United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E802, [2004] UKVAT(Excise) E00802

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McKittrick v Customs and Excise [2004] UKVAT(Excise) E00802 (21 October 2004)

E00802

Appeal--Strike out---appeal does not lie to, or cannot be entertained by, a tribunal---VAT and Duties Tribunal Rules 1986/590 r6(1)(as amended)

BELFAST TRIBUNAL CENTRE

BRIAN MCKITTRICK Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: HIS HONOUR JUDGE MCKEE Q.C. (Chairman) MRS JOAN WHITESIDE OBE

Sitting in public in Belfast on the 1st September 2004

Mr S. Creighton, Solicitor, appeared for the Appellant.

Mr W. Baker, Counsel, appeared for the Respondents instructed by Mr Phillips, Solicitor.

© CROWN COPYRIGHT 2004

DECISION

1. The Respondents, by Notice dated the 26th August 2003 applied for this Appeal to be struck out pursuant to the provisions of Rule 6 of the VAT Tribunals Rules 1986 on the grounds that "..an Appeal to Tribunal cannot lie." The parties agreed that this issue would be resolved by way of preliminary hearing.

2. The Appellant, by his Notice of Appeal to this Tribunal dated the 16th April 2003, referred to an earlier Notice of Appeal ( LON/2002/8273) in which he set out his grounds of appeal extensively and complained essentially that his goods had been seized on 5th March 1999. He therein referred to the Hoverspeed case . He added that " I fail to see what grounds the Customs had to seize my goods, other than simply the quantity of goods which has been proven on its own to be insufficient grounds." He added that "I did not appeal at the time for a number of reasons, I was led to believe that no legal aid was available for condemnation proceedings and I could not afford to fund the proceedings myself."
It is relevant to refer to the letter of the 4th June 1999 from HM Customs and Excise addressed to the Appellant which reads as follows:-

"Dear Sir,
Re goods detained from you and Mr Barr on 5 march 1999.

Goods involved:-
27 kilograms of hand rolled tobacco 11.2 litres of spirits
135 litres of wine 750 Cigarillos
2400 cigarettes

You were subsequently interviewed at Carne House Customs Office regarding these goods. I now inform you that our enquiries are complete in this matter and that as you have failed to satisfy the Commissioners of Customs and Excise that the above goods were for "personal use" they are deemed liable to forfeiture under the provisions of the Customs and Excise Management Act 1979 and are now seized. In consequence you have been issued with form C156 (enclosed) which lists the goods and explains your rights to appeal against the seizure…"

The facts are not in issue and are comprehensively set out in correspondence.
The Appellant withdrew his appeal by letter dated the 7th February 2003 from his solicitor, Mr Creighton, to the Solicitor for H.M. Customs and Excise. In that letter Mr Creighton made it clear that this withdrawal was to enable his client to request a review of the Commissioners' decision not to restore his goods.

The Appellant wrote to the Respondents by letter entitled "Request for Restoration of Seized Items" which letter was dated the 19th March 2003. In that letter he set out the grounds on which he sought this relief as follows:-

"I believe these goods should be restored for the following reasons:- Seizure was made under the Excise (Personal Reliefs) Order now revoked. In light of the July 2002 Hoverspeed Judgment (upheld substantially at appeal) and in light of the intervention of the European Commissioner Fritz Bolkenstein regarding the UK's interference with cross-border shoppers. Most particularly I point to the decision made on the 26th July 2002 by the Magistrate in Belfast Mr McRandall (copy enclosed) that highlighted that HM Customs had acted unlawfully in breaching the Human Rights of Mr George Simon Barr. This is most relevant as Mr Barr was my travelling companion on the occasion that the goods were seized. Mr Barr has subsequently obtained some compensation in regard to the goods that were seized from him on the 5th March 1999. I believe that my goods should now be restored to me.

By letter dated the 31st March 2003 Mr A. Killen wrote to Mr Creighton in the following terms:-

"In relation to your request for restoration of their goods, these goods were condemned as forfeit as no challenge was made to their seizure within the one month required. Mr McKitterick has made no claim until now and the goods were duly condemned by operation of law and the passage of time. The goods have since been destroyed and therefore there is no basis for making restoration to your client."

Mr Creighton replied by letter dated the 2nd April 2003 pointing out, on behalf of his client, as follows:-

"I have received your letter dated the 31.1.03 refusing to restore my client's goods. I note however that you have not included any information about requesting any review of the decision given in your letter of the 31.3.03 (as per your Notice 12A).

