3 years has never been due.
You have referred to the treatment accorded to certain closed cases following the House of Lords decision in the Willoughby case.  The Press release of 18 December 1997 which followed that case made clear that the Inland Revenue would meet claims to repayment in respect of personal portfolio bond cases affected by the House of Lords’ decision, where those cases had become final on or after 16 December 1994 (the date of the Court of Appeal decision in the Willoughby case), where repayment would be in accordance with published Inland Revenue practice (see the Inspectors Manual at paragraph 5044).  The Inland Revenue also announced that, in the exceptional circumstances of that matter, including the particular handling in the past of individual cases, it would consider any repayment application for any other personal portfolio bond case affected by the House of Lords’ decision which has become final before 16 December 1994.  The Press Release of 18 December 1997 related solely to the judgment of the House of Lords in the Willoughby case, and my clients consider that there are significant distinctions between Mr Carvill’s case and those cases falling within the scope of the treatment outlined in the Press Release.
You referred also to the practice known as “equitable liability” but I do not understand you to say that the practice applies to your client.  Clearly it does not, nor does the Inland Revenue accept that the practice should extend to him.
The Inland Revenue does of course want taxpayers to pay the right amount of tax.  However, The Special Commissioners have determined the right amount of tax due from Mr Carvill and my clients do not accept that the circumstances of his case justify them in making a repayment to Mr Carvill of tax paid in accordance with the determination of Mr Everett”. 
19.	The references to the “Willoughby decision” and to “equitable liability” require some further examination.
20.	The “Willoughby decision” was that of the House of Lords on 10 July 1997 in IRC v Willoughby [1997] 1 WLR 1071 concerning a type of life insurance known as a “personal portfolio bond” (PPB).  It was a case where the Revenue had assessed the taxpayer under S.739.  The decisions throughout the litigation were consistently in favour of the taxpayer.  On 18 December 1997 the Revenue issued a Press Release  indicating that, “in the exceptional circumstances of this matter”, it would make certain re-payments to taxpayers on the basis of the decision.  Included in these cases were ones where assessments to tax had become final and, therefore, tax became technically due, whatever arguments might have been raised in the past along the lines of the successful arguments in Willoughby.
21.	The reference to “equitable liability” is to a principle, which originally grew up in relation to insolvency matters, where a preferential revenue claim, based on estimated assessments, might prove “inequitable” to other creditors in an insolvency when such assessments were based upon an “excessive” claim as to the true profits of the insolvent person or company.  The Revenue issued a Bulletin indicating that it may be prepared to consider applying this principle 
“where circumstances of the case and in the light of all the evidence, it is clearly demonstrated that:
-	the liability assessed is greater than the amount which would have been charged had the returns, and necessary supporting documentation, been submitted at the proper time, and
-	acceptable evidence is provided of what the correct liability should have been.
In such cases the Inland Revenue may be prepared to accept a reduced sum based on the evidence provided, and not to pursue its right of recovery for the full amount”. (See Tax Bulletin – TB18N.)
22.	Against Miss Gloster’s arguments, Mr. Singh raised what he called his “Core Submissions”.  There were eight of these.  Six of them addressed the points to which I have so far referred.  The first four related to Miss Gloster’s contention that the Revenue were bound (after the Second Decision) to investigate the two Decisions and to decide which was “correct”.  The fifth submission was directed to “equitable liability” and the sixth to the “Willoughby” analogy.  The seventh submission was directed to the question of what would have been the result had the decision been reversed and Mr. Carvill had won the first appeal but had lost the second.  (Was it right that, on Mr. Carvill’s argument, there was a “one way street” in favour of the taxpayer?)  The eighth submission was “conclusory” (in Miss Gloster’s word) : a submission that, in all the circumstances, the Revenue’s decision was not irrational.
