DECISION

1. The Appellant is a company registered in Italy. It was the owner of two trailers, one with registered number AC15798 (“the first trailer”) and the other with AC63373 (“the second trailer”). The first trailer was seized by HM Revenue and Customs (“HMRC”) in Dover on 25 May 2008. The second trailer was officially seized by HMRC in Dover on 1 October 2008.

2. The Appellant did not challenge the legality of the seizure before the magistrates. Its failure to do so means that it cannot now challenge the legality of the seizure, but it had the right to apply to HMRC for restoration of the seized vehicles. In the event, it was not until 4 June 2009 that the Appellant applied to HMRC for restoration of the first trailer. This application was made by Mr Giannandrea Comacchio as the Appellant had been declared insolvent by the Court of Treviso in Italy on 14 May 2009 and Mr Comacchio appointed as liquidator.

3. On 25^th June 2009 the Appellant (by its liquidator) made a similar application for restoration of the second trailer.

4. On 24^th July 2009 HMRC wrote two letters to the liquidator. The first letter offered to restore the first trailer on payment of £2,775. The second letter refused to restore the second trailer.

5. The liquidator replied with two undated letters both received by HMRC on 9 September 2009. The first letter enclosed the fee to obtain restoration of the first trailer. Both letters requested a review of HMRC’s decisions in respect of the two trailers.

6. The UK Border Agency replied by letter of 8 October 2009 saying that the letters received on 9 September was received 3 days beyond the 45 day statutory deadline in which to request a review and that as no explanation for the lateness was given which they considered to be a reasonable excuse, they would not agree to carry out a review.

7. The Appellant lodged on 5 November 2009 three Notices of Appeal. The first was against the decision of 24 July 2009 offering restoration of the first trailer for payment of a fee (appeal numbered TC/2009/15637). The second was against the second decision on that date refusing restoration of the second trailer (appeal numbered TC/2009/15640) and the third against the decision of 8 October 2009 refusing to carry out the review of the decisions made on 24^th July (TC/2009/15642).

Absence of Appellant

8. There was no appearance at the hearing by or for the Appellant. The clerk telephoned the liquidator’s office in Italy and was informed that they had received the notifications of the hearing from the Tribunal Service but that they were not sending anyone to the hearing to make representations. I was satisfied, therefore, that the Liquidator had been notified of the hearing and I considered it to be in the interests of justice to proceed with the hearing in the absence of the Appellant. Nevertheless, because of the absence of the Appellant and the technical nature of the relevant statutory provisions I have set out my conclusions in a full reasoned decision rather than merely a summary.

Identity of Respondent

9. Historically HMRC (and its predecessor HM Customs & Excise) have had sole responsibility for all excise duty matters. However, section 7(1) of the Borders, Citizenship and Immigration Act 2009, which received Royal Assent on 21 July 2009, gave the Director of Border Revenue concurrent jurisdiction with HMRC on “customs revenue matters”. Customs revenue matters include the excise duties on alcohol.

10. In practice, although there is a concurrent jurisdiction, the UK Border Agency has taken over customs revenue matters. In particular, the UK Border Agency took over this case after the Act came into force and made the decision not to review (by letter of 8 October 2009) HMRC’s original restoration decisions of 24 July 2009.

11. Section 7(5) of the Act provides:

“So far as is appropriate for the purposes of or in connection with this section, references to the Commissioners for Her Majesty’s Revenue and Customs, or to Her Majesty’s Revenue and Customs, in an enactment, instrument or document to which this section applies are to be construed as including a reference to the Director.”

12. The Appellant’s first two appeals are against decisions taken by HMRC. It is however the Border Agency which is conducting the appeals as Respondent. The proper interpretation of Section 7(5) may be that the decisions taken by HMRC on 24 July should be taken to be decisions by the Border Agency and that the Border Agency is therefore properly the Respondent to the appeals with no further action by the Tribunal being needed. Without deciding whether it is therefore actually necessary, I Direct that under Rule 9 of this Tribunal’s Rules (The Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009/273) the Director of Border Revenue is substituted as Respondent in the first two appeals. The third appeal was always against a decision taken by the Border Agency.

Jurisdiction

13. The three appeals were categorised as standard. The Agency served on 22 January its Statements of Case in the three appeals and an application to have the appeals all struck-out. The strike out application was under Tribunal Rule 8(3)(c) on the grounds that the Agency considered that there was no reasonable prospect of the Appellant’s appeals succeeding.