I now formally request that you pass this matter to an impartial review officer (as per your Notice 12A).

I believe that I am correct in stating that you now have 45 days to carry out this review, otherwise if you do not I can direct my client back to the VAT and Duties Tribunal on the basis of an assumed decision on the part of HM Customs and Excise"

Mr Killen replied by letter dated the 9th April 2003 stating:-

"I have not refused to restore your client's goods as the issue of restoration has not been considered and I do not believe there are any grounds for doing so.
Your clients rights to request a review were not included in my letter dated 31st March 2003 as there was no decision liable to review."

Mr Creighton's letter dated the 11th April 2003 was before this Tribunal in which he acknowledged receipt of a letter dated the 31st January 2003 from Mr Killen explaining that the goods had been destroyed . Mr Creighton then wrote as follows:-

"I am satisfied that this is your decision not to restore, as restoration can take the form of compensation in respect of the goods and the fact that the goods have been destroyed is not relevant to restoration."

Mr Creighton goes on to say:-

" …In absence of a departmental review I consider this to be an assumed decision not to restore the goods after conducting a statutory review as provided by the Finance Act 1994 section 14 and schedule 5."
Further in the same letter Mr Creighton writes:-

You also said in your letter dated 9.4.03 "there was no decision liable to review". Again I take this as a refusal of a departmental review and an assumed decision not to restore."
By Notice of Appeal (LON/2003/8100) dated the 16th April 2003, being the Appeal the subject of this Decision, Mr Creighton set out, on behalf of this Appellant, grounds of appeal referring to the original Appeal which had been submitted on the 18th September 2002 and which had subsequently been withdrawn…"..to allow HM Customs to carry out a review". He continued:-

"They have refused to do so and I now take this as an assumed or deemed decision not to restore my goods after carrying out a departmental review. I enclose copies of my original Grounds of Appeal and other relevant letters…"

Mr Baker, for the Respondents, opened his skeleton argument pointing out that the Appellant's goods were originally seized on the 5th March 1999. He added that since the Appellant did not appeal against the seizure of his goods they became forfeit to the Crown by virtue of Schedule 3 paragraph 5 of the Customs and Excise Management Act 1979.

The Appellant first requested restoration of his goods by letter dated the 1st March 2003. The basis of the Respondent's case was that these goods had been destroyed. Mr Creighton submitted that no proof had been offered that this had actually happened in this case. No witness was called on behalf of the Respondents to cover this point but Mr Baker referred the Tribunal to a written statement made by a Senior Officer from the Customs and Excise, Carol Armstrong, who affirmed in that statement that these goods were not held in the Queen's warehouse at the time of her appointment on the 4th November 2002. Bearing in mind that the Appellant did not contest the condemnation proceedings this Tribunal has considered paragraph 2.15 of Notice 12A issued by HM Customs and Excise . This paragraph makes it clear that HM Customs and Excise "…will dispose of seized perishable goods (including tobacco and beer) as quickly as we can." Nor apparently did Mr Creighton himself seriously contemplate the possibility that the goods might not have been destroyed. In his letter to the Commissioners dated the 11th April 2003 he suggests that :-

"…restoration can take the form of compensation in respect of the goods and the fact that the goods have been destroyed is not relevant to restoration."

This Tribunal proceeds to consider this preliminary point on the basis that the overwhelming probabilities are that the goods have been long since disposed of, as maintained by the Respondents.

Mr Baker directed his submissions to the terms of Mr Creighton's letter dated the 11th April 2003. He submitted that Mr Creighton had no grounds on which he could base his assumption that "…In the absence of a departmental review I consider this to be an assumed decision not to restore the goods after conducting a statutory review as provided by the Finance Act 1994, section 14 and Schedule 5."

Mr Baked directed our attention to these statutory provisions. We are required to consider whether this case can properly fall within the definition set out in section 14 (1)(d) being …

"…any decision by the Commissioners or any officer which is of a description specified in Schedule 5 of this Act."

We are then directed to Schedule 5 and, a scrutiny, to paragraph 2(1)(r ) being:-

"any decision under section 152(b) as to whether or not anything forfeited or seized under the customs and excise Acts is to be restored to any person or as to the conditions subject to which any such thing is to be restored;"

In section 152 of the Customs and Excise Management Act 1979 is to be found a discretion conferred on the Commissioners to :-

"…restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under those Acts;…"

Mr Baker pointed out in the course of his submission that the jurisdiction was to restore "…any thing forfeited or seized" and this could not, as Mr Creighton contended, afford a jurisdiction to recompense in any other form. The description of "the thing" specifically stated that that "thing" to be restored under this discretion had to have been "forfeited or seized".