23.	Mr. Singh argued (1) that the Revenue does not have to choose which Decision is to be regarded as “correct” (and it would arguably be wrong to do so in the face of a judicial decision); (2) that the question of what is chargeable is answered by Section 739, and by the fact that Mr. Carvill did not (for the Earlier Years) discharge the burden under Section 741; (3) that it is not unlawful in public law terms to refuse to repay a liability determined by judicial decision, provided that (a) the Revenue is prepared to consider what Mr. Carvill had to say in seeking a departure from the normal position and (b) the refusal to do so was rational in the public law sense; and (4) that the mere fact that the Revenue has a discretion to depart from the normal position, and has a policy that it will do so in other circumstances, does not mean that it must depart from that position in the present case.
24.	So far as the Future Years are concerned and the Revenue’s decision not to raise assessments in respect of them, Mr. Singh submits that the Revenue is entitled to take a pragmatic decision.  He supports this by reference to paragraphs 45 and 46 of the judgment of the Court of Appeal (delivered by Lord Phillips of Worth Matravers MR) in R (Wilkinson) v Commissioners of Inland Revenue [2003] EWCA 814, to the following effect: 
“45.  It seems to us that the effect of these authorities is plain.  One of the primary tasks of the Commissioners is to recover those taxes which Parliament has decreed shall be paid.  Section 1 of the 1970 Act permits the Commissioners to set about this task pragmatically and to have regard to principles of good management.  Concessions can be made where those will facilitate the overall task of tax collection.  We draw attention, however, to Lord Diplock’s statement that the Commissioners’ managerial discretion is as to the best manner of obtaining for the national exchequer the highest net return that is practicable.
46.  No doubt, when interpreting tax legislation, it is open to the Commissioners to be as purposive as the most pro-active judge in attempting to ensure that effect is given to the intention of Parliament and that anomalies and injustices are avoided.  But in the light of the authorities that we have cited above and of fundamental constitutional principle we do not see how section 1 of the TMA can authorise the Commissioners to announce that they will deliberately refrain from collecting taxes that Parliament has unequivocally decreed shall be paid, not because this will facilitate the overall task of collecting taxes, but because the Commissioners take the view that it is objectionable that the taxpayer should have to pay the taxes in question.”
25.	I consider these submissions of Mr. Singh are essentially correct.  In both law and administration the question of “proper tax” liability does not exist in a vacuum.  It exists in a framework of machinery for the assessment of tax and the judicial determination of disputed fact and law.  This is the “detailed procedure” referred to by Judge J in the MFK case (supra).  It is not simply as a matter of law that this procedure exists.  As a matter of good administration the Revenue have to bear in mind that factual disputes are, where necessary, determined for separate years of assessment by statutorily constituted judicial tribunals.  It is not for the Revenue (as a matter of administration) to “second guess” the determination of such disputes after the event.  It is particularly inappropriate for an administrative body to “second guess” determinations where they turn upon matters of credability and assessment of witnesses.  By definition it is not open to such a body to assess all the evidence (as it is submitted the Revenue should have done here) for the simple reason that not all the evidence, available to each Commissioner, would be available to Revenue officials. For example, the Revenue would not see and hear the witnesses called before the Special Commissioners. 
26.	In contrast to ordinary civil litigation there is no “issue estoppel” in relation to the factual matters decided in separate years of assessment.  This exceptional principle can operate in favour of either party in different years.  However, in my view, it must be part of good administration in Revenue practice for the Revenue to collect in accordance with judicial decisions as to chargeable transactions and in accordance with the constitutional principle identified in Wilkinson’s case (supra).  However, “obvious” it may seem to one official or group of officials that one judicial decision is better grounded on the evidence than another, I cannot see that it is part of that official’s or those officials’ normal functions to reject one such decision in favour of another in the face of the machinery laid down by Parliament for determination of such matters in separate years of assessment.
27.	This is not a case like Unilever (supra) where an administrative decision has created an unjust windfall liability, contrary to a previous administrative practice.  In this case, the Revenue (administratively) considered that the charge had arisen.  A burden was put upon the taxpayer to rebut the chargeability.  That was not done to the satisfaction of the Revenue and Mr. Carvill exercised his statutory right to appeal, invoking the Special Commissioners’ process of  review under Section 741.  This was not a case where the Revenue is being asked to reverse a previous administrative decision of its own; it is being asked to repay tax found due and payable after final judicial determination and abandonment by Mr. Carvill of a further appeal to the High Court. 
