Revenue

Taxpayer applying to commissioner to postpone tax pending appeal - commissioner overlooking argument as to whether reasonable grounds for believing taxpayer overcharged - judge on appeal not to evaluate validity of argument itself but to remit to another commissioner

Pumahaven Ltd v Williams (HM Inspector of Taxes): CA (Lords Justice Peter Gibson, Tuckey and Keene): 8 May 2003

The taxpayer had appealed to a special commissioner for permission to postpone payment of corporation tax pending determination of its appeal on that assessment.

The commissioner refused the application.

The taxpayer appealed to a judge who set aside the decision and, under section 56A(4) of the Taxes Management Act 1970 (as substituted by regulation 2(1) of the General and Special Commissioners (Amendment of Enactments) Regulations 1994 (SI 1994/1813)), remitted the application to a different commissioner for reconsideration because the commissioner had failed to deal with a substantial argument presented to her.

The Inland Revenue appealed against the judge's decision to remit, arguing that he had jurisdiction to determine whether the taxpayer's argument itself was correct.

Launcelot Henderson QC and Hugh McKay (instructed by the solicitor, Inland Revenue) for the Inland Revenue; Kevin Prosser QC and Elizabeth Wilson (instructed by Downs, Dorking) for the taxpayer.

Held, dismissing the appeal, that where a taxpayer had applied to a special commissioner to determine the amount of tax he could postpone paying pending determination of an appeal against the amount charged, and the commissioner, in evaluating whether there were reasonable grounds for concluding that the taxpayer was overcharged, had overlooked an argument brought by the taxpayer, a judge on appeal had no jurisdiction to hear the argument and evaluate its validity; that the error was a procedural error which should be remedied by the judge remitting the argument to be dealt with by another commissioner; that, accordingly, the appeal would be dismissed.