Deighan v Hearne

• Jurisdiction: Ireland
• Judgment Date: 27 August 1986
• Neutral Citation: 1986 WJSC-HC 268
• Date: 27 August 1986
• Docket Number: [1984 No. 6386P],No. 6386P/1984
• Court: High Court

DEIGHAN v. HEARNE

BETWEEN

MICHAEL DEIGHAN

PLAINTIFF

AND

EDWARD N. HEARNE, JOHN M. FITZPATRICK, NOEL MURPHY, IRELAND AND THE ATTORNEY GENERAL AND THE MINISTER FOR FINANCE

DEFENDANTS

1986 WJSC-HC 268

No. 6386P/1984

THE HIGH COURT

Synopsis:

CONSTITUTION

Courts

Administration of justice - Income tax - Collection - Default procedure - Validity - Personal rights - Failure of taxpayer to furnish return of income - Default assessment made by inspector of taxes - No appeal made by taxpayer against assessment - Assessment thereupon made conclusive by statute - Certificate of Collector General issued to county registrar stating amount payable by taxpayer - Distraint of taxpayer's goods - Notice of intended seizure signed by court messenger - Held that the notice was sufficiently signed - Held that the inspector of taxes, in making the assessment pursuant to the default procedure, had not been exercising a function or power of a judicial nature - Held that the collection of money under the default procedure was an executive function - Held that the inviolability of the citizen's dwelling is subject to the exigencies of the common good - Held that there had been no infringement of the taxpayer's right to have recourse to the Courts as no justiciable issue had been raised - Income Tax Act, 1967, ss. 184, 416, 480, 485 - Constitution of Ireland, 1937, Articles 34, 37, 40 - (1984/6386 P - Murphy J. - 27/8/86) -[1986] IR 603

|Deighan v. Hearne|

REVENUE

Income tax

Collection - Default procedure - Validity - Failure of taxpayer to furnish return of income - Default assessment made by inspector of taxes - No appeal made by taxpayer against assessment - Assessment thereupon made conclusive by statute - Certificate of Collector General issued to county registrar stating amount payable by taxpayer - Distraint of taxpayer's goods - Notice of intended seizure signed by court messenger - Held that the notice was properly signed - Held that the inspector of taxes, in making the assessment pursuant to the default procedure, had not been exercising a function or power of a judicial nature - Held that the collection of money under the default procedure was an executive function - Held that the inviolability of the citizen's dwelling is subject to the exigencies of the common good - Held that there had been no infringement of the taxpayer's right to have recourse to the Courts as no justiciable issue had been raised - Income Tax Act, 1967, ss.184, 416, 480, 485 - Constitution of Ireland, 1937, Articles 34, 37, 40 - (1984/6386 P - Murphy J. - 27/8/86) - [1986] IR 603

|Deighan v. Hearne|

Citations:

ABBEY FILMS LTD V IRELAND 1981 IR 158

CONSTITUTION ART 37.1

CONSTITUTION ART 38.2

CONSTITUTION ART 40.3

CONSTITUTION ART 40.5

COVENTION OF HUMAN RIGHTS ART 6

DEATON V AG 1963 IR 170

FINANCE ACT 1968 S8

INCOME TAX ACT 1967 S172

INCOME TAX ACT 1967 S181

INCOME TAX ACT 1967 S184

INCOME TAX ACT 1967 S184(2)

INCOME TAX ACT 1967 S4

INCOME TAX ACT 1967 S416(6)(a)

INCOME TAX ACT 1967 S416(7)(d)

INCOME TAX ACT 1967 S480(1)

INCOME TAX ACT 1967 S483

INCOME TAX ACT 1967 S485

INCOME TAX ACT 1967 S500

INSPECTOR OF TAXES V KIERNAN 1981 IR 117 1982 ILRM 13

LYNHAM V BUTLER (NO 2) 1933 IR 74, 67 ILTR 75

MACAULEY V MIN POSTS & TELEGRAPHS 1966 IR 345

MCGLINCHEY V WREN 1982 IR 154 1983 ILRM 169

MURPHY V DUBLIN CORPORATION 1972 IR 215, 107 ILTR 65

O'BRIEN V BORD NA MONA 1983 IR 255 1983 ILRM 314

O'FARRELL, IN RE 1960 IR 239

O'R V O'R 1985 IR 36

R V R 1984 IR 296, 1985 ILRM 631

ROYAL COURT DERBY PORCELAIN CO LTD V RUSSELL 1949 2 KB 417

1 Judgment of Mr. Justice Murphy delivered this 27thday of August 1986.

2 This case involves the analysis of several sections of the Income Tax Act 1967as amended from time to time and presented a wide-ranging challenge to the constitutionality of several of those sections. If the Plaintiff's claim is successful the machinery by which tax is assessed by Inspectors of Taxes will be condemned as will be the procedures by which arrears of tax are levied from defaulting taxpayers. In these circumstances it is particularly regrettable that the Plaintiff was not professionally represented though that is not to imply that he did not have an impressive range of knowledge of the Constitution and the decisions of the Courts thereon as well as a considerable expertise in the presentation of his case.

