Prodanov v Revenue Commissioners
| Jurisdiction | Ireland |
| Judge | Mr. Justice Keane |
| Judgment Date | 09 December 2016 |
| Neutral Citation | [2016] IEHC 708 |
| Docket Number | [2015 No. 268 R] |
| Court | High Court |
| Date | 09 December 2016 |
[2016] IEHC 708
THE HIGH COURT
REVENUE
Keane J.
[2015 No. 268 R]
Revenue – Practice and Procedures – S. 941 of the Taxes Consolidation Act 1997 ("TCA") – S. 130 and s. 132 of the Finance Act 1992 – Vehicle registered in another jurisdiction – Regulation 7(2) of the Vehicle Registration and Taxation Regulations (1992 Regulations')
Facts: The present case came by way of a case stated by the Appeal Commissioner for the opinion of the High Court at the request of the plaintiff. The central issue was as to whether the defendant was correct in refusing to classify the plaintiff's vehicle as a "motor caravan" and stated that the decision of the defendant was erroneous in point of law. The vehicle of the plaintiff belonged to another jurisdiction and was never previously registered in the State. The defendant relied upon s. 131, sub-s (a) of the Finance Act 1992 that stated that when a registered vehicle was converted, the prescribed particulars should be declared to the Commissioners. The defendant contended that the words, "living accommodation space," amounted to the words of restriction and hence, prevented the plaintiff's vehicle from coming within the definition of "category B vehicle" for the purpose of s. 130 of the 1992 Finance Act and thus, exposed him to the significantly higher rate of vehicle registration tax applicable to "category A vehicles" under s. 132 of that Act.
Mr. Justice Keane reversed the determination of the Appeal Commissioner. The Court observed that the present case did not deal with subsequent conversion of a vehicle previously registered but, instead, one of the case of registration of a vehicle previously converted. The Court held that although the defendant in exercise of the powers conferred on them under the 1992 Regulations had established specific additional requirements for the registration of converted vehicles previously registered in another jurisdiction but the text was not available on the defendant's website when the plaintiff sought the registration of his vehicle. The Court stated that the vehicle of the plaintiff was a motor caravan as defined under s. 130 of the 1992 Act.
This is an appeal by way of case stated for the opinion of the High Court pursuant to s. 941 of the Taxes Consolidation Act 1997 (" TCA"). Ronan F. Kelly ("the Appeal Commissioner") has stated the case. It arises from an appeal brought before the Appeal Commissioner by the appellant taxpayer, Dr Emil Prodanov ("Dr Prodanov"). On that appeal, the Appeal Commissioner found for the Revenue Commissioners ("the Commissioners"). Dr Prodanov requested that the Appeal Commissioner state a case for the opinion of the High Court.
The central question that Dr Prodanov, a litigant in person, raises is whether, in May 2014, the Commissioners were correct as a matter of law in refusing to classify a vehicle that he owns as a "motor caravan", and whether, in a decision communicated to Dr. Prodanov on the 10th April 2015, the Appeal Commissioner was correct to uphold that decision.
Dr Prodanov purchased a U.S. manufactured 1992 Ford E-150 Econoline passenger van in the United Kingdom on the 21st March 2014 and brought it into the State the next day. He carried out modifications to the vehicle to make it suitable for use as a motor caravan, before presenting it to the National Car Testing Service ("NCTS") for inspection and entry onto the register of vehicles maintained by the Commissioners under s. 131 of the Finance Act 1992 ("the 1992 Act"), as amended. As its name suggests, vehicle registration tax ("VRT") is the tax payable on the registration of a motor vehicle in the State, under s. 132 of the 1992 Act.
S. 132 of the 1992 Act operates by dividing vehicles into four categories: A, B, C and D for the purpose of the charge of excise duty. The categories that we are concerned with here are Categories A and B. The various categories are defined in the interpretation provisions of s. 130 of the 1992 Act. Thus, we learn that "category A vehicle" means "a category M1 vehicle", and "category B vehicle" means, amongst other things, "a motor caravan."
At this point, EU law intervenes because, as s. 130 of the 1992 Act also provides, "category M1 vehicle" has the same meaning as in Annex II of Directive 2007/46/EC, and "motor caravan" has the same meaning as in paragraph 5.1 of Annex II of the same Directive. S. 130 explains, perhaps superfluously, that " Directive 2007/46/EC" means Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 (as amended) establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.