Despite the terms of his letter Mr Creighton himself did not direct our attention to any authority furnishing the Respondents with the alternative of offering compensation. There is, indeed, no authority which will allow the Commissioners to offer compensation in lieu of goods which have been destroyed. Mr Creighton further submitted that the absence of a departmental review can be "…an assumed decision not to restore the goods after conducting a statutory review…" He refers this Tribunal to section 15 (2) of the Finance Act 1994 which provides:-

"Where---
(a) it is the duty of the Commissioners in pursuance of a requirement by any person under
section 14 above to review any decision; and
(b) they do not, …give notice to that person of their determination on the review,
they shall be assumed for the purposes of this Chapter to have confirmed the decision."

But Mr Creighton was unable to persuade this Tribunal that the Commissioners were under any such duty. The circumstances of this case do not bring this decision made by the Respondents, not to consider the restoration of these goods, within the definition of section 14 (1)(d). Section 14 and 15 of the Finance Act 1994 make provision for review of specified decisions. It by no means follows that the Respondents are empowered or required to review decisions which do not fall within the description of those specified. In this instance they cannot consider restoration of goods which no longer exist. It is an essential feature of Schedule 5 paragraph 2(r) of the Finance Act 1994 that the thing must be physically capable of being restored.

Mr Creighton argued that the discretion in section 152 of the Customs and Excise Management Act 1979 vested in the Commissioners, for which he contended, must be subject to review. He added that that review must be undertaken by this tribunal. He submitted that the discretion cannot be unfettered. In short measure, it is perhaps relevant to refer to the dictum of the President of VAT and Duties Tribunals in his decision in Gore's Case which, though appealed, was not appealed on this point. In that case he pointed out that :-

"During the detention period the "owner" has no means , statutory or otherwise to recover them (the goods) unless ,of course, the Commissioners can be shown to have acted excessively or abusively, in which case the High Court, judicial review proceedings are available."

It follows that there is no jurisdiction in this Tribunal to consider the Appellant's application for restoration of goods.

Mr Creighton argued that the Appellant's human rights will have been denied if he cannot bring an Appeal to this Tribunal. In this respect this Tribunal has considered the judgment of Pill LJ in Gora & others v Commissioners of Customs and Excise (2003) EWCA Civ 525. There the Court of Appeal found that there was no non-compliance with Article 6 (of the European Convention on Human Rights) since the matter can be resolved by judicial review in the High Court.

There remained the question whether it could be said that the Respondents could be criticised fairly in dealing with these goods as they did. As to that we are convinced that the Respondents acted throughout in a perfectly reasonable manner and we have heard no valid criticism. Their conduct was reasonable in every sense including the Wednesbury sense.

Far from criticising the Respondents we have come to the conclusion, having made every allowance for the Appellant, that his conduct amounted to an abuse of the procedure of the Tribunal.

In arriving at that conclusion we have taken into account the ruling of the learned Magistrate which we have read and considered carefully. We make no comment on this ruling except to say that it does not bind this Tribunal on the matter under consideration. It was a ruling in favour of a Mr Barr staying Condemnation Proceedings brought by the Respondents in the Magistrate's Court in Belfast on the grounds that Mr Barr's human rights under Article 6 of the European Convention on Human Rights had been infringed. We have found that this Appellant's human rights have not been infringed.

More particularly this Appellant cannot be heard to await subsequent favourable amendments in the law, as we find happened in this case, before launching his appeal. Nor do we entertain any criticism of the Respondents or their officers for not applying the law in 1999 as it was to become following the Hoverspeed case ( 2002) 3 WLR 1219.

We are constrained to mention Mr Creighton's reliance on Notice 12A. This Notice has no statutory authority. Mr Creighton managed to give the impression that he was entitled to rely on this publication because it emanated from the Respondents even though the statute could be interpreted differently. If there is a conflict between this Notice and the statute, this Tribunal is bound to consider and apply the statute.

This appeal is struck out on the grounds that the appeal does not lie and cannot be entertained by this Tribunal.

This Tribunal awards costs to the Respondents

JUDGE MCKEE QC

CHAIRMAN

RELEASED: 21 October 2004

LON/2003/8100