Used Car Importers of Ireland v The Minister for Finance and Others

JurisdictionIreland
JudgeMr. Justice Murphy
Judgment Date15 March 2013
Neutral Citation[2013] IEHC 128
CourtHigh Court
Docket Number[1995 No. 1988 P.]
Date15 March 2013
BETWEEN
USED CAR IMPORTERS OF IRELAND
PLAINTIFF
AND
THE MINISTER FOR FINANCE, REVENUE COMMISSIONERS, IRELAND AND THE ATTORNEY GENERAL
DEFENDANTS

[2013] IEHC 128

[1995 No. 1988 P.]

THE HIGH COURT

Taxation law - Administrative law -Revenue Commissioners - Used car imports - Vehicle Registration Tax - Discrimination - Domestic trade - Transparency - S 133 Finance Act 1992

Facts: The plaintiff company was an importer of used cars from Japan and other EU Member States and sought a mandatory injunction requiring the second named defendant to publish to the plaintiffs the values for vehicles registration tax for the purposes of the full range of new and used vehicles. The plaintiff alleged that the manner in which the Revenue Commissioners had assessed and continued to assess VRT on motor vehicles imported was unlawful and contrary to s. 133 Finance Act 1992, as amended, and sought inter alia a declaration that the manner in which VRT was assessed was contrary to the principles of legitimate expectations, proportionality, equality and legal certainty. The plaintiff alleged that the computer system of Revenue did not take any account of the actual sale price of a vehicle and claimed that the manner in which the Revenue operated the system was secretive, arbitrary and lacking in transparency and legal certainty. The plaintiff also claimed that the system of valuation discriminated in favour of the domestic car trade and claimed loss to its business as a result.

Held by Murphy J. that the Court did not have any evidential basis as to loss. It was always open to the plaintiff to appeal an assessment. There was no evidence that vehicles imported outside the EU were treated unequally. Loss of market share could not be contributed to VRT. It was not appropriate to grant the mandatory injunction sought.

Mr. Justice Murphy
JUDGMENT of Mr. Justice Roderick Murphy dated the 15th day of March 2013
1

1.The Proceedings

1.1

Plenary Summons of the 15th March, 1995

1.1

1.These proceedings were brought by way of plenary summons issued on the 15th March 1995. Some interlocutory applications followed. Notice of intention to proceed was served on three occasions between October 1999 and October 2010. Notice of trial was served on the 7thApril 2011. The matter was heard over 33 days from March to June 2012. The plaintiff company claimed a mandatory injunction requiring the second named defendant the Revenue Commissioners (‘Revenue’) to ‘publish to the plaintiffs the values for Vehicle Registration Tax (‘VRT’) purposes of the full range of new and used motor vehicles and to publish revised values from time to time as they occur’. The plaintiff also sought declarations of unconstitutionality of the VRT enabling legislation, its being contrary to European Community law and that the manner of its implementation was unlawful.

1.1

2.The general endorsement seeks:-

• A declaration that the manner in which and extent to which the Revenue have assessed and continued to assess VRT on motor vehicles imported by the plaintiff is unlawful and contrary to the provisions of s. 133 of the Finance Act 1992, as amended by s. 9 of the Finance (No. 2) Act 1992.

• A declaration that the provision as so amended is unconstitutional in that it fails to vindicate the property rights of the plaintiff and it infringes its right to equality.

• A declaration that provisions as so amended is contrary to the provisions of European Community law and in particular Article 3(a), 3(c) and 3 (g), Articles 7(a), Article 9, Article 12, Article 30 and Article 95 of the Treaty of Rome and the Sixth VAT Directive 388/77.

• A declaration that the manner in which and extent to which Revenue has assessed and continues to assess VRT on motor vehicles imported by the plaintiff is contrary to the Constitution and fails to vindicate the property rights of the plaintiff and infringes its right to equality.

• A declaration that the manner in which and extent to which Revenue has assessed and continues to assess VRT on motor vehicles imported by the plaintiff is contrary to the provisions of European Community law and in Articles 3(a), 3(c) and 3 (g), Article 7(a), Article 9, Article 12, Article 30 and Article 95 of the Treaty of Rome and the Sixth VAT Directive 388/77.

There are further claims based on legitimate expectation, proportionality, equality and legal certainty:

• A declaration that the manner in which and extent to which the Revenue has assessed and continues to assess VRT on motor vehicles imported by the plaintiff is contrary to the principles of legitimate expectations, proportionality, legality, equality and legal certainty.

The plaintiff also sought damages:

• A mandatory injunction directing the return of all excess VRT paid by the plaintiffs and if necessary, an order for the taking of an account and inquiry.

