18646
03 214 RASHID PATEL AND AF FASHIONS LTD Mr C P Bishopp Mr J T B Strangward Birmingham 29 March The Appellant did not appear and was not represented Mr J Puzey, of counsel, instructed by the Solicitor's Office of HM Customs and Excise, for the Respondents COLIN BISHOPP
	VALUE ADDED TAX  — input tax credit — claim supported by witness that no evidence that supply actually made — whether Commissioners’ correct to reject claim — yes — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

 
 	
	RASHID PATEL trading as AF Fashions	Appellants
	AF FASHIONS LTD

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	 Mr C P Bishopp (Chairman)
						 Mr J T B Strangward (Member)	

Sitting in public in Birmingham on 29 March 2004

The Appellants did not appear and were not represented

Mr J Puzey, of counsel, instructed by the Solicitor's Office of HM Customs and Excise, for the Respondents

	© CROWN COPYRIGHT 2004

DECISION

1.	These are appeals by Rashid Patel, who traded as AF Fashions, and by AF Fashions Ltd, against assessments of £9,292 plus interest and £16,541 plus interest respectively.  AF Fashions Ltd is the successor to Mr Patel who incorporated the business which he formerly carried on as a sole proprietor, namely that of garment manufacture.  The circumstances of the two appeals are identical and it was directed some time ago that they should be heard together.
2.	In each case the assessment sets out to recover input tax for which credit had been claimed in the appellants’ returns but which, on examination, the Commissioners decided should not have been credited.  Their reasoning was that the claims were based upon invoices purportedly issued by registered traders but which did not relate to genuine supplies.
3.	Neither of the appellants appeared or was represented at the hearing.  Both had previously been represented by professional advisers, who had evidently ceased to act for them.  It seemed to us that proper notice of the hearing had been given and, since we had no explanation of the absence of Mr Patel or of any representative of him or the company, we considered it appropriate for us to proceed to hear the appeal.
4.	It transpired that the invoices in question were issued, or purportedly issued, by two traders – RS Fashions and GM Fashions, both using addresses in Coventry.  The appellants trade, or traded, from premises in Leicester.  That parts of the appellants’ claims for input tax credit were based upon invoices issued or purportedly issued by these two traders (which on the dates which the invoices bear were registered) came to light in February 2002 when a Customs officer, Fiona Blackshaw, made a control visit.  The Commissioners already had suspicions about the two traders and Ms Blackshaw decided to make some further enquiries.  She discovered that the address used by RS Fashions on its invoices did not exist.  The address used on GM Fashions’ invoices did exist, but was a residential property whose occupiers denied any knowledge of GM Fashions.  A different correspondence address had been notified to the Commissioners, that of a firm of accountants.  Ms Blackshaw’s enquiries there yielded the information that the accountants too had not heard of GM Fashions.  There were other oddities about the invoices, which were lacking any real detail of the goods purportedly supplied.  The printed matter on the invoices used by the two traders was remarkably similar and, as we could see from the copies produced to us, the handwriting on all the invoices appeared to be the same.
5.	After Ms Blackshaw had communicated her decision to disallow the input tax for which credit had been claimed, there was correspondence and other communication between her and the appellants and their advisers.  No further information has been provided to establish that the supplies were genuinely made or had been paid for, and Ms Blackshaw remained of the view that the invoices had been used to support a false claim for input tax credit.
6.	In our view she was quite right in that conclusion.  Input tax credit is allowed only in respect of the tax incurred on supplies made by a taxable person; see, for example, Joytot Limited v Customs and Excise Commissioners (1998, Decision 15502).  It is for the trader seeking to claim a deduction for input tax to establish his entitlement: see Rompelman v Minister van Financiën (Case 268/83) [1985] ECR 655.  We agree with the Commissioners that the appellants have failed to do so.
7.	The appeals are, therefore, dismissed.  Mr Puzey, who appeared for the Commissioners, did not seek a direction in respect of costs.

COLIN BISHOPP
CHAIRMAN
Release Date : 09/06/2004
MAN/03/214 & MAN/03/230