Failure to pay duty – Penalty – Dishonest evasion of duty

R (on the application of First Stop Wholesale Ltd) v Revenue and Customs Commissioners: Queen's Bench Division, Administrative Court (London) (Mr Justice Singh (judgment delivered extempore)): 5 October 2012

In June 2011, quantities of alcohol were detained and removed by the defendant Revenue and Customs Commissioners (the Revenue) from the claimant's warehouse and six retail premises.

Small quantities of spirits were also seized as liable to forfeiture. Also, a lorry operated by the claimant in the course of its business containing a full load of alcoholic goods was seized as being liable to forfeiture. On 28 July 2011, the first in a series of Seizure Notices (the notices) were issued in respect of the detained stock. Within the notices the stated reasons for seizure was as follows in each case: 'pursuant to section 139(6) of the Customs and Excise Management Act 1979 and paragraph 1 of the schedule 3 thereto the [revenue] give you notice that... certain goods have been seized as liable to forfeiture under sections 49 and 100(2)(c) and (e) of the Customs and Excise Management Act 1979 and section 49(3) of the Alcoholic Liquor Duties Act 1979 in that no evidence of UK duty payment has been provided'. The claimant sought judicial review of the notices.

The claimant submitted, relying on the case of Eastenders Cash & Carry plc v HMRC [2012] All ER (D) 126 (Aug), that the notice of seizure was defective in law as the ground given by the revenue was not in law a relevant one under the governing legislation, namely schedule 3 paragraph 1(1) of the 1979 act. Under the governing legislation there were a multitude of factual situation giving rise to goods being liable to forfeiture none of which were mentioned in the notices. The defendant submitted, inter alia, that the issue was to be approached with realism and it had been clear, given the factual context, why the goods were being seized (non-payment of duty). The application would be dismissed.

Paragraph 1 of schedule 1 of the 1979 act was a straightforward provision and was not to be construed as requiring a notice to be set out to a prescriptive formula or in a manner of a pleading. The case had to be looked at in substance and not technically. It was clear to the recipient of the notices that the goods had been seized because of the alleged absence of duty payment. The references to specific statutory powers providing for forfeiture for non-payment of duty when taken with the phrase 'no evidence of UK duty has been provided' was a perfectly acceptable statement of grounds for seizure.

Eastenders Cash & Carry plc v Revenue and Customs Comrs [2012] All ER (D) 126 (Aug) applied.

Marc Glover (instructed by Rainer Hughes) for the claimant; James Puzey (instructed by the Revenue and Customs Commissioners) for the Revenue.