Murphy v The Revenue Commissioners
| Jurisdiction | Ireland |
| Judge | Ms. Justice Pilkington |
| Judgment Date | 04 June 2020 |
| Neutral Citation | [2020] IEHC 295 |
| Docket Number | [Record No. 2017/196 R.] |
| Court | High Court |
| Date | 04 June 2020 |
IN THE MATTER OF A CASE STATED PURSUANT TO SECTION 941 OF THE TAXES CONSOLIDATION ACT, 1997
[2020] IEHC 295
Pilkington J.
[Record No. 2017/196 R.]
THE HIGH COURT
Case stated – Revenue audit – Rule of law – Appellant seeking to appeal by way of case stated – Whether there was no rule of law that precluded the taking of any steps in a revenue audit
Facts: In a case stated signed by Judge Comerford on the 23rd August, 2017, nine questions were raised for consideration by the High Court: “(1) Was I correct in holding that there was no rule of law (other than as might arise by way of estoppels) that precluded the taking of any steps in a Revenue Audit, while a Revenue Enquiry was in being. (2) In respect of my ruling that assessments raised in this case were not prohibited by the terms of Section 955(2) of the [Taxes Consolidation Act 1997], and on the proper construction of that Section 955, was I correct in holding that there was no rule of law (other than as might arise by way of estoppels) that any steps taken in the course of Revenue Audit, as at the time when a Revenue Enquiry was in place, would only be determined to take effect when effective notice was given that the Revenue enquiry was no longer proceeding. (3) In respect of my ruling that assessments raised in this case were not prohibited by the terms of Section 955(2) of the 1997 Act, and on the proper construction of Section 955, was I correct in holding that the requirement that returns made by a taxpayer make full and material disclosure of all matters necessary to make an assessment is a precondition without which a taxpayer cannot rely upon any time limit imposed by s. 955 and that the disclosure of full details by way of prompted disclosure or otherwise in the course of a Revenue Audit, subsequent to the making of returns, does not satisfy this condition. (4) Was I correct in holding that the legal rules relating to the strike out of civil proceedings for gross and inordinate delay had no effective application in this Revenue Appeal. (5) Was I correct in holding that it not within the scope of this Appeal to apply the European Convention on Human Rights as might arise from any delay on the part of the Revenue Commissioners. (6) Was I correct in holding that the law relating to estoppel arising from conduct on the part of the Revenue Commissioners could be applied by the Circuit Court within a Revenue appeal from the decision of an Appeal Commissioner to the Circuit Court. (7) Was my finding that no estoppels arose on the facts of this case in accord with the law relating to estoppel. (8) Was I correct in holding that an error in a statement of an amount assessed, in a statement of the total or any amounts assessed, or in a statement of an amount due, on the face of any document giving notice of an assessment or assessments does not preclude the establishment at hearing before the Appeal Commissioner or the Revenue Commissioners of a different amount. (9) Was I correct in law holding that it was not necessary to consider the detail of the appellant’s dispute with a third party, save and to the extent that I deemed it to be of potential relevance to the operation of any estoppel.”
Held by Pilkington J that, in respect of questions 4, 5 and 9 of the case stated, the appellant having submitted that “it is unnecessary for the court to consider this question” and the respondent having sought an affirmative answer, she would confirm the answer of ‘Yes’ in respect of those three categories. She held that there was no rule of law within question 1 to prevent any steps taken in the course of the revenue audit whilst a revenue enquiry was in being; the answer to the question was “Yes”. In her view, there was no rule of law within ss. 955 or 955(2) or otherwise that the revenue audit was not deemed to take effect prior to effective notice being given that the enquiry was not proceeding; the answer to question 2 was “Yes”. She held that s. 955(2) applied and the four year limit was not available to the appellant; the answer to question 3 was “Yes”. She held that the law of estoppel does not arise in the adjudication of the Circuit Court, in circumstances of an appeal from the Appeal Commissioners; the answer to question 6 was “No” and the answer to question 7 did not arise, given her answer to question 6. She held that the relevant assessment was corrected and the position was notified to the appellant taxpayer; the answer to question 8 was “Yes”.
Case stated.
This is an appeal by way of case stated from the judgment of His Honour Judge Comerford on the 28th February, 2017.
In the case stated signed by the Judge on the 23rd August, 2017, nine questions are raised for consideration by the High Court. They are as follows:-
“(1) Was I correct in holding that there was no rule of law (other than as might arise by way of estoppels) that precluded the taking of any steps in a Revenue Audit, while a Revenue Enquiry was in being.
