Re Quinlan

JurisdictionIreland
CourtSupreme Court (Irish Free State)
Judgment Date14 July 1928
Date14 July 1928

Supreme Court.

In re Quinlan.
In the MATTER of PATRICK J. QUINLAN, a Bankrupt

Bankruptcy - Proof of debt - Bankrupt's assessments for income tax, Schedule D - No appeal taken against assessment - Claim by Official Assignee to re-open assessments - Assessments "binding and conclusive"- Irish Bankrupt and Insolvent Act, 1857 (20 & 21 Vict. c. 60),sect. 24 - Bankruptcy (Ireland) Amendment Act, 1872 (35 & 36 Vict. c. 58), sect. 66 - Income Tax Act, 1918 (8 & 9 Geo. 5, c. 40), sect. 195 -Constitution of the Irish Free State (Saorstát Éireann éireann) Act, 1922 (No. 1 of 1922), Sch. I, Art. 64.

Application on behalf of the Revenue Commissioners for an order that the order of the Chief Registrar in Bankruptcy, dated the 9th day of March, 1927, be rescinded, and that in lieu thereof it might be declared that the assessments on the bankrupt for income tax were conclusive and binding on the Assignees, and for an order that the Revenue Commissioners might be admitted as creditors for the amount of the said assessments.

The bankrupt carried on business as a grocer and publican in Tralee. He failed to carry an arrangement, and he was adjudicated bankrupt on the 4th December, 1925, the petition for arrangement having been filed on the 26th November, 1923. Assessments for income tax had been made on him in respect of several years under Schedule E in respect of his employment as a Town Rate Collector for the Tralee Urban District Council, and under Schedule D in respect of his profits and gains as a grocer and publican. The view taken by the Chief Registrar in Bankruptcy was that, as against the Assignees, an assessment on the bankrupt for income tax was not conclusive; that the facts as to the bankrupt's position when the assessments were made, and the variety of the claims made for income tax, were amply sufficient to justify the Assignees in requiring that the amount for which the debtor ought to be liable should be shown. The Chief Registrar accordingly adjourned the Sitting (which was held to investigate the claims made by the Revenue Commissioners to be admitted as creditors for the amount of the several assessments), to be re-entered when the Revenue Commissioners were prepared to prove that the amount of the assessments made were just and proper, having regard to the bankrupt's income at the material times, or, if this could not be done, to show for what amount they should be justly entitled to prove.

The Assignees appealed to the Supreme Court (1).

The Supreme Court held, affirming Johnston J., that assessments for income tax under Schedule D of the Income Tax Act, 1918, made upon a person who becomes bankrupt and from which no appeal had been taken, cannot be questioned by the Official Assignee upon proof of debts, and the Revenue Commissioners cannot be called upon to prove that the amounts assessed were just and proper, having regard to the bankrupt's income at the material times, the assessments being, in default of appeal, "final and conclusive" under sect. 195 of the Income Tax Act, 1918.

In re Calvert, [1899] 2 Q.B. 145, followed.

Cur. adv. vult.

Johnston J. :—

This matter comes before me by way of appeal from a ruling of the Chief Registrar upon a claim made by the Revenue Commissioners to be admitted as creditors for the amount of certain assessments for income tax made on the bankrupt and not appealed from by him. The Registrar, refusing to follow the decision of In re Calvert(1), ruled that the assessment upon the bankrupt was not conclusive, and that the Assignees were entitled to call upon the Commissioners to prove that the amounts assessed were just and proper, having regard to the bankrupt's income at the material times.

It has been argued on behalf of the Assignees that it is highly desirable, in the interest of equality, that they should have the power of investigating in this Court the amount of assessment for income tax from which the taxpayer had not appealed. I do not know what the attitude of the Assignees would be if the bankrupt before adjudication had appealed from the assessment to the Special Commissioners, and thence to the Circuit Court, and had failed on his appeal; or, alternatively, if he had appealed to the Commissioners and had not proceeded any farther. It is...

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