Eastenders Cash and Carry Plc & Anor v Revenue and Customs

Section 139(1) of the Customs and Excise Management Act 1979 authorises detention where there are reasonable grounds for suspecting that duty may not have been paid. The power permits HMRC to investigate before deciding whether to seize goods or release them. Detention must be proportionate to the legitimate objective of enforcing taxation. Where more than a routine check is required, there must be a real possibility that duty has not been paid, and inquiries must be conducted as expeditiously as reasonably possible. The statutory ten-day guidance is not an inflexible limit. A longer period may be lawful in a complex investigation, although detention cannot continue indefinitely while further inquiries remain conceivable.

The claimants sought judicial review of HMRC’s detention of alcoholic goods under section 139(1) of the Customs and Excise Management Act 1979. Some goods had been seized and were subject to the condemnation procedure under Schedule 3, but the claims concerned goods later released after HMRC’s investigations remained inconclusive.

The claimants argued that detention was lawful only where the goods were in fact liable to forfeiture, and alternatively that detention materially exceeding HMRC’s ten-working-day guidance was necessarily unlawful. The central issues were the statutory foundation of the detention power and the permissible duration of detention.

1. Claims dismissed. The claimants failed on both grounds of challenge.
2. Section 139(1) confers distinct powers to seize and detain goods. Seizure initiates the Schedule 3 procedure, under which the question whether goods are forfeited can ultimately be determined by a court. Detention serves a different purpose: it enables HMRC to investigate uncertainty about whether duty has been paid before deciding whether to seize or release the goods.
3. The statutory scheme, including section 139(5), the absence of a Schedule 3 procedure for detention, and the historical distinction between detention and seizure, supported that construction. The reasoning in Gora v Customs and Excise Commissioners was persuasive, although the observations of Pill LJ concerning investigative detention were not part of that case’s ratio.
4. Read compatibly with Convention property rights under section 3(1) of the Human Rights Act 1998, detention must be proportionate to the legitimate objective of effective and fair tax enforcement. Where more than a routine check is involved, HMRC must have reasonable grounds to believe that there is a real possibility that duty has not been paid.
5. The period of detention must be as short as reasonably possible to allow proper investigation and an informed decision to seize or release. The ten-working-day period in HMRC’s guidance is a norm, not a rigid statutory limit. Complex investigations may justify longer detention. However, detention cannot continue indefinitely: over time, the owner’s interest in release or seizure will eventually outweigh HMRC’s interest in further investigation.
6. The claimants did not pursue a detailed challenge to the reasonableness of the investigative steps taken. In the circumstances, the detentions were not shown to be unlawful.