(2) In respect of my ruling that assessments raised in this case were not prohibited by the terms of Section 955(2) of the 1997 Act, and on the proper construction of that Section 955, was I correct in holding that there was no rule of law (other than as might arise by way of estoppels) that any steps taken in the course of Revenue Audit, as at the time when a Revenue Enquiry was in place, would only be determined to take effect when effective notice was given that the Revenue enquiry was no longer proceeding.
(3) In respect of my ruling that assessments raised in this case were not prohibited by the terms of Section 955(2) of the 1997 Act, and on the proper construction of Section 955, was I correct in holding that the requirement that returns made by a taxpayer make full and material disclosure of all matters necessary to make an assessment is a precondition without which a taxpayer cannot rely upon any time limit imposed by s. 955 and that the disclosure of full details by way of prompted disclosure or otherwise in the course of a Revenue Audit, subsequent to the making of returns, does not satisfy this condition.
(4) Was I correct in holding that the legal rules relating to the strike out of civil proceedings for gross and inordinate delay had no effective application in this Revenue Appeal.
(5) Was I correct in holding that it not within the scope of this Appeal to apply the European Convention on Human Rights as might arise from any delay on the part of the Revenue Commissioners.
(6) Was I correct in holding that the law relating to estoppel arising from conduct on the part of the Revenue Commissioners could be applied by the Circuit Court within a Revenue appeal from the decision of an Appeal Commissioner to the Circuit Court.
(7) Was my finding that no estoppels arose on the facts of this case in accord with the law relating to estoppel.
(8) Was I correct in holding that an error in a statement of an amount assessed, in a statement of the total or any amounts assessed, or in a statement of an amount due, on the face of any document giving notice of an assessment or assessments does not preclude the establishment at hearing before the Appeal Commissioner or the Revenue Commissioners of a different amount.
(9) Was I correct in law holding that it was not necessary to consider the detail of the appellant's dispute with a third party, save and to the extent that I deemed it to be of potential relevance to the operation of any estoppel.”
The appeal was heard in Tralee, County Kerry on 7th February, 2017 and is an appeal pursuant to s. 942 of the Taxes Consolidation Act, 1997 (“ TCA”).
It concerns the following Revenue assessments:-
| Tax | Period/Time | Amount |
| Income Tax | 2006 | € 149,687 |
| CGT | 2006 | € 98,137 |
| VAT | 01/04/05 – 31/08/05 | € 49,160 |
| VAT | 01/01/06 – 28/02/06 | € 4,176 |
| VAT | 01/09/06 – 31/10/06 | € 1,334 |
| Total: € 302,494 |
The income tax assessment arose pursuant to a notice of amended assessment issued on the 27th September, 2013.
The CGT assessment arose pursuant to a notice of assessment of 26th September, 2013.
The VAT assessments issued pursuant to notice of assessments on 2nd October, 2013.
Those assessments arose following a Revenue audit commenced in April, 2009, which was suspended in May, 2009 as a result of the taxpayer's affairs coming under Revenue enquiry, with the audit resuming in May, 2013.
Within the case stated itself, His Honour Judge Comerford states that the issues that arose for his determination were as follows:-
“(a) Whether any legal issues arose concerning the delay between the commencement of the Revenue Audit in April, 2009 and the issue of the Assessments in September/October, 2013;
(b) Whether the letter of the 20th January, 2014 issued to the Taxpayer indicating that the Revenue enquiry was not proceeding was of any legal significance in the context of the Assessments that had issued;
(a) Whether any legal issue turned on the fact that the VAT Assessment dated 2nd October, 2013 contained a computational error;
(b) Whether the Taxpayer's dispute with his professional body was of any legal significance in the context of the appeal before me.”
I understand that the taxpayer appellant (“the taxpayer”) appeared as a litigant in person. I further understand he is a legally qualified person.
The court has also set out the facts not in dispute between the parties in the following terms:-
(a) The taxpayer made income tax returns for 2006 and 2007 on the 30th day of March, 2009 showing a liability of €4,669.72 and €4,545.42 respectively. A supplementary VAT return for the period from April to August, 2005 was aslo filed seeking a VAT repayment in the sum of €32,184.
(b) A Revenue audit letter issued on the 6th April, 2009 and the audit commenced on the 29th...
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