Murat, R (on the application of) v Inland Revenue

The claimant appealed under section 56(6) of the Taxes Management Act 1970 against a Special Commissioners determination dismissing appeals against penalties imposed under section 97 for failure to comply with a notice served under section 19A TMA. The court held that a prior determination by a Special Commissioner on the validity and content of the section 19A notice (Dr Brices decision) was final under section 19A(11) and could not be re-opened in penalty proceedings. The judge interpreted section 19A(10) as referring to the date the determination was made (as treated under Regulation 18(9) of the Special Commissioners (Jurisdiction and Procedure) Regulations 1994) and therefore the 30 day period ran from the date of the determination, making the penalty notices lawful.

Subsidiary findings included: (i) there was no compulsion to produce false information or to self-incriminate under Article 6 ECHR because the notice required production of a balance sheet which could state lack of figures or be completed to the best of the taxpayer's judgment; (ii) Article 3 and Article 4 ECHR arguments (degrading treatment or forced labour) were rejected as inapposite; and (iii) no persuasive discrimination argument under Article 14 was made out. Costs of the hearing were assessed at 3,000 and awarded to the Revenue.

This is a first instance judicial review/appeal in law by a litigant in person against the High Court challenging a Special Commissioners determination dated 29 December 2003 which dismissed the claimants appeals against penalty notices imposed for non-compliance with a notice under section 19A of the Taxes Management Act 1970. The claimant is a chartered accountant who had previously appealed the original section 19A notice to Special Commissioner Dr Brice (decision identified as SpC00258, heard 5 May 2000) and lost.

The relief sought was to overturn the Special Commissioners dismissal of the appeals against penalties under section 97 (and section 97AA) TMA arising from the claimants failure to comply with the section 19A notice that required production of, among other documents, a profit and loss account and a balance sheet for specific accounting periods.

The court framed the issues as: (i) whether the claimant could re-open objection to the content of the original section 19A notice in these penalty proceedings given the prior determination under section 19A(6) and finality under section 19A(11); (ii) whether the requirement to produce a balance sheet forced the claimant to incriminate himself or to make false statements (Perjury Act 1911 s.5 and Article 6 ECHR); (iii) whether the date specified in the penalty notice was incorrect and unlawful, raising issues of interpretation of section 19A(10), section 7 of the Interpretation Act 1978 and Regulation 18(8)-(9) of the Special Commissioners (Jurisdiction and Procedure) Regulations 1994; and (iv) whether Convention rights (Articles 3, 4, 6 and 14) were engaged by the requirement.

The courts reasoning was: (a) under section 19A(11) the Special Commissioners prior determination was final and therefore the claimant could not challenge the content of the original notice in these proceedings; (b) section 19A(10) must be read as providing a self-contained code that substitutes a 30 day period beginning with the determination of the appeal (the date the determination is treated as made under Regulation 18(9)), and Regulation 18(9) treated the determination as made on the date it was sent (8 June 2000), so the 30 days ran to 8 July 2000 and the penalty notices that referred to that date were correct; (c) there was no obligation to provide false information or to self-incriminate because the balance sheet could indicate lack of figures or be completed honestly to the best of the taxpayers judgment; and (d) Convention arguments under Articles 3, 4 and 14 were without merit in this context. The appeal was dismissed and costs were awarded to the Revenue (3,000). The judgment noted the long history of the dispute and emphasised the finality of the earlier Special Commissioner determination.

The appeal is dismissed. The court held that the Special Commissioners earlier determination on the section 19A notice was final under section 19A(11) and could not be re-opened in penalty proceedings; section 19A(10) applies from the date the determination is made (as treated under Regulation 18(9)), so the penalty notices correctly specified the date; there was no breach of Article 6 or other Convention rights and no obligation to produce false material. Costs of 3,000 awarded to the Revenue.

The claimant previously appealed the original section 19A notice to Special Commissioner Dr Brice (decision referenced as SpC00258, heard on 5 May 2000) and lost. The penalties were imposed thereafter and appeals against the penalty notices were dismissed by Special Commissioner Wallace (determination dated 29 December 2003). The present appeal to the High Court was under section 56(6) TMA and is [2004] EWHC 3123 (Admin).