HT & Co (Drinks) Ltd & Anor, R (on the application of) v HM Revenue & Customs

Where a statutory appeal to the First-tier Tribunal provides an adequate route to challenge the reasonableness of HMRC’s decision, the Administrative Court should not grant interim relief merely because judicial review is also pleaded. Intervention is reserved for exceptional cases involving arguable fundamental unlawfulness, such as abuse of power, bad faith or serious procedural impropriety. A trader’s authorisation to deal in duty-suspended goods is a regulatory privilege carrying a high degree of trust. Sustained failure to comply with due-diligence conditions may justify revocation without a further show-cause letter where the trader has already had ample notice and opportunities to respond.

The claimants were warehousekeepers and traders in duty-suspended alcoholic goods. HMRC revoked their registered-owner authorisations and related warehouse approvals after sustained concerns about compliance with due-diligence conditions. The claimants had appealed to the First-tier Tribunal (Tax) and sought urgent interim injunctions staying the revocations, together with permission to bring judicial review proceedings.

They alleged disproportionate decision-making, procedural unfairness, incompatibility with the excise-duty regime and unlawful interference with property rights. The central issue was whether the Administrative Court could grant interim relief where the statutory appeal was already available and whether the pleaded grounds demonstrated the exceptional form of unlawfulness required for such intervention.

1. Application of the statutory scheme. The statutory appeal under section 16 of the Finance Act 1994 enabled the First-tier Tribunal to determine whether HMRC could reasonably have arrived at the revocation decisions and to consider the human-rights complaints. The existence of that specialist remedy meant that challenges based merely on unreasonableness normally had to proceed there. The Administrative Court should not be used to obtain interim relief for a claim falling within the Tribunal’s jurisdiction.
2. Exceptional judicial-review jurisdiction. Following CC&C v HMRC [2014] EWCA Civ 1653, interim relief could be granted only where the claimant showed more than a realistic prospect of success and established arguable unlawfulness on a fundamental basis, such as abuse of power, bad faith, impropriety or exceptional unfairness. A lower threshold for prospective judicial review would risk circumventing the statutory appeal scheme.
3. Application to the facts. The authorisations were privileges under Part VI of the Warehousekeepers and Owners of Warehoused Goods Regulations 1999. HMRC was entitled to require robust due diligence and to revoke authorisations for reasonable cause. The claimants had received conditions, meetings, warning letters and a specific warning that non-compliance could lead to revocation. Their sustained resistance to the conditions did not establish fundamental disproportionality or procedural unfairness, and a further show-cause letter was unnecessary.
4. The court rejected the challenge that the 1999 Regulations were ultra vires the Council Directive 2008/118/EC concerning the General Arrangements for Excise Duty. It also rejected the property-rights argument and found no sufficient basis for intervention under the Convention or the Human Rights Act 1998.
5. The interim injunction was dismissed. Permission to apply for judicial review was refused because the claim had no reasonable prospect of success on the principal grounds and the subsidiary grounds were no stronger.