3 It is common case that the Plaintiff was assessed to tax for the year ending the 5th April 1985 under Schedule D of the Income Tax Act 1967. The assessment is dated the 27th July 1984, the description of the Plaintiff/Taxpayer is given as "Furniture Wholesale"; the taxable income is stated at £15,000 and the net income tax at £6,680. There was evidence that assessments had been made under the same description and in varying amounts for the years ending the 5th April 1984, 1983, 1982, and 1981. The evidence of the Plaintiff was that he had no recollection of receiving the earlier notices of assessment but did not deny that he might have received them. I am satisfied that they were duly dispatched by the appropriate authorities and indeed received by the Plaintiff. These assessments were made by successive Inspectors of Taxes for the Dublin (Income Tax) Number 12 District under Section 184 (2) of the Income Tax Act 1967. That subsection provides as follows:-

4 If -

5 (a) a person makes default in the delivery of a statement in respect of any tax under Schedule D (or F), or,

6 (b) the inspector is not satisfied with a statement which has been delivered, or has received any information as to its insufficiency,

7 the Inspector shall make an assessment on the person concerned in such sum as, according to the best of the inspector's judgment, ought to be charged on that person."

8 The foregoing is the "default" procedure. The scheme actually contemplated by the Income Tax Code (what I may call "the ordinary procedure") entails the delivering by the taxpayer to the Inspector of Taxes, when so required by notice in that behalf given by the Inspector, of returns of income in the prescribed form. Such returns are provided for by Section 172 of the I.T.A. 1967. To ensure compliance with that statutory requirement significant penalties are imposed by Section 500 of the same Act. Having received the returns the Inspector of Taxes is empowered by Section 181 to make an assessment under and for the purposes of Schedule D of the Income Tax Code. That section goes on to provide that the Inspector should give notice to every person assessed of the assessment made on him, the amount of the assessment and the time allowed for giving notice of appeal against it. Any taxpayer aggrieved by any assessment to income tax made upon him by an Inspector has the right, under Section 41 of the I.T.A. 1967 to appeal the assessment to the Appeal Commissioners on giving notice in writing to the Inspector within thirty days after the date of the notice of assessment. If, however, notice of appeal is not given the assessment becomes "final and conclusive" by virtue of subsection 6 (a) of Section 416 aforesaid. That cut-off period is subject to the qualification that the taxpayer may seek and obtain an extension of time for appealing from the Inspector of Taxes at any time within twelve months after the date of the notice of assessment on the grounds of absence, sickness or other reasonable cause. Furthermore, under paragraph (d) subsection (7) of Section 416 the taxpayer may at any time seek an extension of time for appealing from the Inspector of Taxes provided that he submits to the Inspector an appropriate return of income and pays the tax charged by the assessment together with interest thereon. In either case there is an appeal to the Appeal Commissioners from the decision of the Inspector.

9 With regard to the collection of tax, Section 480 (1) provides as follows:-

10 If a person neglects or refuses to pay the sum charged, upon demand made by the Collector in accordance with the assessments and warrants delivered to him, the Collector shall, for non-payment thereof, —— distrain the person charged by his goods and chattels, and all such other goods and chattels as the Collector is hereby authorised to distrain, without any further authority for that purpose than the warrant delivered to him on his appointment —".

11 Section 483 of the Income Tax Act 1967as enacted empowered the Special Commissioners (as they were then known) to commit to Prison a person who neglected or refused to pay tax charged upon him by virtue of that Act within ten clear days after demand made on him and where no sufficient distress could be found whereby the same might be levied. However the Income Tax (Amendment) Act 1967which was enacted immediately following the Income Tax Act 1967provided for the repeal of Section 483 aforesaid.

12 The procedure for recovery invoked in the present case is that provided for in Section 485 of the I.T.A. 1967 which section as amended provides as follows:-

13 2 "485 (1) Whenever any person makes default in paying any sum which may be levied upon him in respect of income tax, the Collector may issue a certificate to the county registrar or sheriff of the county in which the defaulter resides or has a place of business certifying the amount of the sum so in default and the person upon whom the same is leviable and the lands and tenements (if any) on which the sum is charged.

14 (2) Immediately upon receipt of the certificate the county registrar or sheriff shall proceed to levy the sum therein certified to be in default by seizing all or any of the goods, animals and other chattels within his bailiwick belonging to the defaulter and for such purposes he shall (in addition to the rights, powers and duties conferred on him by this section) have all such rights, powers and duties as are for the time being vested in him by law in...