Gilligan v Criminal Assets Bureau

• Jurisdiction: Ireland
• Judge: Mr. Justice Morris
• Judgment Date: 26 February 1997
• Neutral Citation: [1997] IEHC 38
• Docket Number: [1996 No. 10723P]
• Court: High Court
• Date: 26 February 1997

[1997] IEHC 38

THE HIGH COURT

No. 10273p/1996

GILLIGAN v. CRIMINAL ASSETS BUREAU

BETWEEN

GERALDINE GILLIGAN

PLAINTIFF

AND

CRIMINAL ASSETS BUREAU, BARRY GALVIN, FRANK LANIGAN AND THE REVENUE COMMISSIONERS

DEFENDANTS

Citations:

INCOME TAX ACT 1967 CH 1 PART IX

FINANCE ACT 1988 S17

INCOME TAX ACT 1967 S478

FINANCE ACT 1983 S19

INCOME TAX ACT 1967 S194

INCOME TAX ACT 1967 S195

INCOME TAX ACT 1967 S105

INCOME TAX ACT 1967 S195(4)(a)

MURPHY & ANOR V AG 1982 IR 241

INCOME TAX ACT 1967 S192

INCOME TAX ACT 1967 S193

INCOME TAX ACT 1967 S196

INCOME TAX ACT 1967 S197

INCOME TAX ACT 1967 S198

INCOME TAX ACT 1967 S194(c)

INCOME TAX ACT 1967 S194(1)(b)

FINANCE ACT 1988 S10

Synopsis:

Revenue

Income tax; whether plaintiff wife chargeable person within chargeable period; s.105 Income Tax Act, 1967; whether ss.194 and 195 of 1967 Act applicable; assessability of husband in respect of income of both spouse; option to be treated either as a married couple or single persons; whether obligation on plaintiff to prepare and deliver returns in prescribed form; s.10 Finance Act, 1988 Held: Plaintiff not chargeable; no obligation to prepare and deliver a return (High Court: Morris J. 26/02/1997)

Gilligan v. Criminal Assets Bureau and Anor.

[1997] 1 IR 526

1 Judgment of Mr. Justice Morris delivered the 26th day of February, 1997.

2 This matter comes before the Court in the following circumstances:-

3 On the 28th November, 1996 the Plaintiff applied to the High Court by way of Notice of Motion seeking an interlocutory injunction restraining the Defendants from advertising for sale or taking any steps to dispose of the property of the Plaintiff seized by the Second named Defendant and his servants or agents on the 20th November, 1996 at Mucklon, Enfield, County Kildare and secondly, directing the Third named Defendant to return the plant property to the said premises and to make good any damage caused by them.

4 At that hearing, Mr. Justice Geoghegan refused this application and reserved the costs.

5 From this Order the Plaintiff appealed to the Supreme Court who, having considered the case, sent it back to the High Court for the purpose of trying certain issues. These issues are:-

6 (1) For the chargeable period, the twelve months ending on the 5th April, 1995, was Geraldine Gilligan a chargeable person?

7 (2) If yes to (1), do the provisions of Part 9, Chapter 1 of the Income Tax Act, 1967preclude the Inspector of Taxes from raising an assessment on Geraldine Gilligan (the Plaintiff)?

8 The case comes before the Court on an agreed set of facts. They are as follows:-

9 1. For the twelve months ending the 5th day of April, 1995 Geraldine Gilligan lived with John Gilligan as husband and wife.

10 2. In July of 1995 Geraldine Gilligan separated from John Gilligan and they ceased living together as husband and wife.

11 3. No election was ever made by Geraldine Gilligan and/or John Gilligan to be assessed in accordance with the provisions of Section 195 of the Income Tax Act, 1967.

12 4. No return of income for the 12 months ending the 5th day of April 1995 has been received from Geraldine Gilligan or John Gilligan.

13 5. In respect of the 12 months ending the 5th of April, 1995 (the relevant chargeable period) the date before which a return of income had to be made "the specified return date" was the 31st day of January, 1996.

14 6. By assessment dated 16th day of September, 1996 Geraldine Gilligan was assessed to tax on "miscellaneous income" of £1.6 million in respect of the 12 months ending the 5th day of April, 1995.

15 7. The assessment of "miscellaneous income" was raised by virtue of Section 19 of the Finance Act, 1983.

16 8. The miscellaneous income, the subject matter of the aforesaid assessment is not income in respect of which any assessment has been raised against John Gilligan.

17 9. It is the contention of the Inspector of Taxes who raised the assessment on Geraldine Gilligan that the sum of £1.6 million represents the receipts and/or income of Geraldine Gilligan.

18 10. On the 11th day of October, 1996 Geraldine Gilligan, through her Solicitor served Notice of Appeal on the Inspector of Taxes who raised the aforesaid assessment.

19 11. On the 15th day of October, 1996 the Inspector of Taxes notified Geraldine Gilligan that she was not entitled to make such appeal by reason of the provisions of Section 17 of the Finance Act, 1988.

20 12. No appeal was taken from the refusal of the appeal by the Inspector of Taxes by Geraldine Gilligan.

21 13. On the 14th day of November, 1996 a demand for payment, pursuant to Section 478 of the Income Tax Act, 1967was sent to Geraldine Gilligan.

22 14. On the 19th day of November, 1996 a certificate was issued to the appropriate to levy the total sum due by way of tax.

23 15. The Sheriff duly executed against and seized the goods of Geraldine Gilligan with a value less than the sum certified due.

24 The issues that I am required to try are limited issues. Having read the affidavits that have been filed in this case, it is clear that significant consequences may flow from my determination of these issues. It is no part of my function to consider any such consequences and I confine my judgment entirely to the issues before me which are matters of law arising out of a consideration of the income tax code.

25 With regard to the first of these issues:-

26 2 "(1) For the chargeable period, the 12 months ending the 5th April, 1995, was Geraldine Gilligan a chargeable person?".

27 I now set out in summary form the principle submissions made on behalf of the parties on this issue.

28 On behalf of the Plaintiff it was submitted that Sections 194 and 195 of the Income Tax Act, 1967create circumstances in which, in the case of a married couple, it is the husband and the husband alone who is the chargeable person within the meaning of the Income Tax code and that nothing in the Finance Act, 1988has altered that position. It is submitted that these Sections apply to the present case and that the Plaintiff is not a chargeable person.

29 On behalf of the Defendants it is submitted that one looks at Section 105 of the Income Tax Act, 1967to identify the persons chargeable and they are the "persons......receiving or entitled to the income in respect of which tax.......is to be charged". It is submitted that since the Plaintiff is the person who received or was entitled to receive the income she is by virtue of this definition a chargeable person within the meaning of the code. Moreover, it is submitted that Section 194 of the Income Tax Act, 1967does no more than create a mechanism by which the Revenue is entitled to assess and charge a husband to tax in respect of his wife's income but that it does not interfere with the provisions of the Income Tax Act to which one must have regard in determining whether the wife is chargeable to tax.

30 Section 194 of the Income Tax Act, 1967provides:-

31 (a) For a husband and a wife to elect to be treated in accordance with that Section.

32 (b) That Section 195 provides that if...