• Damages for conversion, detinue, negligence, wrongful interference with constitutional rights in European law, misfeasance in public office.

• Such further and other relief as the court shall seem fit.

• Costs.

1.1

3.The Chief State Solicitor (CSSO) entered an appearance on behalf of the first, third and fourth named defendants on the 22nd March 1995. The Revenue Solicitor entered an appearance on behalf of the Revenue on the 19th April, 1995.

1.2

Summary of Statement of Claim 28th July 1995

1.2

1.The statement of claim describes the plaintiff as a limited liability company having its registered office at Marina Commercial Park Centre, Park Road, Cork. The business of the plaintiff is the importation and sale of used motor vehicles, particularly from Japan but also from other member states of the European Union.

1.2

2.On the importation and sale of motor vehicles there are two taxes levied, VAT and VRT. VRT was introduced with effect on and from the 1st January 1993, in accordance with the provisions of s. 132 of the Finance Act 1992, as amended by s. 8 of the Finance (No. 2) Act 1992.

1.2

3.Section 133 of the Finance Act 1992, as amended by s. 9 of the Finance (No. 2) Act 1992 provides that chargeable value of vehicles for VRT shall be the open market selling price (‘OMSP’). In the case of new vehicles VRT is further defined as the price, inclusive of all taxes and duties, which in the opinion of the sole wholesale distributor, a model of that make and specification might reasonably be expected to fetch on a first arms length sale thereof in the open market in the State by retail.

1.2

4.In the case of second hand vehicles the OMSP is further defined as the price, inclusive of all taxes and duties, which, in the opinion of the Revenue, the vehicle might reasonably be expected to fetch on a first arms length sale thereof in the State by retail.

1.2

5.The plaintiff complains that the computer system Revenue established for the purposes of calculating the OMSP does not take any account of the actual sale price of a particular vehicle but, instead, applies a chargeable value for VRT purposes obtained by the system. The plaintiff also complains that the declared value of new vehicles and the tables of value of second hand vehicles are not published and that the Revenue refused to supply values to the plaintiff. Further, the plaintiff complains that the Revenue operated a system whereby an estimated amount of VRT in relation to a particular vehicle might be obtained in advance, but Revenue could increase this estimate if it feels that it has been underestimated.

1.2

6.The plaintiff complains that the manner in which the Revenue has operated this valuation system is secretive, arbitrary and lacking in transparency and legal certainty. As a result the plaintiff faces uncertainty when purchasing and selling stock as it is impossible to calculate its eventual VRT liability. Consequently the overall trade of the plaintiff has been in progressive decline. This, the plaintiff claims, has caused it to suffer loss and damage.

1.2

7.The plaintiff states that the values used by Revenue to calculate VRT have been on many occasions well in excess of actual prices capable of being obtained by the plaintiff which results, in those cases, in the VRT being a much higher proportion of the actual sale price than the current rate for the tax. Further, since the introduction of VRT the plaintiff claims that the value of used imported motor vehicles imposed by the Revenue for the purpose of levying the tax have been subject to arbitrary increases, out of line with the actual market price.

1.2

8.The plaintiff claims that the system of valuation, as established by law and as operated by Revenue, discriminates in favour of the domestic car trade and against the trade in imported used cars. This is done, it is claimed, by:-

• Permitting domestic new car trade to determine its values.

• Imposing artificially high values on imported used cars.

• Discriminating against undertakings, such as the plaintiff, trading in imported used cars in that the added value and the dealer”s margin in a domestic used car transaction is not subject to VRT, whereas in imported used car transactions importers such as the plaintiff pay VRT on a value which purports to correspond with the retail price.

• Charging VRT on imported used cars in excess of the residual VRT incorporated in the value of domestic used vehicles of the same characteristics; alternatively it is impossible to establish whether the VRT charged on imported used vehicles exceeds the said residual tax or not.

1.3

Defence of the first, third and fourth defendants and defence of the second defendants 26th September, 1995

1.3

1.In identical defences both the State parties and the Revenue say that they have not established a computer system of valuing imported second hand vehicles as alleged. Revenue state that it takes into account all relevant factors and characteristics which affect or influence the ...

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1 cases
  • Used Cars Importers Ireland Ltd v Minister for Finance
    • Ireland
    • Court of Appeal (Ireland)
    • 6 November 2020
    ...also claimed for the return of taxes paid by it and/or damages in a total amount of €131M. Following a thirty-three-day trial Murphy J ([2013] IEHC 128) refused UCII all of the relief claimed by it. USII appealed from that dismissal. Held by Murray J that: (1) insofar as the trial Judge pla......

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