[2010] UKFTT 50 (TC)

                                                                        TC00363

Appeal number TC/2009/10532

Procedure – withdrawal of disputed decision – application to strike out appeal – The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, rules 8 and 17 – application dismissed and appeal allowed

FIRST-TIER TRIBUNAL

TAX

                                    RASAM GAYATRI SILKS LTD                   Appellant

                                                                      - and -

                                 THE COMMISSIONERS FOR HER MAJESTY’S

                                     REVENUE AND CUSTOMS (Customs duty)  Respondents

                                                TRIBUNAL: ROGER BERNER (Judge)

Sitting in chambers in London on 16 July 2009

© CROWN COPYRIGHT 2009

DECISION

1. On 14 July 2009 the Respondents filed a notice of application for a direction of the Tribunal that this appeal be struck out.  The grounds for that application were expressed as follows:

“The grounds for this application are that the Commissioners have now withdrawn the disputed decision and so there is no longer a decision to be appealed and the Appellant should withdraw their appeal.”

2. This application came before me in chambers on 16 July 2009.  My decision was released on 20 July 2009.  I decided that the appeal should not be struck out but allowed.  I gave in my decision the following reasons:

“The appeal was validly made and must be determined by the Tribunal.  The jurisdiction of the Tribunal does not cease because the disputed decision has been withdrawn and it is not therefore appropriate to exercise the power to strike out under Rule 8 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”).  The proper course in those circumstances is for the appeal to be allowed.”

3. By letter to the Tribunal dated 24 July 2009 the Respondents applied, under Rule 35(4) of the Rules, for full written findings and reasons for my decision.

The Facts

4. The Appellant appealed against the decision of the Respondents to issue Customs Warning Letter reference CCP09/1472 (“the Warning Letter”).  The Warning Letter was issued on 19 January 2009 in respect of alleged furnishing by the Appellant of inaccurate declarations misclassifying certain imported goods, resulting, so it was claimed, in an under-declaration of duty and import VAT.

5. At the request of the Appellant’s accountants made on 16 February 2009, the decision to issue the Warning Letter was reviewed by the Respondents and confirmed in a letter dated 2 April 2009.  The review letter advised the Appellant of its right to appeal against the decision within 30 days of 2 April 2009.  The appeal was made on 27 April 2009, and received by the Tribunal on 29 April 2009.

6. On 14 July 2009 the Respondents made the strike out application referred to above.

The Tribunal Rules

7. Rule 8 of the Rules provides for striking out of a party’s case.  Of relevance to this decision are Rules 8(2) and 8(3)(c), which I set out below:

(2) The Tribunal must strike out the whole or part of the proceedings if the Tribunal-

(a) does not have jurisdiction in relation to the proceedings or that part of them; and

(b) does not exercise its power under rule 5(3)(k)(i) (transfer to another court or tribunal) in relation to the proceedings or that part of them.

(3) The Tribunal may strike out the whole or a part of the proceedings if-

            …

(c) the Tribunal considers there is no reasonable prospect of the appellant’s case, or part of it, succeeding.

8. Withdrawal of an appeal is dealt with by Rule 17 which I set out in full:

17.-(1) Subject to any provision in an enactment relating to withdrawal or settlement of particular proceedings, a party may give notice to the Tribunal of the withdrawal of the case made by it in the Tribunal proceedings, or any part of that case-

            (a) at any time before a hearing to consider the disposal of the proceedings (or, if the Tribunal disposes of the proceedings without a hearing, before that disposal), by sending or delivering to the Tribunal a written notice of withdrawal; or

            (b) orally at a hearing.

(2) The Tribunal must notify each other party in writing of a withdrawal under this rule.

(3) A party who has withdrawn their case may apply to the Tribunal for the case to be reinstated.

(4) An application under paragraph (3) must be made in writing and be received by the Tribunal within 28 days after-

            (a) the date that the Tribunal received the notice under paragraph (1)(a); or

            (b) the date of the hearing at which the case was withdrawn orally under paragraph (1)(b).

Discussion

9. The grounds on which the Respondents invited me to strike out this appeal are set out above.  The Respondents do not suggest that the original appeal was in any way invalid or that the disputed decision was not an appealable decision.  They do not submit that the Tribunal had no jurisdiction to entertain the appeal when it was made.  The Respondents instead put forward the proposition that following a withdrawal of a disputed decision there is no longer a decision to be appealed, and they say that the Appellant should withdraw its appeal.

10. Turning first to the proposition that on the withdrawal of a disputed decision by the Respondents it becomes incumbent on an appellant to withdraw the appeal, I can see no basis for this at all.  As Rule 17 makes clear, the matter of withdrawal is entirely one for a party.  The Appellant in this case has not withdrawn, rightly in my view as there was no reason for it to do so, and although it was open to the Respondents themselves to withdraw they have chosen not to do so, but instead to apply for the appeal to be struck out.

11. The absence of withdrawal by either party means that the appeal remains outstanding and must be determined by the Tribunal.  The Respondents applied for it to be struck out.  I decided that was not the appropriate course, and that the appeal should instead be allowed.

12. I have referred above to the provisions of Rule 8 that I consider to be relevant here.  Looking first at Rule 8(3)(c), where I have a discretion, it does not seem to me that this can apply in these circumstances.  This rule looks at the merits of an appellant’s case.  In the light of the withdrawal by the Respondents of the disputed position I do not see how it could be said that the Appellant’s case had no reasonable prospect of succeeding.  I was not prepared to strike out the appeal on that basis.

13. It seems to me that the only ground on which the Respondents could base their application under Rule 8 is that in Rule 8(2).  Rule 8(2) is imperative; if it applies then the appeal must be struck out, and I have no discretion.  In my view Rule 8(2) does not apply.  This was a valid appeal against a decision that was in force at the time of the appeal.  The Tribunal had jurisdiction over those proceedings.  While the appeal is outstanding, and before it is determined or one party withdraws, in my judgment the Tribunal continues to have jurisdiction.  Without formal withdrawal by a party the appeal remains outstanding and the proceedings have not ended.  The argument that “there is no longer a decision to be appealed” is, in my view, misconceived in a case where the decision is not withdrawn before the appeal is made.  The fact is that there was a decision to be appealed and a valid appeal was made in respect of which the Tribunal had jurisdiction.  The subsequent withdrawal of the decision did not end the appeal proceedings over which the Tribunal continued to have jurisdiction.

Decision

14. For these reasons I decided that it would not be right for me to grant the Respondents’ application and strike out the appeal, but that the proper course, in circumstances where the disputed decision has been wholly withdrawn, but there has been no withdrawal by either party under Rule 17, is for the appeal to be allowed.

The Respondents have a right to apply for permission to appeal against this decision pursuant to rule 39 of the Rules.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

ROGER BERNER

TRIBUNAL JUDGE

RELEASE DATE: 30 July 2009