Customs and Excise v Weller

A VAT and Duties Tribunal may consider the validity of a forfeiture when reviewing a refusal to restore seized goods, even where the goods were deemed condemned because no condemnation proceedings were requested. The tribunal must consider whether the importer had a realistic opportunity to invoke the condemnation procedure and, if so, whether the particular facts nevertheless justify reopening the issue. Proportionality is relevant, together with considerations akin to abuse of process. An appellate court should interfere with an interlocutory discretionary direction only where it was unlawful, unsupported by material, or one which no properly advised tribunal could reasonably have made.

The Commissioners appealed against an interlocutory direction of the VAT and Duties Tribunal concerning goods seized from David Weller at Dover. The Tribunal directed that the appeal could proceed on the basis that it had jurisdiction to consider whether the goods were for personal rather than commercial use, although no condemnation proceedings had been commenced and the goods had been deemed condemned.

The Commissioners contended that the statutory forfeiture scheme prevented the Tribunal from reopening the validity of the seizure. The central issue was whether the Tribunal had jurisdiction, and whether its exercise of that jurisdiction could properly be sustained on the material before it.

1. Appeal dismissed. The Tribunal had jurisdiction, on an appeal from a decision refusing restoration, to admit an argument which amounted to a challenge to the validity of the forfeiture.

2. The statutory scheme establishes two routes. The lawfulness of forfeiture is ordinarily challenged through condemnation proceedings under Schedule 3 to the Customs and Excise Management Act 1979. Restoration is separately governed by section 152(b), with review and appeal under sections 14 to 16 of the Finance Act 1994.

3. Following the approach in Commissioners of Revenue and Customs v Smith, the relevant inquiry has two stages:

   1. whether the importer had a realistic opportunity to invoke the condemnation procedure; and
   2. whether, despite that opportunity, the facts disclose reasons why the Commissioners or Tribunal should permit the validity of the seizure to be reopened.

   The first question will ordinarily be answered affirmatively. The second requires consideration of proportionality and matters akin to abuse of process.

4. The fact that an importer failed to request condemnation proceedings is not automatically decisive. Relevant circumstances may include confusion about the procedure, the modest value of the goods, the likely costs of condemnation proceedings, and the relationship between the quantities seized and the Commissioners’ guideline amounts.

5. The Tribunal’s order was interlocutory and discretionary. It could be disturbed only if unlawful, unsupported by material on which a properly advised tribunal could act, or unreasonable in the stringent sense that no reasonable tribunal could have made it. The material was sufficient to support the Tribunal’s direction.

6. The Tribunal hearing the substantive appeal would not be bound by the interlocutory conclusions. It could reconsider all the facts and might ultimately refuse permission to challenge the validity of the forfeiture.

High Court (Chancery Division): dismissed the Commissioners’ appeal from the interlocutory order of the VAT and Duties Tribunal dated 15 June 2005.