Ahmad, R (On the Application Of) v Revenue And Customs

A statutory appeal scheme will ordinarily be the proper route for challenging an HMRC decision covered by that scheme. The First-tier Tribunal may consider proportionality and lawfulness, even where its statutory remedy is principally a direction that the decision cease to have effect. Judicial review and interim relief may nevertheless be available where the challenge alleges a fundamental public-law defect, such as abuse of power, bad faith or impropriety going beyond irrationality or procedural unfairness. Revocation of a non-transferable excise approval is control of property under Article 1 of Protocol 1, and taxation measures attract a wide margin of appreciation.

The claimant operated a wholesale business in duty-suspended alcohol and held approval under the Warehousekeepers and Owners of Warehoused Goods Regulations 1999. HMRC revoked the approval because it considered that deficiencies in supplier due diligence and trading records exposed the Revenue to risk. The claimant had appealed to the First-tier Tribunal Tax Chamber and sought permission for judicial review and interim relief suspending the revocation.

The central issue was whether the existence of the statutory appeal route excluded judicial review where the claimant alleged unlawful interference with goodwill and rights under Article 1 of Protocol 1 to the ECHR.

1. Applications refused. The claimant was refused permission to apply for judicial review and interim relief. The underlying factual dispute was for the First-tier Tribunal Tax Chamber, to which Parliament had assigned review of HMRC’s decision.
2. The statutory scheme was a self-contained route for challenging relevant HMRC excise-management decisions. Following and explaining CC&C Limited v HMRC [2015] 1 WLR 4043, judicial review should not be used where the complaint is only that HMRC could not reasonably have reached its decision.
3. The exception identified in CC&C Limited v HMRC concerns an arguable fundamental public-law defect, including abuse of power, bad faith or impropriety. It requires something more than irrationality or procedural unfairness. The claimant’s case did not fall within that exception.
4. The First-tier Tribunal could consider proportionality. A decision which is unreasonable cannot be proportionate, and a decision which is disproportionate in a case engaging Article 1 rights cannot be reasonable. The statutory remedy was sufficient to vindicate those rights unless the scheme was devoid of reasonable foundation.
5. Revocation of a non-transferable state licence or approval interfering with economic interests constituted control of property under the third sentence of Article 1 of Protocol 1, rather than deprivation under the second sentence. Taxation measures attracted a wide margin of appreciation, and the statutory scheme was not devoid of reasonable foundation.
6. There was an order for detailed assessment of the defendant’s costs, payable by the claimant if not agreed. Permission to appeal was granted because the issue was important and there was a compelling reason for authoritative consideration by the Court of Appeal.

The judgment states that the claimant had appealed to the First-tier Tribunal Tax Chamber. No decision of that Tribunal is stated. The High Court refused permission for judicial review and interim relief, but granted permission to appeal to the Court of Appeal on the ground that there was a compelling reason.