Before turning to consider the relevant provisions of Directive 2007/46/EC, I pause to reflect on the significance of the correct categorisation of Dr Prodanov's vehicle. Under s. 132 of the 1992 Act, a Category A vehicle attracts a VRT excise duty of up to 36% of the value of the vehicle, whereas a Category B vehicle (which, as we have seen, includes a "motor caravan") attracts a duty of only 13.3% of that value. It follows that the relevant provisions concern the imposition of a tax.
The relevant provisions of EU law are to be found in Commission Regulation (EU) No 678/2011 of 14 July 2012 replacing Annex II and amending Annexes IV, IX and XI to Directive 2007/46/EC. We are concerned with the replacement "Annex II."
Section 1 of Part A of Annex II, as replaced, provides in relevant part as follows:
"1.1. Category M Motor vehicles designed and constructed primarily for the carriage of persons and their luggage.
1.1.1. Category M1 Vehicles of category M, comprising not more than eight seating positions in addition to the driver's seating position.
Vehicles belonging to category M1 shall have no space for standing passengers.
The number of seating positions may be restricted to one ( i.e. the driver's seating position)."
Under the heading "Vehicle subcategories", Section 2 of Part A of Annex II provides in relevant part as follows:
"2.2 Special purpose vehicles
2.2.1. ' Special purpose vehicle (SPV)' means a vehicle of category M...having specific technical features in order to perform a function which requires special arrangements and/or equipment..
...
The various types of special purpose vehicle are defined and listed in Section 5."
Section 5 of Part A of Annex II comprises a table under the heading "Special purpose vehicles." The entry at point 5.1. in that table is for "motor caravan." The following text appears opposite that entry in the column headed "Definition":
"A vehicle of category M with living accommodation space which contains the following equipment as a minimum:
(a) seats and table;
(b) sleeping accommodation which may be converted from the seats;
(c) cooking facilities;
(d) storage facilities.
This equipment shall be rigidly fixed to the living compartment.
However, the table may be designed to be easily removable."
Under s. 131, sub-s. 1 (b) of the 1992 Act, the Commissioners may enter in the register of vehicles such particulars in relation to a vehicle's ownership and connected matters as they consider appropriate.
S. 131, sub-s. 2 (a) of the 1992 Act provides that, for each vehicle that is not a registered vehicle on or after the 1st January 1993, prescribed particulars shall be declared to the Commissioners for the purpose of registration. Since a registered vehicle is plainly one for which there is an entry on the register of vehicles in the State, and since the vehicle we are dealing with appears to have been purchased in the United Kingdom and never previously registered in the State, one would have thought that this would be the applicable provision in Dr Prodanov's case.
The Commissioners rely instead upon s. 131, sub-s. 3 (a) of the 1992 Act. It provides that, "where a registered vehicle is converted, the prescribed particulars shall be declared to the Commissioners for the purpose of entry in the register of particulars in relation to the conversion and the Commissioners may enter in the register such particulars in relation to the conversion as they consider appropriate." The Commissioners invoke this provision, which appears to me to refer to vehicles previously registered in the State and then converted, in order to rely on s. 131, sub-s. 3 (b) of the 1992 Act, which states that "[t]he owner of a vehicle which has been converted shall deliver to the Commissioners with the declaration under paragraph (a) in relation to the conversion the certificate in relation to the vehicle and the Commisssioners shall enter on the certificate such particulars in relation to the vehicle as they consider appropriate." As s. 130 of the 1992 Act makes clear, a "certificate" is a certificate of registration issued under s. 131, sub-s. 5 of the 1992 Act. This would tend to confirm that s. 131, sub-s. (3) is of no application in the present case, since Dr Prodanov could hardly have been expected to deliver a certificate of registration to the Commissioners as part of his efforts to obtain the same certificate from the Minister for the Environment and Local Government under s. 131, sub-s. 5 (a) of the 1992 Act.
The Commissioners go on to rely upon the terms of Regulation 7 (2) of the Vehicle Registration and Taxation Regulations 1992 ("the 1992 Regulations"), as amended, whereby, "where a registered vehicle is converted", certain specified particulars must be provided to the Commissioners, together with "such other particulars, if any, as the Commissioners may...
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