Texaco (Ireland) Ltd v Murphy (No. 3)

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: McCarthy J.
• Judgment Date: 15 May 1992
• Docket Number: [S.C. No. 256 of 1988]
• Date: 15 May 1992

1992 WJSC-SC 2841

THE SUPREME COURT

Finlay C.J.

Hederman J.

McCarthy J.

256/88

TEXACO (IRL) LTD v. MURPHY

BETWEEN

TEXACO (IRELAND) LIMITED

APPELLANTS

AND

SEAN MURPHY INSPECTOR OF TAXES

RESPONDENT

Citations:

INCOME TAX ACT 1967 S428(9)

INCOME TAX ACT 1967 S550(1)

FINANCE ACT 1978 S46

FINANCE ACT 1976 S30(4)

INCOME TAX ACT 1967 S550

INCOME TAX ACT 1967 S550(2A)

MCGRATH V MCDERMOTT 1988 IR 258

REVENUE COMMISSIONERS V DOORLEY 1933 IR 750

INSPECTOR OF TAXES V KIERNAN 1981 IR 117

FINANCE ACT 1976 S30(3)

FINANCE ACT 1976 S30

Synopsis:

INTEREST

Tax

Corporation tax - Overpayment - Repayment - Interest - Calculation - Method - Taxpayer's claim to interest on sum repaid - Obligation to pay interest admitted - (256/88 - Supreme Court - 15/5/92) - [1992] 2 I.R. 300 - [1992] I.T.R. 352

|Texaco (Ireland) Ltd. v. Murphy|

REVENUE

Corporation tax

Overpayment - Repayment - Interest - Calculation - Method - Taxpayer's claim to interest on sum repaid - Obligation to pay interest admitted - Income Tax Act, 1967, s. 550 - Finance Act, 1976, s. 30 - Courts Act, 1981, s. 22 - (256/88 - Supreme Court - 15/5/92) - [1992] 2 I.R. 300 - [1992] I.T.R. 352

|Texaco (Ireland) Ltd. v. Murphy|

1 Judgment of McCarthy J. delivered the 15th day of May, 1992. [NEM DISS]

2 Texaco successfully appealed against the decision of Carroll J. in the High Court on appeal from the Special Commissioners in respect of the assessment made on Texaco in certain tax years. The result is that Texaco have overpaid tax in each of the three tax years and are entitled to be refunded the several amounts. It is not in issue that Texaco are entitled to interest on the amount of each overpayment; the issue is as to how that interest is to be calculated. This arises from the provisions of Section 428(9) of the Income Tax Act 1967which provides:

"Notwithstanding that a case has been required to be stated or is pending, tax shall be paid in accordance with the determination of the Special Commissioners or the Circuit Court as the case may be:"

3 Provided that, if the amount of the assessment is altered by the order or judgment of the Supreme Court or the High Court, then -

4 (a) if too much tax has been paid, the amount overpaid shall be refunded with such interest, if any, as the Court may allow; or

5 (b) if too little tax has been paid, the amount unpaid shall be deemed to be arrears of tax (except so far as any penalty is incurred on account of arrears), and shall be paid and recovered accordingly."

6 The amount of the assessment has been altered as a result of the judgment of this Court and, accordingly, falls within the subsection.

7 Mr. Nesbitt, for Texaco, has suggested alternative interest calculations on overpayments of tax:-

8 (a) the statutory rate on late payment/under payments as provided by Section 550(1) of the Act of 1967, as amended by Section 46 of the Finance Act 1978, producing a rate of 15% per annum.

9 (b) Under Section 30(4) of the Finance Act 1976which provides as follows:-

"Where an overpayment of tax is to be repaid under subsection (3), the overpayment shall carry interest at the rate or rates enforced by virtue of Section 550(1) of the Income Tax Act, 1967for the period from the date or dates...