28.	As the Revenue argued in its initial written submissions to me (paragraph 22), there is no irrationality in the Revenue’s position from the administrative point of view.  Those with the functions of making final decisions of fact have performed those functions on the differing evidence produced to each of them.  Mr. Carvill decided to discontinue his appeal against the First Decision and the Revenue decided there was no point of law that could be argued on an appeal against the Second Decision.  Both those decisions to litigate no further were no doubt entirely rational.  In considering the Future Years the Revenue is entitled to decide whether it is likely to prevail  before Special Commissioners or not and whether the point should be litigated for a third time.  On that they are entitled to take the pragmatic view mentioned by the Master of the Rolls in Wilkinson.
29.	Having regard to paragraphs 20 to 24 above, it is not necessary to decide whether Miss Gloster’s argument is properly to be limited by the judgment of Mr. Justice Hart.  However, I think that Mr. Singh is right to submit that the learned judge did decide that issue against Mr. Carvill so far as it related to the effect of the Second Decision and the Revenue’s decision in the light of it, not to raise assessments for the Future Years.  Mr. Justice Hart had before him Issue 6, which was formulated as follows :
“ 6. Can the Defendant rely upon the terms of the First Decision as a complete defence to the Claim for judicial Review seeking recovery of the full amount of the sums paid by the Claimant in respect of the Defendant’s claim for income tax and statutory interest for the Earlier Years.
That question was answered “Yes” in the learned judge’s order on the preliminary issues, paragraph 3 and the Schedule.  That issue was, however, based upon certain assumptions of facts which were those made upon Issue 2 (the Restitution Claim), (paragraph 11 of the learned judge’s judgment) and the additional two assumptions identified for Issue 6 itself.  Of particular importance in the present matter are Assumptions 2.5 and 6.1.  They are in the following terms:
“ 2.5  No appeal has been entered against the Second Decision and  the chargeability of the Claimant to income tax for years of assessment falling after the Later Years had been determined upon the basis that Section 741 applies to the same transfer of assets and associated operations relied upon by the Defendants in support of their claim to tax and interest for the Earlier Years”.
“ 6.1  The Defendants have not appealed against the Second Decision and are acting for future years upon the basis that the Second Decision was correct in relation to the application of Section 741 to the transfers of assets and associated operations relied upon by the Defendants in support of the income tax charge for the Earlier Years” (underlining added by me).
30.	Mr. Justice Hart decided that the fact of the First Decision alone did not make it impossible for Mr. Carvill to advance a case that the Defendants, in exercising their discretion to refuse to repay have failed to apply their minds to the considerations which they ought to have had in mind in exercising the discretion.  He said the First Decision was a “datum”.  However, he further decided that, given the assumptions that he was asked to make, including the two that I have quoted above (and only those assumptions) the Judicial Review Claim must necessarily fail.  He reached that decision on the following basis:
“ … On those assumptions the only matters which the Claimant can pray in aid as supporting the heavy charge of irrationality are in essence the fact that Special Commissioner Avery-Jones CBE came to the decision on the evidence before him (which was additional and different to that which had been before Special Commissioner Everett) that the relevant transactions on which the assessments for all the years had been based were bona fide commercial transactions not designed for any tax avoidance purpose, and the fact that in the light of that decision and that evidence the Defendants have decided not to make assessments in respect of  the future years.  While I can see that on those facts it may be open to the Defendants to consider whether or not to forgive the liability to tax established by the First Decision, and that a refusal by them to give that question any consideration might be reviewable, I cannot see how it can be said that it is necessarily irrational for the Defendants, by reference to those facts alone, to have decided after consideration not to forgive the liability.  In that sense the First Decision can be relied upon as a complete defence to the Claim for Judicial Review”. (Underlining added by me.)
