S S and Others v A Tax Appeal Commissioner

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Mr. Justice McDonald
• Judgment Date: 09 May 2025
• Neutral Citation: [2025] IECA 96
• Docket Number: Record Number: 2024 266

Between:

J.S.S., J.S.J., T.S., D.S. and P.S.

Applicants/Appellants

and

A Tax Appeal Commissioner

Respondent

Criminal Assets Bureau

Notice Party

[2025] IECA 96

Meenan J.

McDonald J.

Collins J.

Record Number: 2024 266

High Court Record Number: 2023/179JR

THE COURT OF APPEAL

Judicial review – Tax assessments – Burden of proof – Appellants appealing against tax assessments – Whether the appellants bore the burden of proof on their appeals

Facts: The appellants appealed to the Court of Appeal from a High Court judgment ([2024] IEHC 565) in which Owens J dismissed their application for judicial review of a decision of the Tax Appeal Commission (TAC) given on 1 December 2022 in relation to a number of tax appeals brought by the appellants under Part 40A of the Taxes Consolidation Act 1997 against tax assessments and amended assessments. In its decision, the TAC determined that the appellants bore the burden of proof in their appeal before the TAC in relation to the issue of residence which was the sole issue addressed in the decision. The appellants argued that, while the TAC, absent a challenge to chargeability, may presume that the person is a chargeable person, that is not the case where chargeability is challenged. In such circumstances, the appellants argued that it was incumbent on the TAC to hear and determine the issue of chargeability in order to decide whether the TAC had jurisdiction to continue to hear and determine the appeals. It was further submitted that the burden on an appellant to displace a tax assessment relates solely to quantum “after it has been determined that the person is a chargeable person”. It was further submitted that the issue of chargeability goes to the root of the powers of both the assessing tax inspector and the TAC and that “a finding of non-chargeability means that there was never any power to raise a valid enforceable assessment”. In addition, the case was made that issues relating to chargeability on grounds of residence are sui generis since they “do not relate to quantum but to the power to raise the assessment”.

Held by McDonald J that none of the arguments made on behalf of the appellants withstood scrutiny. He held that they had failed to put forward any plausible basis to support their case that the notice party, the Criminal Assets Bureau, bears the legal burden of proof in relation to the issue of residence; it would therefore be for the appellants to put forward sufficient evidence before the TAC to establish, on the balance of probabilities, that they were not resident in the State within the meaning of s. 819 of the 1997 Act during the relevant tax years in issue in their appeals. Paraphrasing Chadwick LJ in Wood v Holden (Inspector of Taxes) [2006] 1 WLR 1393, McDonald J held that the relevant facts relating to the appellants’ movements were best known to them; they should have no difficulty in giving evidence relevant to the test set out in s. 819.

McDonald J held that the appellants had failed to establish that the decision of the High Court judge was wrong in any respect. In McDonald J’s view, both the decision of the High Court and the underlying decision of the TAC were entirely correct. He held that the appellants bore the burden of proof on their appeals against the tax assessments in issue and this applied equally to their challenge to the assessments on the grounds that they claimed not to have been resident in the State within the meaning of the 1997 Act during the periods in issue. McDonald J dismissed their appeal and affirmed the decision of the High Court.

Appeal dismissed.

NO REDACTIONS NEEDED

JUDGMENT of Mr. Justice McDonald delivered on 9 ^th May 2025

Introduction

1 . This is an appeal from a very careful and comprehensive judgment of Owens J. in the High Court ( [2024] IEHC 565) delivered on 30 ^th July 2024 in which he dismissed the appellants' application for judicial review of a decision of the Tax Appeal Commission ( “TAC”). The decision of the TAC in issue was given on 1 ^st December 2022 in relation to a number of tax appeals brought by the appellants under Part 40A of the Taxes Consolidation Act, 1997 (as amended) ( “the 1997 Act”) against the tax assessments and amended assessments described in para. 3 below. In its decision, the TAC determined that the appellants bear the burden of proof in their appeal before the TAC in relation to the issue of residence which was the sole issue addressed in the decision. It should be noted, in this context, that the appellants claim to have no liability to tax in circumstances where they assert that they are not resident in the State for tax purposes. The TAC's decision of 1 ^st December 2022 should be read with a previous decision of the TAC of 13 ^th October 2022 in which a similar conclusion was reached. The circumstances in which a second decision came to be made is addressed in more detail below. It is sufficient to record, at this point, that it arose in circumstances where counsel representing the appellants at a hearing on 10 ^th October 2022 did not refer to a number of authorities which the appellants subsequently claimed provide support for their case that they do not bear the burden of proof in relation to the issue of residence.

