McCullough (HMIT) v Gurcharan Singh Ahluwalia (2004)
The district judge had been bound by certificates issued under Taxes Management Act 1970 s.70 to establish that there had been sufficient evidence to show that tax liability had been due and unpaid by the appellant.
The defendant (G) appealed against the dismissal of his appeal in proceedings where judgment had been entered favouring the claimant (the Revenue) in respect of income tax arrears and national insurance contributions. In 1997, the Revenue commenced an enquiry into G's tax affairs that resulted in amended assessments being raised pursuant to the Taxes Management Act 1970 s.34 and s.36. G appealed the amended assessments to the General Commissioners. In the meantime a tax consultant (M), retained by G in relation to the appeal to the commissioners, reached a settlement with the Revenue that represented G's total tax liability for the years in question. The Revenue wrote to M stating that in any event it would ask the commissioners to confirm at the forthcoming hearing the figures agreed, assuming that payment was received as agreed. The commissioners made the determination in accordance with the figures. Subsequently, G failed to pay the sums agreed under the settlement and the Revenue issued proceedings. G claimed that the appeal to the commissioners had still been live on the grounds that it had not been "determined" and that the amount claimed in the proceedings had differed from the amount of tax that had been proposed by way of settlement. At a preliminary hearing the district judge entered judgment in favour of the Revenue, having concluded that certificates issued under s.70 of the 1970 Act had been "sufficient evidence" that the sums had been due and unpaid. G appealed that decision on the grounds that the district judge had been wrong to have treated the s.70 certificates as precluding him from challenging the amounts alleged to have been due, and that the district judge had been wrong to hold that G had been bound by the commissioners' determination when he had been seeking a review of that determination. The appeal judge found that there had been a determination. He noted that G had applied to review the commissioners' determination eight months after it had been given and that it had been incredible that almost three years after the determination it could be suggested that the commissioners had still been considering whether to review its determination. He accordingly dismissed G's appeal. G appealed that decision. G argued, inter alia, that (1) the district judge had been wrong to have regarded himself as bound by the s.70 certificates; (2) there had been no "determination" by the commissioners in that there had not been a hearing on the merits, and that accordingly the appeal to the commissioners remained live; and (3) in any event G had not been advised of his rights of appeal.
The district judge had been bound by the s.70 certificates. It had not been necessary in the instant case to have addressed the question whether, and if so to what extent, "sufficient evidence" had differed from "conclusive evidence", since there had been no basis on which it could have been suggested that in the instant case the evidence of the s.70 certificates had been less than sufficient. In particular, G's argument that there had been a serious procedural irregularity before the commissioners based upon M's alleged lack of authority had been entirely misconceived. The Revenue had made it clear to M that it would be inviting the commissioners to make a formal determination in any event. Moreover it had been clear that M had been fully aware that the hearing before the commissioners was going to take place. (2) The fact that the commissioners had not been asked to deliberate on the case did not mean that its confirmation of the figures put forward by the Revenue had not been a "determination". In the instant case the commissioners had not deliberated on the issues raised by G's appeals because neither the Revenue nor M had asked them to do so. The fact that the decision had not been opposed did not deprive it of the status of a determination. (3) Even if G had not been formally advised of his right to appeal, whilst that might have provided a basis for inviting the commissioners to exercise their discretionary power to review the determination on the footing that an administrative error had occurred, it could not have formed the basis of a challenge to the determination in the instant proceedings.