31.	In other words two of the “facts” by reference to which it was not necessarily irrational to have decided, after consideration, not to forgive the liability was the fact of the Second Decision and the fact that the evidence before Special Commissioner Avery-Jones was additional and different to that which had been before Special Commissioner Everett.  It is clear from the letter of 28 July 2000, referred to by Mr. Makhlouf  as setting out the reasons for his decision, that one of the matters which he had considered was that Dr. Avery-Jones “had made different findings of fact (and having done so referred to several advantages he had over Mr. Everett, including access to many of Mr. Tuson’s documents, the benefit of having more witnesses, and the benefit of an extremely detailed cross-examination)”.  On these assumptions, the Second Decision and the evidence before Mr. Everett and Dr. Avery-Jones) had, therefore, been considered by the Revenue.  After that consideration repayment was refused for the reasons given in the letter.  For the reasons I have endeavoured to state, therefore, in so far as the Revenue’s decision was based upon the contrasting Decisions of the Commissioners and the contrasting evidence before them, I consider (adopting the words of Simon Brown LJ) that the decision not to repay was neither “a bit rich” nor ( a fortiori) “so outrageously unfair that it ought not to stand”.
32.	So far I have examined the case based simply upon the contention that it behoved the Revenue to re-assess the factual decisions of the two Commissioners on their merits and that they failed aadequately to do so in reaching their own decision.  In the end, I consider that that contention fails both for the reasons identified in paragraphs 20 to 24 above and also because the matter was decided against Mr. Carvill by Mr. Justice Hart.  However, Mr. Justice Hart envisaged that there might be other factual matters that would emerge from the Judicial Review Claim which were not among the assumptions made before him.  Mr. Singh conceded that the “Willoughby” point was one such matter.  I agree.  Further, there is Mr. Carvill’s point on “equitable liability” which does not seem to have been before Mr. Justice Hart either.
33.	Miss Gloster submitted that the decision made by the Revenue following the Willoughby case was analogous to this one.  In particular, she submitted that, pursuant to the policy set out in the Press release, the Revenue had re-opened assessments, which had become final, in the interests of treating individual taxpayers consistently over different years of assessment.  She argued that what Mr. Carvill is asking for here is similar consistent treatment over different years of assessment.
34.	In response to this point, Mr. Singh submits (as stated in the Revenue’s letter of 28 June 2000) that there was a substantial difference between the present matter and the decision taken following Willoughby.  First, Willoughby was a decision of the House of Lords on a point of law.  There was no question of fact involved.  Secondly, the policy following Willoughby had to be made in relation to a parcel of different types of case.  Thirdly, in some cases, there had been a history of mishandling by the Revenue and, in some, the evidence showed that it was not clear to Revenue officers dealing with the aftermath of Willoughby what precisely had been done in the past in the Revenue department concerned.  On its facts, therefore, the post-Willoughby decisions were taken in a different and more difficult situation involving many taxpayers.  Thus, submitted Mr. Singh, the policies in the Willoughby case were applied to taxpayers who had entered into similar transactions.  The circumstances had nothing to do with Mr. Carvill’s case.  I agree.
35.	I have set out above the salient features of the “equitable liability” policy.  This again deals with a situation different from the present.  It is explained in the Revenue’s letter of 28 July 2000.  It is concerned with the administrative raising of estimated assessments which therefore become final after the expiry of statutory time limits.  The policy deals with cases where the Revenue are prepared to re-open such assessments even where all avenues of appeal have become time-barred.  It is not dealing with cases where a right of appeal has been exercised and the taxpayer’s liability has been determined by judicial process.  In my view, it has no relevance to this case.  Certainly, the Revenue’s decision to reject a request for re-payment, based in part upon it, cannot be characterised as irrational.
36.	I must turn now to the question of the “one way street” in favour of the taxpayer.  Does Mr.Carvill’s contention mean that only the taxpayer can benefit.  Is there a lack of “symmetry” between the Revenue’s position and that of a taxpayer in similar circumstances?  On the evidence, it seems that such considerations were put forward by Revenue officials when Mr. Carvill’s request for repayment was being considered.  It is mentioned as one of the considerations by Mr. Makhlouf in paragraph 7 of his witness statement, but it is not raised in the letter of 28 July 2000, which Mr. Makhlouf says sets out the reasons for his decision.