14. The Agency did not seek to take a technical point that appeals against restoration decisions cannot be made unless there has been a review of the decision by HMRC or the Agency. Nevertheless, the Tribunal cannot assume jurisdiction it does not possess and so I did proceed to consider whether there was jurisdiction to entertain the appeals.

15. The law is contained in sections 13A-16 Finance Act 1994. This was amended by the Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009/56 with effect from 1 April 2009. It is therefore the amended version of s13A-16 Finance Act 1994 which applies to all three appeals as all of the three decisions under appeal post-date the entry into force of the amendments. This version provides as follows:

“14 Requirement for review of a decision under section 152(b) of the Management Act etc

(1) This section applies to the following decisions by HMRC, not being decision under this section or section 15 below, that is to say –

(a) any decision under section 152(b) of the Management Act as to whether or not anything forfeited or seized under the customs and excise acts is to be restored to any person or as to the conditions subject to which any such thing is so restored;

(b) [omitted as not relevant]

(2) Any person who is –

(a) a person whose liability to pay any relevant duty or penalty is determined by, results from or is or will be affected by any decision to which this section applies,

(b) a person in relation to whom, or on whose application, such a decision has been made, or

(c) a person on or to whom the conditions, limitations, restrictions, prohibitions or other requirements to which such a decision relates are or are to be imposed or applied,

may by notice in writing to the Commissioners require them to review that decision.

(2A) [omitted as not relevant]

(3) The Commissioners shall not be required under this section to review any decision unless the notice requiring the review is given before the end of the period of forty-five days beginning with the day on which written notification of the decision, or of the assessment containing the decision, was first given to the person requiring the review.

(4) [omitted]

(5) [omitted]”

16. The effect of this section is that HMRC is obliged to carry out a review of their decision if a person affected by the decision – such as the Appellant in this case – notifies HMRC within 45 days of HMRC’s decision that they want it reviewed. References to HMRC or the Commissioners are now, as per s5 of the Borders, Citizenship & Immigration Act 2009, to be read as references to the Border Agency as well.

17. Section 15 provides:

“15 Review procedure

(1) Where the Commissioners are required in accordance with section 14 or 14A to review any decision, it shall be their duty to do so and they may, on that review, either –

(a) confirm the decision; or

(b) withdraw or vary the decision and take such further steps (if any) in consequence of the withdrawal or variation as they may consider appropriate.

(2) Where –

(a) it is the duty of the Commissioners in pursuance of a requirement by any person under section 14 or 14A above to review any decision; and

(b) they do not, within the period of 45 days beginning with the day on which the review was required, give notice to that person of their determination on the review,

they shall be assumed for the purposes of section 14 or 14A to have confirmed the decision.

(3) [omitted as not relevant]

18. Section 16 of the Finance Act 1994 contains the right of the aggrieved persons to appeal. Section 16(1) and (1A) gives a right of appeal against review decisions of HMRC, whether actual or deemed:

“16 Appeals to a tribunal

(1) An appeal against a decision on a review under section 15(not including a deemed confirmation under section 15(2) may be made to an appeal tribunal within the period of 30 days beginning with the date of the document notifying the decision to which the appeal relates.

(1A) An appeal against a deemed confirmation under section 15(2) may be made to an appeal tribunal within the period of 75 days beginning with the date on which the review was required.”

19. The rest of section 16 is lengthy and I shall not reproduce it in full here. It gives the right of appeal against a “relevant decision”. Section 13A gives the meaning of “relevant decision”. None of the subsections refer to restoration decisions, except S13A(2)(j) which specifically excludes “any decision under section 152(b) of the Management Act as to whether or not anything forfeited or seized under the customs and excise Acts is to be restored to any person or as to the conditions subject to which any such thing is so restored.” In other words, a decision under S152(b), such as the two decisions at issue in this case is not a “relevant decision” and no appeal against it lies under section 16. The only route to an appeal is therefore via a review as s16(1) and (1A), as stated above, allows a review decision to be appealed.

20. There was no review in this case. So I have to decide whether the Appellant was within the 45 day time limit when it applied for the review. If so, there is a deemed review (under Section 15(2)(b) cited above) which can be appealed under Section 16(1A). If not, I have no jurisdiction to hear the appeal itself but nevertheless in such a case I would not necessarily be without jurisdiction: I have power to order a review under s14A(4)(b) as set out below.

