ABC Ltd & Anor v HM Revenue and Customs

An ancillary administrative power cannot be used to contradict a statutory approval scheme by treating a refused applicant as approved.

However, approval legislation may permit HMRC to grant time-limited or conditional approval where the trader is fit and proper for that limited purpose. The High Court retains jurisdiction under section 37 of the Senior Courts Act 1981 to grant interim relief, but a realistic prospect of a successful appeal is insufficient. Relief may be available where, with a high degree of probability, its absence would make the statutory appeal illusory and violate article 6.

HMRC refused ABC Ltd, X Ltd and Y Ltd approval to wholesale duty-paid alcohol under the statutory scheme. Each company appealed or intended to appeal to the First-tier Tribunal and sought temporary approval pending that appeal.

The High Court refused the requested relief. It held that HMRC lacked power to grant temporary approval and considered that injunctive relief was unavailable or inappropriate under CC & C v HMRC. The Court of Appeal considered HMRC’s statutory powers and the High Court’s jurisdiction to preserve an effective appeal.

1. Appeals partly allowed. HMRC’s decisions that they had no power to grant temporary approval were quashed and remitted for reconsideration. The appeals against refusal of injunctions were dismissed, although existing interim relief was maintained pending reconsideration.
2. Section 9(1) of the Commissioners of Revenue and Customs Act 2005 did not authorise HMRC to approve traders whom it had decided were not fit and proper under the statutory scheme. The incidental-power provision had to be construed in the context of the scheme as a whole. Temporary approval under section 9 would contradict the public register and the statutory prohibition on unapproved trading.
3. Section 88C of the Alcoholic Liquor Duties Act 1979 was different. Its provisions on fitness, periods and conditions operated together. HMRC could conclude that a trader was fit and proper for a limited period or subject to conditions, even though it was not fit and proper for unconditional approval. Hardship and the effect on appeal rights were not themselves the statutory test.
4. The High Court’s jurisdiction under section 37 of the Senior Courts Act 1981 was not ousted. CC & C v HMRC [2014] EWCA Civ 1653 was not distinguishable or decided per incuriam. Its approach applied equally to this scheme: a pending appeal with a realistic prospect of success was insufficient, while a challenge involving a more fundamental unlawfulness could justify relief.
5. A statutory appeal which would become academic before it was heard could engage article 6. The High Court could grant a free-standing injunction where the claimant showed, to a high degree of probability, that absence of relief would make the appeal ineffective. The strength of the appeal, HMRC’s concerns, the public interest, compelling financial evidence and attempts to obtain expedition were relevant. Such relief would be rare.

1. Court of Appeal (Civil Division): allowed the challenges to HMRC’s refusal to consider temporary approval, quashed those decisions and remitted the issue; dismissed the appeals concerning injunctions, while maintaining interim relief pending reconsideration. [2017] EWCA Civ 956
2. High Court, Queen’s Bench Division, Administrative Court: refused permission for judicial review in the X Ltd and Y Ltd proceedings and refused or declined interim relief; in the ABC Ltd proceedings, permission and interim injunctive relief were refused.