37.	I was provided by Miss Gloster and Mr. Goodfellow with a very helpful note upon the Revenue’s power to raise “Discovery Assessments”, under Section 29(3) of the TMA 1970, where new information comes to light.  In the ordinary case, at the time, such assessments were subject to a 6 year time limit from the end of the chargeable period to which the assessment relates: section 34 of the 1970 Act.  In cases of fraud or negligence that period rises to 20 years: see Section 36.  On this basis there was a primary time limit of six years which would have precluded the Revenue in 2000 from re-opening the Earlier Years unless there was fraud or negligence.  It is submitted for Mr. Carvill that, on the present hypothetical facts, negligence at least would have been open for argument.  It is argued that the taxpayer, against whom an assessment has become final, has no right to reclaim overpaid tax unless the assessment was excessive by reason of some error or mistake in a return: Section 33 of the 1970 Act.  An error in failing to challenge a proposition of fact or law put forward by the Revenue would not qualify for relief.  No relief is available if the point said to be an error or mistake has been the subject of a determination by the Commissioners or an agreement under section 54 of the Act.  In any event, the claim must be made within six years.
38.	In the present case, apart from a complaint about late identification of the nature of the Revenue’s case at the time of the first appeal, neither fraud nor negligence giving rise to the First Decision is alleged.  Yet, the claim for repayment of the Earlier Years’ tax is sought more than 6 years after the event.  Moreover, in so far as there is some symmetry with the claim now made in the power to raise “discovery assessments” that is a power conferred by Parliament.  There is no similar statutory machinery for the taxpayer.  Where the Revenue invoke the statutory powers that triggers the appellate jurisdiction once more and the new assessments can be challenged on appeal.  Mr. Singh argues that Mr. Carvill’s claim to upset the First Decision is not amenable to further judicial decision.
39.	In my view, all the factors identified in the previous paragraph indicate that there is no precise symmetry between taxpayer and Revenue in such cases.  While there may be parallels or analogies the contrasting situations are not the same and it cannot be said that, in so far as such lack of symmetry was taken into account, it was irrational for the Revenue to do so.
40.	I turn now to the point taken on Mr. Carvill’s behalf under the Human Rights Act 1998.  The submission is that in refusing to repay the whole or any part of the money paid to them by Mr. Carvill in respect of the Earlier Years the Revenue is acting contrary to Article 1 of the First Protocol to the European Convention on Human Rights.
41.	Before Mr. Justice Hart, Mr. Carvill (by Counsel) conceded that, in so far as that learned judge was concerned, the duty to construe the provisions of TMA 1970 in a manner consistent with Mr. Carvill’s Convention rights that consideration did not apply in relation to events before 2 October 2000.  The judge concluded that in the light of that concession, he had to give a negative answer to Issue 12 before him in relation to the Restitution Claim.  That issue was:
“ 12.  Whether the Human Rights Act 1998 has any application to the Claimant’s tax liabilities in respect of final appeals covering years of assessment ending prior to 2 October 2000 where those appeals were themselves final before 2 October 2000?”
Thus, the 1998 Act had no bearing on the Restitution Claim and, for that reason and the other reasons given, that claim was struck out.  However, it was accepted by the parties and by the learned judge that that issue and three other issues should not be decided on that occasion.  Therefore, while it is now clear that the 1998 Act has no bearing upon Mr. Carvill’s private law rights, it may be relevant to his public law rights.
42.	Article 1 of the First Protocol to the Convention provides as follows:
“Protection of property
Every natural or legal person is entitled to the peaceful enjoyment of his possessions except in the public interest and subject to the conditions provided for by law and by the general principle of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it determines necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other constrictions or penalties”.
