19874

VAT – application to strike out appeal – No decision reached against which an appeal could be lodged – Rule 18(1)(a) Value Added Tax Tribunals Rules 1986 – application allowed and appeal struck out

LONDON TRIBUNAL CENTRE

	ATEC ASSOCIATES LIMITED	
		Appellant

	- and -

	THE COMMISSIONERS FOR 
	HER MAJESTY’S REVENUE AND CUSTOMS	
			Respondents

				Tribunal:	Malcolm Gammie CBE QC (Chairman)

Sitting in private in London on 11 August 2006

The Appellant was not present and was not represented

Mrs Pauline Crinnion, advocate, for the Commissioners

© CROWN COPYRIGHT 2006

DECISION

Introduction

1. This is a decision on an application by The Commissioners for Her Majesty’s Revenue and Customs (“the Respondents”) dated 11 August 2006 that this appeal be struck out under Rule 18(1)(a) of the Value Added Tax Tribunals Rules 1986 (“the 1986 Rules”) on the grounds that the Respondents have reached no decision against which an appeal lies.  The Appellant objected to the application by letter of 15 September 2006 from its representative Mr Paul Ross of P H Ross & Co.

2. At the hearing of the application the Respondents were represented by Mrs Pauline Crinnion.  The Appellant did not attend and was not represented.  The Appellant had given no notice of or reason for non-attendance and had not requested that the hearing be postponed to another day.  I therefore decided under Rule 26(2) of the 1986 Rules to proceed with the application in the Appellant’s absence and having read the file and heard the Respondents’ submissions, directed that the Appellant’s appeal be struck out under the said Rule 18(1)(a).  

3. The Tribunal’s direction was released on 3 October 2006 and the Appellant, by letter of 5 October 2006 from the said Mr Paul Ross, has applied to set aside the direction under Rule 26(3) of the 1986 Rules and has requested under Rule 30(2) that my decision be recorded in a written document containing my findings of fact and the reasons for my decision.

The facts

4. No witnesses were called for either party.  The Tribunal had before it copies of the correspondence between the parties.  The correspondence revealed the following background to the appeal.

5. The Appellant has claimed repayment of £2,474,089 input tax for the period 04/06.  In its notice of appeal dated 5 July 2006 the Appellant stated that the Respondents had refused to authorise the repayment of this tax on the basis that verification of the Appellant’s VAT return for the period 04/06 was on-going.  According to the appeal notice the Appellant had provided the Respondents with all the information that they had requested and could see no reason why the repayment could not be made.  

6. The Appellant’s return was received by the Respondents on 8 May 2006.  By a letter from Mrs S V Hurst, an officer of the Respondents, the Respondents indicated that a period of time would be required to enable the Respondents to undertake verification of the transactions to which the claim for repayment of input tax related.  Mrs Hurst’s letter confirms that the enquiries have commenced regarding the supply and movement of the goods and refers in particular to the Respondents’ obligation to guard against carousel fraud.  She confirmed that the Respondents normally undertake to make repayment within 30 days but that the time taken to conduct reasonable enquiries does not count towards this 30 day period.

7. Since the letter of 8 May 2006 there have been meetings between the Appellant and the Respondent’s officers who are dealing with the verification process.  There has also been extensive correspondence between the parties regarding the information requested and the verification process, including letters of complaint by the Appellant at the conduct of certain of the officers involved and at the failure to conclude the verification process.  From the Appellant’s perspective it has met the Respondents’ requests for further information and the Respondents has no further cause to delay repayment of the tax.  Much of this correspondence post-dates the Appellant’s appeal notice.

The parties’ submissions

8. On 11 August 2008 the Respondents applied to have the appeal struck out on the grounds that their enquiries were on-going, were being actively pursued and the Appellant was being kept informed of their progress.  Mrs Crinnion confirmed that this was the case and that the Appellant would be informed when the Respondents had reached a decision on the matter.  

9. In Mr Ross’ letter of 15 September 2006, the Appellant’s objected to the application on the grounds that—

(1)	the Respondents had made a decision not to make repayment of the tax, 
(2)	all the Respondents queries except two had previously been dealt with,
(3)	the Appellant had furnished the Respondents with the outstanding information on 15 September 2006, and 
(4)	there were therefore no grounds for continuing to withhold payment 

and the Appellant therefore asked the Tribunal to direct that the Respondents should repay the tax forthwith.

Conclusions

10. In arriving at my decision I have referred in particular to the decisions in Tricell UK Limited v Customs and Excise Commissioners (2003) VAT Decision No. 18127, Evolink Limited v Customs and Excise Commissioners (2003) VAT Decision No. 18207 and F Options Ltd v Customs and Excise Commissioners (2004) VAT Decision No. 18521.  

11. In the present case none of the correspondence prior to the lodging of the appeal notice on 5 July 2006 can be regarded as a decision not to repay the tax.  Of course, the tax had not been repaid but the reason for this is apparent from the Respondents’ letters, namely they wished to verify the facts in order to determine whether the Appellant was entitled to be repaid the sum that it had claimed.  I agree with the Tribunal in F Options Ltd that it can only be correct to consider the correspondence up to the time when the appeal notice was lodged.  At that point it is manifestly apparent that there had been no decision against which an appeal lay.  Even if I take into account later correspondence I can see no basis for reaching a different conclusion.  In particular, Mr Ross’ letter of 15 September 2006 indicates that the Appellant had not prior to that time completed its provision of the information that had been requested as part of the verification exercise.  

12. Accordingly I allow this application and direct that the appeal be struck out.  It will be open to the Appellant to appeal in due course if the Respondents do conclude in the light of their enquiries that the Appellant’s claim for repayment of the input tax ought not to be allowed.

MALCOLM GAMMIE QC
CHAIRMAN
RELEASED: 10 November 2006

LON/06/0810
££Atec Associates Ltd v Revenue & Customs [2006] UKVAT V19874 (10 November 2006)