Application for Dismissal for no jurisdiction.  Section 83 (p)(i).  Supplementary Assessment under Section 77(6).  No returns lodged by Appellant.  That this Tribunal has no jurisdiction be held over pending lodgement of returns by Appellant.  Time given to 30th September 2004.  Coleman v C&E 25th May 1999 Decision 16178 followed.

EDINBURGH TRIBUNAL CENTRE

	PETER FAIRBAIRN	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	       Respondents

			Tribunal:	 (Chairman)    Mrs G Pritchard, BL., MBA., WS

Sitting in Edinburgh on Wednesday 18th February 2004

for the Appellants	Mr William Ferguson, Scott Moncrieff CA, Edinburgh

for the Respondents	Mr A McCue

© CROWN COPYRIGHT 2004.

DECISION

Introduction
This is an application by the Commissioners for dismissal of an appeal by the Appellant against the supplementary assessment to Value Added Tax under the Value Added Tax Act 1994 (VATA 1994) Section 77(6).

The Appellant objected to the application using the grounds established in the case of P W Coleman and Others v C&E 1999 Vat & Duties Tribunal Decisions 16178 London (hereinafter referred to as “Coleman”).

The Hearing
The Appellant was represented by Mr William Ferguson, Tax Consultant.  The Commissioners were represented by Mr A McCue.

The application was on submissions only, though Mr McCue was required to supply evidence after a short adjournment, from the Commissioners.

Evidence elicited during Tribunal, from Commissioners
The Application is made under Tribunal Rule 6 of the Value Added Tax Tribunals Rules 1986 (S.I. 1986/590) by the Commissioners (Respondents in the main appeal).  Mr Peter Fairbairn, the Appellant, had made no Value Added Tax returns since he went into business in 2001.  He was issued with central assessments for the period under dispute namely 06/01-12/02.  These have so far as could be established on enquiry today, been paid.

After a control visit the supplementary assessment which is the subject of the main appeal was raised solely in relation to one aspect of the Appellant’s public house business namely entertainment by dancers.  The Appellant had appealed against the supplementary assessment.  It is a pre-condition in terms of Section 84(2) VATA 1994 that “an appeal should not be entertained unless the Appellant has made all the returns required to be made under paragraph 2(1) of Schedule 11 and has paid the amount shown as payable by him”.  In addition it is a pre-requisite under Section 83 (p)(i) that an appeal against an assessment would lie only where a return has been made.

Agreed Facts
Following the above provision of information regarding payment, the following matters were agreed:
(1)	The Appellant had been centrally assessed throughout the period under dispute.

(2)	A supplementary assessment had been issued for the period 06/01-12/02 particularly in respect of the dancers.

(3)	The supplementary assessment carried default surcharges and possibly penalties though these were not before this Tribunal.

(4)	No returns had been received from the Appellant by the Commissioners.

(5)	The returns are currently being prepared.

(6)	The Appellant had paid the central assessments and had in addition provided security.

The issues for the Tribunal were agreed between both representatives as being identical to the issues set out in Coleman which are laid out below, with the findings of this Tribunal as answers.

(1)	Has the Tribunal jurisdiction to entertain an appeal against the supplementary assessment under Section 77(6) VATA 1994? - the answer to which is that it has.

(2)	Whether the Appellant has enforceable community rights that override the conditions in Section 83(p)(i) and whether that section is disproportionate – the answer to which is that neither of these conditions prevail.  The appeal in this case is therefore against an assessment issued under Section 73 as the Appellant has made no returns.  It is supplementary under Section 77 as he has paid centrally assessed returns.  However the supplementary assessments do not come within Section 83(p)(i) as no returns have been made.

(3)	Whether the appeal is within Section 83(b) VATA – the answer to which is that it is not, but the terms of Section 83(p)(i) apply.

(4)	Whether the Appellant has enforceable community rights that override Section 84(2) VATA 1994 and whether that Section is disproportionate – the answer to which in Coleman was that it was so in relation to any default surcharges and any penalties against which an appeal would be open to the Appellant.  Default surcharges will apply to the supplementary assessment as will penalties, though these are not so far calculated, initiated or appealed against in particular, but were generally appealed against in principle today at the Hearing.  The principle in S4(2) is therefore in this case disproportionate.

The effect of this agreement led Mr McCue for the Commissioners to request that in terms of the Coleman Decision a dismissal of the appeal should be granted on the grounds of no jurisdiction as found in paragraph (2) above as in the Coleman case.

Mr Ferguson advised in terms of the judgment in Coleman it appeared that the appeals have proceeded, certainly insofar as the default surcharges and penalties were concerned.  This Appellant would be subject to default surcharges and penalties and therefore the Appellant should be allowed to continue, in terms of paragraph (4) above as in the Coleman case.

Further Procedure
Following the close of the Hearing I located the Directions which the Chairman of the Coleman Tribunal, Mr Stephen Oliver had issued as noted at the end of that judgment.  These are attached to this judgment for reference.  It appears that the Appellant, Coleman in that case, was afforded the opportunity to purge his failure to make returns before the dismissal decided in Coleman against the Appellant under issue 2 as in paragraph 2 above was to take effect.

In light of that information which I accept was not placed before the Tribunal by the Commissioners who must have been aware of its terms before instructing Mr McCue, I have decided to allow this matter to proceed on similar terms.

I therefore direct as follows:-
(1)	This Tribunal directs that unless the Appellant either submits returns for the periods in dispute namely 06/01-12/02 by 30th September 2004 or makes an application under Direction 2, the appeal against the assessment covering those periods shall stand dismissed without further hearing.

(2)	Both parties are at liberty at any time before 30th September 2004 to apply to extend a time for submitting the returns.

Expenses
Mr Ferguson moved that the Tribunal award the Appellant expenses in the event of success.  I do not regard it as appropriate to make any order with regard to expenses at this time in light of the Appellant’s failure to make returns, and also in light of the suspensive nature of the directions.  The matter of expenses is therefore reserved.

Further Note
I have made no Direction with regard to default surcharges or penalties as these have not so far as I was made aware at the Tribunal as yet been raised or are the subject of a formal appeal.  If however, that is not the case, then I leave it open to both parties to make application to return to the Tribunal for a Direction on this matter.

Mrs G Pritchard, BL., MBA., WS
CHAIRMAN

RELEASE: 15 MARCH 2004

EDN/03/130