43.	Mr. Carvill’s case on this aspect of the matter is that his relevant “possession” was (and I noted Miss Gloster’s formulation of it) “a right to be considered properly as an object of the power of the Revenue to make a repayment under the “care and management” provisons in the 1970 Act and to receive a payment if the discretion is exercised in the same way as with other taxpayers”.  Miss Gloster compared Mr. Carvill’s position with that of the object of a discretionary trust or power: a right to be considered for benefit and to receive that benefit if the proper exercise of the trustee’s/ donee of the power’s discretion so requires.
44.	It is common ground that any relevant “deprivation” of such a possession must have occurred after 20 October 2000 if the 1998 Act is to be relevant.  Mr. Carvill argues that the deprivation occurred on or about 2 May 2001 when the Revenue responded in detail to further arguments raised by Tusons in a letter of 14 November 2000.
45.	It is further submitted for Mr. Carvill that, once the 1998 Act came into force and questions of deprivation of possessions under the Convention became relevant, it was necessary for the Revenue to review Mr. Carvill’s claim or the refusal of it with a “greater intensity” than would otherwise have been required under domestic law alone.  Reliance is placed upon the speech of Lord Steyn in R (Daly) v Secretary of State for the Home Department [2001] 2 AC 532, 547-8, paragraph 27.  The passage is quoted in full in the supplemental written argument on behalf of Mr. Carvill (paragraph 8.3) and I will not repeat it here.  An analogy was drawn with the Wilkinson case (supra) where, in fact, it became clear that the statutory right of a widow to a bereavement allowance, which was not available to widowers, was a breach of the discrimination provisions of Article 14 of the Convention within the ambit of Article 1 of the First Protocol.
46.	Mr. Singh submits that the “right” identified by Miss Gloster is not a “possession” or a property right at all: a refusal to repay what is lawfully due to the Revenue is, therefore, not within Article 1.  Mr. Singh pointed out that the original contention for Mr. Carvill was that he was deprived of the “right to repayment which arose when the Revenue effectively accepted that the conditions in Section 741 were satisfied in relation to the 1982 transfer by indicating that it would not seek to apply Section 739 to the Future Years.  Such a “right” is rather different from that formulated in oral argument which I have endeavoured to set out in paragraph 43 above.  It is further argued that the analogy with the Wilkinson case is not a good one because the so called analogous right of Mr. Wilkinson in that case was not identified as a “possession” as such; by contrast his right not to be discriminated against under Article 14 fell “within the ambit” of Article 1 of the First Protocol.  However, no breach of Article 1 itself had occurred.  In summary, submitted Mr. Singh an expectation of consideration for the exercise of an administrative discretion to repay what is lawfully due to the Revenue is not a “possession” or a property right.  Moreover, he argues, a refusal to repay in the exercise of a discretion is not a “deprivation” of a possession either.
47.	In response, Miss Gloster referred me to Lester & Pannick on Human Rights Law and Practice (1999) p. 247 where the author writes with regard to the scope of Article 1 of the First Protocol; as follows:
“A wide range of economic interests are protected under art 1 of the first protocol.  These include … a legitimate expectation that a certain state of affairs will apply …”.
The author cites Pine Valley Developments Ltd v Ireland (1991) 14 EHRR 319.
48.	In the Pine Valley case the problem was that a development company had purchased land with the benefit of a certain planning permission.  Subsequently, the Supreme Court of the Irish Republic held that the permission had been ultra vires and void.  The European Court considered that the purchaser had enjoyed a right to develop the land which could be the subject of an interference contrary to Article 1.  It found that the applicants had “at least a legitimate expectation of being able to carry out this proposed development and this has to be regarded, for the purposes of Article 1 … as a component part of the property in question … “.
49.	It can be immediately seen that the phrase “legitimate expectation”, used in Lester & Pannick Op. Cit., was a summary of the finding of the Court in relation to the right in issue in that case which was an incident of a right to enjoy land.  In my view, that is far removed from the potential claim to be considered for the exercise of an administrative discretion which is sought to be classed as a “possession” in this case.  In the end, I do not consider that the “right” here alleged is properly to be regarded as a “possession” at all for the purposes of Article 1.  Nor was there any “deprivation” of anything when the Revenue refused to repay (whenever that was).
