Key Facts
- •HMRC appealed an FTT decision in favor of Mr. Zaman regarding a Personal Liability Notice (PLN) for VAT.
- •The FTT decision followed a remittal from the UT due to an error of law in the original FTT decision.
- •The appeal was based on the argument that the FTT's decision was 'perverse' under Edwards v Bairstow grounds.
- •The case involved Zamco Ltd's importation of alcohol and whether VAT was correctly assessed.
- •The central dispute revolved around the location of the alcohol (UK or overseas) at the time of acquisition and sale by Zamco Ltd.
- •The FTT relied on documentation and Zamco Ltd's lack of UK premises to support its finding that the goods were located overseas.
- •The FTT acknowledged inconsistencies and potential illicit activity in the supply chain but found insufficient evidence to conclude that Zamco Ltd was involved in smuggling.
- •HMRC argued that the FTT wrongly weighed the evidence, particularly the documentation, in light of the illicit activity finding.
Legal Principles
Edwards v Bairstow 'perversity' test: A decision is perverse if no reasonable tribunal could have reached it on the evidence.
Edwards v Bairstow [1956] AC 14
Burden of proof for PLN: HMRC must prove the PLN's validity, while the trader must prove the VAT assessment is incorrect.
UT 2022 decision ([2022] UKUT 00252 (TCC))
Appellate interference with fact-finding: Appellate courts should avoid second-guessing fact-finding tribunals unless compelling reasons exist.
Case law implicitly discussed in section 33
Outcomes
Appeal dismissed.
The UT found that HMRC had not met the high threshold for overturning a fact-finding tribunal's decision. The UT held that the FTT's weighing of the evidence, including the documentation and the finding of illicit activity, was not an error of law, even though a different conclusion was possible.