Practice – Parties – Joinder – Proceedings between subjects raising issues material to income tax – Joinder of Commissioners of Inland Revenue – Income Tax Act 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c.10), ss. 52 and 64 ; Income Tax Management Act 1964 (c.37), 5.5(6); R.S.C., Ord. 15, r.6(2).
The House clarified the exclusive nature of the jurisdiction of the special or general commissioners. This principle is not to be taken to exclude the jurisdiction of the courts to decide a question of fact or law which is a basis for an income tax assessment where the taxpayer and the revenue so agree, provided the assessment to which the question relates has not become final and provided also the question, ‘in form suitable for decision by the court’, is not ‘so close to the question of the assessment itself’ that the court should decline to entertain it. But either the taxpayer or the revenue have the right to insist the statutory procedure should be followed.
Viscount Dilhorne said: ‘The many reported cases in which this rule has been considered were comprehensively reviewed by Devlin J . . . in Amon -v- Raphael Tuck and Sons Limited . . . In this case the Court of Appeal held that there should be a wide interpretation of the rule. Whether this interpretation is wider than that stated by Devlin J . . . it is not necessary to consider. My difficulty about accepting Lord Denning’s wide interpretation is that it appears to me wholly unrelated to the wording of the rule. I cannot construe the language of the rule as meaning that a party can be added whenever it is just or convenient to do so. That could have been simply stated if the rule was intended to mean that. However wide an interpretation is given, it must be an interpretation of the language used. The rule does not give power to add a party whenever it is just or convenient to do so. It gives power to do so only if he ought to be joined as a party or if his presence is necessary for the effectual and complete determination and adjudication upon all matters in dispute in the cause or matter. It is not suggested that the revenue ought to have been joined.’
Lord Wilberforce said: ‘There may be questions, in form suitable for decision by the court, which are in fact so close to the question of the assessment itself that the court ought not to entertain them but leave them to the statutory procedure. And nothing that I have said must be taken to imply that either the Crown, or the taxpayer, may not be entitled to insist that a particular question, as between them, be so decided. But I find nothing in the income tax legislation to justify the comprehensive proposition for which the appellants contend, namely, that the High Court is absolutely excluded from a vast range of issues of a kind normally justiciable by it, just because those questions arose between the taxpayer and Crown and form a basis, even a necessary basis, for an income tax assessment.’
Lord Diplock: ‘Section 5(6) of the Income Tax Management Act 1964 provides that after notice of assessment has been served ‘the assessment shall not be altered except in accordance with the express provisions of the Income Tax Acts.’ The only way in which an assessment can be altered under the provisions of the Income Tax Acts is by the special commissioners on an appeal to them by the party assessed.’
Lord Wilberforce, Viscount Dilhorne, Lord Hope of Craighead (dissenting), Lord Diplock
[1971] AC 912, [1970] UKHL TC – 46 – 341, [1970] 3 WLR 452, [1970] 3 All ER 16, [1970] TR 129,, 46 TC 341
Bailii
Income Tax Management Act 1964 5(6), Income Tax Act 1952
England and Wales
Citing:
Cited – Barraclough v Brown HL 1897
The 1889 Act gave statutory undertakers who had incurred expenditure in removing a sunken vessel a right ‘to recover such expenses from the owner of such vessel in a court of summary jurisdiction.’ the undertakers began their action in the High . .
Appeal from – In re Vandervell’s Trusts; Vandervell Trustees Limited v White and Others CA 1970
The deceased had sought to create a trust to benefit the Royal College of Surgeons. The parties disputed its tax effect.
Held: Lord Denning MR said: ‘We will in this court give the rule a wide interpretation so as to enable any party to be . .
Cited – Amon v Raphael Tuck and Sons Ltd 1956
The court analysed the circumstances under which additional parties might be joined to an action by a defendant, applying a narrow interpretation. The court considered whether a defendant may be added against the parties’ wishes: ‘There are two . .
Cited by:
Cited – Kinane v Mackie-Conteh CA 1-Feb-2005
The court upheld a declaration by the trial judge that the claimant was an equitable chargee under an equitable charge of the defendant’s property, notwithstanding that the claimant relied on an oral agreement by the defendant for the grant to the . .
Cited – Autologic Holdings Plc and others v Commissioners of Inland Revenue HL 28-Jul-2005
Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by . .
Cited – Matalan Retail Ltd v Revenue and Customs ChD 5-Aug-2009
The taxpayer imported swimwear for sale. The respondent had incorrectly indicated that such swimwear had one classification. The claimant sought to prevent the respondent reclassifying the goods, saying that they had made given binding tariff . .
Lists of cited by and citing cases may be incomplete.
Updated: 25 September 2021; Ref: scu.229080