50.	The final point arising is the claim by Mr. Carvill that, even if he is unable to establish as irrational the Revenue’s decision not to repay to him 100% of the tax paid in respect of the Earlier Years, this decision not to repay him 41% of that tax is irrational.  This is what has been called the “Old Minority Shares point”.
51.	As Mr. Justice Hart explained (at paragraph 38 of his judgment), Mr. Carvill’s argument was and is that the only relevant transfer of  assets was the transfer by him of his 59% shareholding in Holdings in return for an equivalent shareholding in International Holdings (paragraph 9(5) of the judgment.) (In paragraph 38, Mr. Justice Hart makes it clear he is referring to paragraph 9(5) although he speaks there of the transfer of his 59% shareholding in International Holdings.)  By 1986 he had “power to enjoy” 100% of the income of International Holdings.  That, however, was as a result of a) the transfer by the minority shareholders of their shares in Holdings to International Holdings in exchange for an equivalent shareholding in International Holdings and b) the purchase in 1985 by Mr. Carvill of 10% of the latter shares from one of the minority shareholders and c) the purchase by International Holdings in December 1986 of the remaining minority shares in itself.  The result was that Mr. Carvill became entitled to 100% of the issued share capital of International Holdings.
52.	The question was whether, in those circumstances, Mr. Carvill should have been assessed by reference to his power to enjoy 100% of the income of International Holdings, or only by reference to that part of the income of International Holdings which was attributable to his transfer of 59% of the shares in Holdings.  This point was not argued before Mr. Everett.  At that stage, it is said that Mr. Carvill’s advisers took the view that, unless he could establish one or other of the grounds for avoiding the charges as set out in section 741, it followed that the assessments should be based upon a power to enjoy 100% of the income.
53.	The issue was debated before Dr. Avery-Jones although he did not have to decide the point.  This was because he held that Mr. Carvill had discharged the burden under Section 741 with regard to the transfers and any associated operations.  He did, however, go on to find that there was no procurement by Mr. Carvill of the Old Minority Shares and that the only transfer bringing Section 739 into play was the transfer of his own shares.  Therefore, Dr. Avery-Jones would, if necessary, have held that the only income caught by Section 739 was the income which was attributable to his transfer of 59% of the shares in Holdings.
54.	On those facts, and on the basis of certain further assumptions to which I refer below, Mr. Justice Hart held that First Decision was a complete defence to a Restitution Claim in respect of 41% of the tax paid for the Earlier Years.  He held that it was not a complete defence to the Judicial Review Claim in respect of that part of the tax.
55.	Before Mr. Justice Hart the following further assumptions of fact were made with regard to this part of the Claim:
“ … 8.1 In the appeal against the assessments for the Earlier Years the Defendants did not contend nor was it found by the Special Commissioner that the Claimant had procured the transfer of the Old Minority Shares to International Holdings;
8.2 the amount of income tax chargeable in the event that section 741 did not apply was agreed by the parties and was not determined by the Special Commissioner;
8.3 such assessments were contrary to the Defendants’ then unpublished practice and/or understanding of the law to the extent that the assessments sought to charge the Claimant to income tax on income which was attributable to the Old Minority Shares unless it could be established that the Claimant                had procured the transfer of the Old Minority Shares by the Old Minority Shareholders.
8.4 the Officers of the Inland Revenue having conduct of the appeal on behalf of the Defendants either knew or, with the exercise of reasonable care, should have known:
8.4.1 the facts at 8.3 above; and/or
8.4.2 the Defendants were not alleging that the Claimant had procured the transfer of the Old Minority Shares;
8.4.3. the Claimant and his advisers were or were unlikely to be aware of such internal practice and, in the absence of a finding by the Special Commissioner that the Claimant had procured the transfer of the Old Minority Shares, would be acting under a mistake in agreeing that an amount of income tax calculated by reference to dividends paid in respect of the Old Minority Shares would be chargeable in the event that Section 741 did not apply;
8.5.	In the Second Decision the Deputy Special Commissioner, Dr Avery-Jones C.B.E, (a) expressly found that the Claimant had not procured the transfer of the Old Minority Shares, and (b) was correct to do so.”