Were the reviews requested in time?

21. The HMRC’s decisions on restoration were given to the Appellant by letters dated 24 July 2009. The Agency’s evidence was that these letters were both faxed: and I accept this as the Liquidator himself confirms it in his Notice of Appeal where he says that he received the decision letters by fax on 24 July. (In any event, the letters show the Appellant’s correct fax number and (albeit somewhat illegible) there is a fax confirmation line printed across the foot of the page with the date “24 July”.)

22. So under s14(3) notice requesting a review had to be given by the Appellantno later than 6 September (ie the last day for the period of 45 days beginning with 24 July). I note that both the Border Agency and the Appellant calculate the last day as being 7 September.

23. The Agency’s uncontested evidence was that they received the two undated letters (mentioned in paragraph 5 above) from the Appellant’s liquidator on 9 September 2009 and we accept this evidence.

24. The evidence from the liquidator in the notices of appeal was that he sent the request for review of the decision relating to the first trailer on 2 September and for the second trailer on 3 September 2009. He attached to the notices of appeal copies of his letters requesting a review, which he had sent by registered post, with the stamp by the Treviso post office showing the dates they were posted, being, respectively, the 2^nd and 3^rd September 2009. There was also a confirmation printed off from the Italian post office’s website showing that two letters had been posted to “GB” on the dates the liquidator said (although interesting they also show that the Milan post office sent each letter off to “GB” a day later, which might explain some of their delay in reaching the Agency.)

25. We accept this evidence and indeed the Agency did not contest it. Whether the reviews were requested in time therefore comes down to construction of the law. S14(3) (set out in full above) refers to the Appellant’s request for a review as having to be “given” no later than 45 days after notification in writing by HMRC was “first given” to the Appellant.

26. The Agency’s view is that notice is “given” on the day it is received by HMRC or the Agency. Counsel informed me that he was however unaware of any authority on the point.

27. On the other hand, as Counsel himself pointed out, s14(3) uses the word “given” twice: firstly to refer to the notice given by the Appellant to the Agency and secondly to refer to the earlier notification of the decision given by HMRC to the Appellant. It seems to me that “given” must have the same meaning in both places in which it is used in the same sub-section.

28. HMRC’s view is that where “given” is used in respect of notification given by HMRC this refers to when HMRC posts the notice to the Appellant. If this view is right, in my view it necessarily follows therefore that the liquidator gave notice when he posted the letters on 2^nd and 3^rd September, and that this would have been in time.

29. But is this the right view? Although not cited to me in the hearing, I looked at the Interpretation Act 1978 which at section 7 provides as follows:

“References to service by post

Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post”

30. However, having considered it, I do not think it applies to Section 14(3) Finance Act 1994. S7 of the Interpretation Act applies to references to service by post. And although it makes it clear that the word “service” need not be used, it only applies where the Act to be interpreted requires communication by post. S14(3) makes reference only to giving notice: it does not require notice to be given by post.

31. If s7 did apply this would not be helpful to the Appellant’s case in that the Agency’s evidence, which we accept, is that it did not receive the letters until 9 September. So, as per the last phrase of s7, the contrary has been proved. The letters did not arrive in the ordinary course of post: it took 6 to 7 days for them to arrive which seems a long time for a registered letter from another European country.

32. Nevertheless, I do think that s7 reflects the more normal meaning of giving notice: that notice is given when received and not merely when posted. I consider, of course, that this also applies to the notification given by the Agency to the Appellant. However, that is no help to the liquidator as the Agency faxed its notification to him on 24 July. So it was received on the day on which it was sent.

33. The effect of my decision is therefore that that I find that the notice given by the liquidator was three days late. Therefore there was no deemed review and I have no jurisdiction to hear the appeals and must strike out the first and second appeals. As stated above, that is not the end of the case as I have power to order a review out of time under s14A(4)(b) Finance Act 1994 as set out below.

Should I order a review out of time?

34. Section 14A Finance Act 1994 provides:

“14A Review out of time

(1) This section applies if –

(a) a person may, under section 14(2), require HMRC to review a decision, and

(b) the person gives notice requiring such a review after the end of the 45 day person mentioned in section 14(3).

