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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  















Taxes Management - From: 1992 To: 1992

This page lists 4 cases, and was prepared on 02 April 2018.


 
 Inland Revenue Commissioners v Woollen; CA 1992 - [1992] STC 994
 
Inland Revenue Commissioners v Stenhouse's Trustees [1992] STC 103
1992


Taxes Management

1 Citers


 
Woolwich Equitable Building Society v Inland Revenue Commissioners (2) [1993] AC 70; [1992] 3 All ER 737; (1992) 3 WLR 366; [1992] UKHL TC_65_265
20 Jul 1992
HL
Lord Goff of Chieveley, Lord Browne-Wilkinson, Lord Slynn of Hadley; Lord Keith of Kinkel and Lord Jauncey of Tullichettle dissenting
Taxes Management, Constitutional
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. The Society sought to challenge the decision by judicial review. Held: At common law taxes exacted ultra vires were recoverable as of right, without the need to invoke a mistake of law by the payer. "The justice underlying Woolwich's submission is, I consider, plain to see. Take the present case. The revenue has made an unlawful demand for tax. The taxpayer is convinced that the demand is unlawful, and has to decide what to do. It is faced with the revenue, armed with the coercive power of the state, including what is in practice a power to charge interest which is penal in its effect. In addition, being a reputable society which alone among many building societies is challenging the lawfulness of the demand, it understandably fears damage to its reputation if it does not pay. So it decides to pay first, asserting that it will challenge the lawfulness of the demand in litigation. Now, Woolwich having won that litigation, the revenue asserts that it was never under any obligation to repay the money, and that it in fact repaid it only as a matter of grace. There being no applicable statute to regulate the position, the revenue has to maintain this position at common law. Stated in this stark form, the revenue's position appears to me, as a matter of common justice, to be unsustainable; and the injustice is rendered worse by the fact that it involves, as Nolan J. pointed out [1989] 1 W.L.R. 137, 140, the revenue having the benefit of a massive interest-free loan as the fruit of its unlawful action. I turn then from the particular to the general. Take any tax or duty paid by the citizen pursuant to an unlawful demand. Common justice seems to require that tax be repaid, unless special circumstances or some principle of policy require otherwise; prima facie, the taxpayer should be entitled to repayment as of right." and "the retention by the state of taxes unlawfully exacted is particularly obnoxious, because it is one of the most fundamental principles of our law – enshrined in a famous constitutional document, the Bill of Rights 1688 – that taxes should not be levied without the authority of Parliament; and full effect can only be given to that principle if the return of taxes exacted under an unlawful demand can be enforced as a matter of right. The second is that, when the revenue makes a demand for tax, that demand is implicitly backed by the coercive powers of the state and may well entail (as in the present case) unpleasant economic and social consequences if the taxpayer does not pay. In any event, it seems strange to penalise the good citizen, whose natural instinct is to trust the revenue and pay taxes when they are demanded of him."
Lord Slynn observed: "I do not consider that the fact that Parliament has legislated extensively in this area means that no principle of recovery at common law can or should at this stage of the development of the law be found to exist. If the principle does exist that tax paid on a demand from the Crown when the tax was the subject of an ultra vires demand can be recovered as money had and received then, in my view, it is for the courts to declare it. In so doing they do not usurp the legislative function. I regard the proper approach as the converse. If the legislature finds that limitations on the common law principle are needed for reasons of policy or good administration then they can be adopted by legislation . ."
Lord Goff considered whether, by changing the common law judges would be overstepping the boundary which separates legitimate development of the law from judicial legislation said: "I feel bound however to say that, although I am well aware of the existence of the boundary, I am never quite sure where to find it. Its position seems to vary from case to case. Indeed, if it were to be as firmly and clearly drawn as some of our mentors would wish, I cannot help feeling that a number of leading cases in your Lordships' House would never have been decided the way they were."
HL Income Tax - Building Society - Tax on interest and dividends - Without prejudice payments of tax whilst challenging vires of the Income Tax (Building Societies) Regulations 1986 - Regulations later declared ultra vires - Tax repaid - Whether interest payable for periods between payments of tax and that decision - Supreme Court Act 1981, 5 35A
Taxes Management Act 1970 33 - Bill of Rights 1688 - Income Tax (Building Societies) Regulations 1986
1 Cites

1 Citers

[ Bailii ]
 
Auckland (Inspector of Taxes) v Pavh (International) Ltd Gazette, 29 July 1992
29 Jul 1992
ChD

Corporation Tax, Taxes Management
Reduction of assessment for overcharge can only apply to wrong assessment.
Taxes Management Act 1970 50(6)

 
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