At the end of his Judgment on this preliminary issue, Mr Justice Hart noted that the Revenue accepted that, if all the assumptions recited by him at 8.1 to 8.5. were established, Mr Carvill would have grounds for complaining that there  had been an abuse of power which could found a claim for Judicial Review (paragraph 45).  Mr Singh points out that the word used is “could” not “would”.
56.	The position then was that by virtue of the First Decision the assessments raised against Mr Carvill in respect of 100% of the income were confirmed and became final.  There was no argument by Mr Carvill, whether in the alternative or otherwise, that he should at worst be assessable on only 59% of that income. The point simply went by default.  
57.	The crux of the present point lies in Mr Carvill’s contention that the point was conceded on his behalf because his advisors proceeded on the basis of dicta in Lord Howard de Walden v CIR (1941) 25 TC 121, 132, that were unfavourable to the taxpayer on an issue of this type. However, they had been unaware of contrary dicta in the Judgment of Walton J in Vesty v CIR (No. 2) (1978) 54 TC 503, 562, and were ignorant of a then unpublished practice of the Revenue which was to the effect that the Revenue applied the dicta of Walton J in such circumstances. The practice was eventually published, but not until 1999 (R.I.201 of April 1999). 
58.	I have had before me evidence given on behalf of Mr Carvill as to his advisers’ understanding of the matter in 1994.  I have had evidence from an official of the Revenue (Mrs Elaine Povey) as to the workings of the Revenue practice; these are not without their complexities. 
59.	I am not surprised that, when confronted by the alternative claim to repayment of the 41% of the tax, almost six years after the quantification of relevant tax had been conceded before Mr Everett, the Revenue’s reaction was that it was far too late to re-open what had been a matter of concession.  When the claim for repayment for 41% was made, all that the Revenue officials dealing with that claim could know was that, for reasons for good, bad or indifferent, this point had not been pursued before Mr Everett. The taxpayer was saying the concession was made in ignorance of a debateable point of law and an unpublished practice of the Revenue. The contentions would require the then current Revenue officials to try to unravel the rights and wrongs of an agreement made by others on the Revenue’s behalf in litigation many years previously. The matter seems to me to be far from the clear cut point that Miss Gloster and Mr Goodfellow elegantly sought to make it. I think that the argument, either on the assumed facts before Mr Justice Hart or on the written evidence before me falls short of showing the alleged clarity of understanding on the part of the Revenue of the mistake or misunderstanding under which Mr Carvill’s representatives say they were labouring. Nor does the evidence show that the consequences of correcting any such mistake or misunderstanding would have been as alleged by Mr Carvill.  It is impossible at this length of time to say that the state of mind of each of the parties to the 1994 argument is so clear that, had Mr Carvill’s advisors’ “mistake” been corrected it would have been immediately appreciated and accepted that at least 41% of the tax was not due.  In such circumstances, how can it be irrational for the Revenue in 2000 or 2001 to refuse to re-open a matter that was “done and dusted” at least six years previously by reference to new speculation as to the state of mind of the parties at the time of the 1994 agreement?  I cannot detect any such irrationality.
60.	The argument on this part of the case  proceeds again upon the premise that the decision of Dr Avery-Jones on the underlying chargeability of Mr Carvill was clearly right: see for example paragraphs 24 and 26 of the written argument. Submissions are then advanced as to the “correct” construction of Section 739 and whether Mr Carvill “procured” the transfer of the Old Minority Shares. As submitted by the Revenue, in paragraph 55 of their written argument, the various points are made on behalf of Mr Carvill by reference to facts found by Dr Avery-Jones and by reference to the recollection of one of those involved in the earlier appeal.  It is inappropriate on judicial review to try to re-litigate matters which were conceded in the first appeal and it is also inappropriate to do so by reference to facts found later by another tribunal.  It was not irrational of the Revenue to decline to enter into any such argument.
61.	Accordingly, this application for judicial review fails.