(2) HMRC are required to carry out a review of the decision in either of the following cases.

(3) The first case is where HMRC are satisfied that –

(a) there was a reasonable excuse for not giving notice requiring a review before the end of that 45 day period, and

(b) the notice given after the end of that period was given without unreasonable delay after that excuse ceased.

(4) The second case is where –

(a) HMRC are not satisfied as mentioned in subsection (3), and

(b) the appeal tribunal, on application made by the person, orders HMRC to carry out a review

(5) [omitted as not relevant]

(6) [omitted as not relevant]

35. I have found that, as per Section 14A(1)(b), the Appellant gave notice outside the 45 day period. Notice should have been given no later than 6 September but was in fact given on 9 September. The Agency wrote to the Appellant on 8 October (as mentioned above) refusing to extend time to request a review on the grounds that the Agency did not consider the Appellant to have a reasonable excuse for giving notice 2 days late.

36. Therefore the Appellant falls into s14A(4). The Agency is “not satisfied as mentioned in subsection (3)” and an application has been made by the Appellant. This is the Appellant’s third appeal numbered TC/2009/15642 in which the Appellant says he invites the Tribunal to “review and modify” the Agency’s decision refusing to review its restoration decision.

37. Therefore, I have jurisdiction under s14A(4) to decide whether to order the Agency to carry out a review out of time. I have decided to exercise that power in favour of the Appellant and I do order the Agency to carry out a review.

38. The reasons for this are as follows:

(a) Although the Liquidator should have allowed for a reasonable time for the letter to cross the postal systems between Italy and the UK, it was not unreasonable in my view to expect letters posted by registered post on 2^nd and 3^rd to have arrived no later than the 6^th September;

(b) The Liquidator (and HMRC) had in any event miscalculated (it seems from his Notice of Appeal) and thought he had until 7^th September;

(c) I discount the point made by the Agency officer who wrote the letter of 8 October that the Liquidator should have faxed the letters as he had faxed earlier letters to the Agency. The Liquidator explains his reasoning in that the letters of 24 July gave a specific postal address to which requests for reviews were to be sent: there was no fax number given. He says he assumed the review would be by an independent body and would have a different fax number to the one he had used before. So he reasonably thought post was his only option.

(d) The Liquidator is at a disadvantage in having to deal with this appeal from another country;

(e) The approach of Counsel at the hearing was that the Agency did not want to take a point on the timing I presume because it was only a matter of a few days. As mentioned above in paragraph 13, I did not feel that I could ignore the issue of jurisdiction and that therefore I had to consider whether the notice was given within 45 days. Nevertheless, the Agency’s view was that they wanted the appeals struck out on the grounds of no reasonable prospect of success and did not want to take a point on timing;

(f) The requests for review were, after all, only 3 days late. Although time limits are meant to be adhered to and a time limit of 45 days is more generous than many in tax legislation, nevertheless both HMRC and the Tribunal is given a power to extend it and it must have been intended that such power could be used. It would not be used in many cases, but although perhaps this case is borderline, I have concluded that it is right in this case to extend time and order the Agency to carry out a review out of time.

Conclusion

39. The effect of my decision therefore is that the appeals against HMRC’s decision (TC/2009/15637) in relation to the first trailer to offer restoration subject to the payment of a sum of money and (TC/2009/15640) in relation to the second trailer to refuse restoration are struck out under Rule 8(2)(a) of the Tribunal Rules on the grounds that the Tribunal does not have jurisdiction to hear them because there is no right of appeal against unreviewed restoration decisions. Under Rule 8(4) I can not strike out proceedings unless the Appellant has been given an opportunity to make representations in respect to the striking out: that opportunity was at the hearing today.

40. The Liquidator’s third appeal, TC/2009/15642, however, is allowed. I order HMRC to carry out a review of the restoration decisions in respect of the first and second trailer as notified in their letters of 24 July.

41. In practice, as can be seen from below, the effect of my decision is virtually the same as it would have been had I decided that the review requests were made in time.

No reasonable prospect of success

42. My decision was reserved on the day and so Counsel argued his case that the first two appeals should be struck out were I to find, contrary to the decision that I have reached, that there was a deemed review by HMRC in those cases and that I had jurisdiction to hear those appeals.

