Customs & Excise v VAT & Duties Tribunal & Ors

The forfeiture route and the restoration route are distinct. A prior condemnation decision generally prevents a tribunal in restoration proceedings from reopening facts expressly or necessarily decided by the court. Where the prior order is materially uncertain, however, the tribunal may receive evidence to avoid proceeding on an uninformed basis.

In a restoration appeal concerning an ancillary matter, the tribunal’s powers are confined by section 16(4) of the Finance Act 1994. It must ask whether the reviewing officer could reasonably have reached the decision. A deemed forfeiture may be reopened where doing so is not an abuse of process. Hardship may be a relevant factor in deciding whether seized property should be restored.

Three appeals were brought by the Commissioners of Customs & Excise against decisions of the VAT and Duties Tribunal. In the Eatock and Speakman appeals, the Tribunal directed fresh reviews of decisions refusing to restore seized cigarettes and tobacco. Earlier condemnation orders had been made by magistrates, followed by purported rehearings.

In the Turner appeal, there had been no condemnation hearing and the goods and vehicle were deemed forfeited after no timely notice of claim. The Tribunal held that the refusal to restore the vehicle was unreasonable. The central issues were the effect of the magistrates’ orders, the scope of the Tribunal’s restoration jurisdiction, and the statutory limits on appeals concerning ancillary matters.

1. Eatock and Speakman. The first condemnation orders remained valid and could be relied upon. The purported rehearings were assumed to have been without jurisdiction, but they did not invalidate the first orders. It was not an abuse of process for the Commissioners to rely on those orders.
2. The effect of Gora v Customs & Excise Commissioners [2003] 3 WLR 160 (CA), as explained in Gascoyne v Customs & Excise Commissioners [2005] 2 WLR 222 (CA), was that facts expressly or necessarily decided in condemnation proceedings could not ordinarily be reopened in restoration proceedings. The Tribunal was therefore wrong to proceed on the basis that it should take no account of the first condemnation proceedings.
3. Nevertheless, the wording of the orders did not clearly establish that the magistrates had found, on the balance of probabilities, that the goods had been held for a commercial purpose or that they were not for the importers’ own use. In that uncertainty, it was not wrong for the Tribunal to hear evidence. Its factual findings did not contradict facts necessarily implicit in the orders.
4. The Tribunal had failed to address the confined jurisdiction imposed by section 16(4) of the Finance Act 1994. That was an error of law. However, remitting the Eatock and Speakman appeals would have been disproportionate, and their appeals were dismissed. The Tribunal’s existing directions for further reviews stood.
5. Turner. Under Gascoyne, issues arising from deemed forfeiture could be reopened, subject to considerations similar to abuse of process. It was open to the Tribunal to consider the alleged manner of seizure in the context of the unfettered restoration discretion under section 152 of the Customs and Excise Management Act 1979.
6. The Tribunal nevertheless erred in law by failing to apply section 16(4), and there was a risk of procedural unfairness because the Customs had not been alerted that the credibility of the seizing officer’s notes was in issue. The Tribunal’s decision was set aside. The matter was remitted for a fresh hearing, including consideration of hardship and, if appropriate, the attendance of the seizing officer.

• VAT and Duties Tribunal: directed fresh reviews in the Eatock and Speakman cases and held the refusal to restore Turner’s vehicle unreasonable.
• High Court (Chancery Division): dismissed the Eatock and Speakman appeals, but allowed the Turner appeal and remitted the matter for a fresh hearing.