Background

2 . According to the evidence before the High Court, each of the appellants are members of the travelling community. Although they have addresses in this jurisdiction, the evidence given by their tax consultant, Mr. Eugene Dolan, is to the effect that they practice a nomadic lifestyle abroad “with the result that their caravans constitute the centre of their personal domesticity”. In Mr. Dolan's affidavit, the first, second, third and fourth appellants were all described as tarmacking contractors who carry on business outside the State “in the main at various locations in other EU countries”. They are each described as self-employed. The fifth appellant was also stated to be self-employed.

3 . According to Mr. Dolan, the Criminal Assets Bureau ( “CAB”) on 31 ^st March 2026 issued amended tax assessments for the income tax years 2004 to 2014 to each of the first, second and third named appellants. Insofar as the fourth named appellant is concerned, Mr. Dolan said that, similarly on the 1 ^st March 2016, CAB issued amended income tax assessments for the income tax years 2006 to 2014 and also, on the same date, issued income tax assessments for the years 2004 and 2005.

4 . Mr. Dolan further says that on 31 ^st March 2016, income tax assessments were issued to the fifth named appellant for the tax years 2005 to 2008 and, on the same date, CAB also issued amended income tax assessments for the years 2009 to 2014.

5 . Each of the appellants appealed the assessments and amended assessments. Each of the appeals is dated 26 ^th April 2016, and in each one of them the case is made that the appellants were not resident or ordinarily resident for income tax purposes in the State in any of the tax years in issue. In each appeal, it is alleged that the appellant lives a nomadic lifestyle and has spent considerable periods of time in those years in a number of countries. These vary from appellant to appellant but include the United Kingdom, France, Germany, Canada and Italy.

6 . Each of the appeals bears the respective Personal Public Service number of the relevant appellant. It should also be noted that, on the basis of the materials exhibited to the replying affidavit of Kevin McMeel sworn on behalf of CAB on 8 ^th November 2023, the first and second appellants have previously made returns to the Revenue Commissioners. The second appellant made a return for the 2008 tax year in which he was described as “Citizen of Ireland – resident but not ordinarily resident in the State”. The first appellant made a return for the 2012 tax year in which he was described in an identical way.

7 . The appeals initially came before the TAC in 2018, following which the TAC gave a preliminary ruling in relation to the admissibility of certain of the appeals. That ruling was challenged in judicial review proceedings which were unsuccessful in the High Court but which were subject to an appeal to this Court. In a judgment delivered by Power J. ( [2020] IECA 73) the appeal was allowed and the matters were remitted to the TAC where they subsequently came on for hearing before a different Commissioner. On 29 ^th June 2022, following a contested three day hearing, the TAC gave a preliminary decision in relation to the admissibility of the appeals following which the resumption of the hearing was fixed for Monday 10 ^th October 2022. It appears that, in its decision of 29 ^th June 2022, the TAC held that a non-resident would not be a “chargeable person” within the statutory meaning of that term.

8 . The hearing of the appeal subsequently resumed in October 2022 during which the TAC heard oral submissions regarding which party bore the onus of proof in establishing the tax residence status of the appellants for the relevant years of assessment. The parties requested a preliminary decision on that issue in light of the fact that the hearing was scheduled to continue on 13 ^th and 14 ^th October 2022. With impressive speed and efficiency, the TAC issued its preliminary ruling on 13 ^th October 2022 in which the Commissioner very clearly set out her reasons why she was of the view that the onus of proof in relation to residence lay on the appellants. In support of that conclusion, the Commissioner referred to the well-known decision of Gilligan J. in T.J. v Criminal Assets Bureau [2008] IEHC 168. After this ruling was given, the hearing of the appeals resumed and evidence was given by two witnesses on behalf of the appellants, one of which was the tax agent who had prepared the tax returns described above. Both witnesses were cross-examined by counsel on behalf of CAB. The hearing did not conclude within the allotted time in October...