43. As the point was argued I have decided to record what my decision would have been had I found I had jurisdiction. HMRC’s view was that the appeals had no reasonable prospect of success because the Liquidator did not put forward any arguable grounds of appeal. The grounds given by the Liquidator in the Notice of Appeal were:

“The Trustee in Bankruptcy cannot even by held responsible for seizures carried out as a consequence of offences committed by the Company before the adjudication in bankruptcy, which he has nothing to do with.

The writer [ie the Liquidator] is neither familiar with the relations between BT Trasporti srl and the company on behalf of which the carriage of goods was performed, leading to the seizure of the [trailers]…nor is he in a position to clarify or justify the discrepancy detected by HM Revenue between the date stated on the shipping documents and the date on which the goods arrived in Dover.

The trade relations and the abovementioned facts occurred when the company had not yet been declared bankrupt and the writer had not been appointed Trustee in Bankruptcy by the court to perform the liquidation of the assets of the company.

The Trustee in Bankruptcy is in charge of looking after the interests of all the creditors of the company …and in the exercise of his duties, the writer has requested that the [trailers] be returned.”

44. In summary, the Liquidator’s grounds of appeal were (a) that he was not personally responsible for nor aware of what happened in Dover as this was before the liquidation of the company and his appointment and (b) he wanted the trailers to increase the assets available to the creditors in the Appellant’s liquidation. In the Agency’s view neither of these points would be relevant in an appeal and I agree.

45. The Tribunal’s jurisdiction is to consider the reasonableness of the decision made by HMRC. This is because s16(4) Finance Act 1994 applies to limit the jurisdiction to one where in order to act, the Tribunal has to be satisfied that HMRC made a decision that could not reasonably have been arrived at.

46. When reaching its decision, HMRC should have taken into account to what extent the Appellant was to blame for the evasion of excise duty in that its trailers were used to carry alcohol on which duty was sought to be evaded. The fact that subsequent to these events control of the Appellant passed to a liquidator who could not have had anything to do with the events leading up the seizure is entirely irrelevant: else any company involved in excise irregularities could successfully claim restoration merely by changing directors and/or shareholders after the event.

47. However, although I agree with Counsel for HMRC that the Liquidator has not so far put forward a case with any reasonable prospect of success, in my view that does not conclude the issue. The Tribunal has to review the reasonableness of HMRC’s decision. It cannot do this where no reasons for the decision have been given. In this case, all the Appellant or the Tribunal knows about HMRC’s reasons to offer restoration subject to payment (in the case of the first trailer) and to refuse restoration (in the case of the second trailer) is as set out in HMRC’s decision letters of 24 July. In this the officer states:

“From the information before me I consider that the haulier to have been complicit and/or reckless in this case”.

48. Counsel speculated that the evidence which HMRC may have used to arrive at this conclusion would be that the Appellant’s trailers were used on two separate occasions to ferry excise goods without payment of duty (presumably on the principle that once might be misfortune but twice looks suspicious). However, that is mere speculation: HMRC do not give this or any other reason for considering the haulier to have been complicit or at least reckless.

49. I could not therefore have struck out the case as having no reasonable prospect of success. It is for HMRC to give its reasons. Until those reasons are given, the Tribunal cannot judge whether HMRC’s decision was reasonable.

50. Counsel informed me that it was usual for HMRC in these cases to give very little information in the restoration decisions. It is only where the restoration is challenged and a review requested that full reasons would be given. As an appeal can only take place after a review, the only time such a matter would therefore come before a Tribunal without reasons would be where HMRC were deemed to have carried out a review but had not in fact done so (under S15(2) as set out above).

51. That would have been the situation in this case had I decided the request for a review had been made within the 45 days. Had that happened I would have refused the Agency’s request for a strike-out and Directed that they provide reasons for their decision to the Appellant within a reasonable time frame. This would then have enabled the Appellant to take an informed decision whether it is worth while pursuing this matter. And as mentioned above in paragraphs 40-41, in practice that decision is very similar in effect to the one which I have actually reached, which is to order HMRC to carry out a review.

52. No doubt HMRC’s review letter, if it upholds HMRC’s original decisions, will remind the Appellant that under s16 if he wishes to appeal he must do so within 30 days of the date of the document notifying the decision.

53. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

First-tier Tribunal (Tax)

THE DIRECTOR OF BORDER REVENUE

Respondent