R v Inland Revenue Comrs, Ex p Rossminster Ltd (Inland Revenue Comrs v Kossminster Ltd)

A search warrant issued under section 20C of the Taxes Management Act 1970 need not identify the suspected offender, specify particular tax offences, or give their dates. It is sufficient if the statutory conditions for issue have been met and the warrant authorises entry and search of identified premises.

The separate statutory power to seize arises under section 20C(3). It requires an objectively reasonable basis for believing that material may be evidence of a tax-fraud offence. On judicial review, however, the applicant must displace the presumption that the officer acted lawfully. A final declaration is inappropriate where the lawfulness of seizure depends on material facts disputed on affidavit and requiring trial.

Officers of the Inland Revenue obtained four warrants under section 20C of the Taxes Management Act 1970 and searched the respondents’ homes and business premises during an investigation into suspected tax fraud. They seized extensive documents and other material.

The Divisional Court dismissed the respondents’ applications for judicial review. The Court of Appeal allowed their appeal, quashed the warrants, and made a declaration concerning the seizure and removal of the material. The Revenue brought consolidated appeals.

The central issues were whether the warrants needed to particularise the alleged offences and whether, on disputed affidavit evidence and without disclosure of investigative grounds, a final declaration could properly be made that the seizures were unlawful.

1. The appeals were allowed by a four-to-one majority. Lords Wilberforce, Diplock and Scarman, with Viscount Dilhorne, concluded that the warrants were valid. Lord Salmon dissented on the validity of the warrants. The orders of the Court of Appeal were set aside.

2. Section 20C(1) of the Taxes Management Act 1970 requires the judicial authority personally to be satisfied on sworn information of the statutory conditions. In the absence of evidence to the contrary, the court should presume that the Circuit judge performed that duty. The statute did not require the warrants to name a suspect, state dates, or particularise the individual offences within the genus of tax fraud. The warrants sufficiently identified the statutory power, the officers, and the premises to be searched.

3. The warrant authorises entry and search only. The power to seize and remove material comes directly from section 20C(3). It extends to things which the officer has objectively reasonable cause to believe may be required as evidence in proceedings for any offence within the statutory description of tax fraud, not merely a particular offence initially suspected.

4. Per Lord Diplock, judicial review is not an appeal from the officer’s decision. The applicant bears the burden of displacing the presumption of lawful action by facts inconsistent with the required belief or with reasonable grounds for it. Public-interest immunity could justify temporary non-disclosure of investigative grounds. The evidence did not establish that the officers had acted unlawfully.

5. A final declaration should not have been granted on sharply conflicting affidavit evidence. The issue required a trial, ordinarily deferred until criminal proceedings had concluded, been abandoned, or a reasonable time to decide whether to prosecute had elapsed. The respondents could pursue their ordinary action for wrongful seizure. Lord Salmon agreed that the contested evidence could not support the declaration, but considered the warrants invalid because their recital showed that the judge had acted on the officer’s assertion rather than his own satisfaction.

• House of Lords: In the consolidated appeals, allowed the Revenue’s appeals and set aside the Court of Appeal’s orders: [1980] 2 WLR 1.

• Court of Appeal: Allowed the respondents’ appeal from the Divisional Court, quashed the warrants, and granted a declaration concerning the seized material.

• Divisional Court: Dismissed the respondents’ applications for judicial review.