CGI Group (Europe) Ltd v Revenue & Customs , First-tier Tribunal (Tax), Judgment, Law, casemine.com

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59.�� I therefore make the directions sought by the Appellant.

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CGI Group (Europe) Ltd v. Revenue & Customs (Rev 1)

Smart Summary

Factual and Procedural Background

The Appellant seeks to add a new ground of appeal based on a claim of legitimate expectation regarding assurances contained in a specific paragraph of the Respondents' Notice. The hearing was scheduled for July 2010 with a five-day listing, and the Appellant requested directions for the service of additional evidence supporting this new ground. This application follows a recent judgment by a higher court which addressed the tribunal's jurisdiction to consider legitimate expectation claims under the relevant tax legislation.

Legal Issues Presented

Whether the tribunal has jurisdiction to consider a claim of legitimate expectation in the context of an appeal under section 83(1)(c) of the Value Added Tax Act 1994 (VATA).
The nature and extent of the tribunal's supervisory review jurisdiction in appeals against decisions or amounts determined by the tax authorities.
Whether a legitimate expectation can affect the amount of VAT chargeable or input tax creditable and thus fall within the tribunal's jurisdiction.
The applicability of public law principles, including those derived from the Human Rights Act 1998 (HRA), in tax appeals before the tribunal.
The scope of remedies available to the tribunal under section 8 of the HRA when a legitimate expectation claim is established.

Arguments of the Parties

Appellant's Arguments

The Appellant contends that it had a legitimate expectation to rely on assurances contained in the Respondents' Notice, which should be considered by the tribunal.
Relies on the authority of a recent higher court judgment that confirms the tribunal's jurisdiction to consider legitimate expectation claims under section 83(1)(c) VATA.
Argues that public law principles, including those under the HRA, are relevant and that the tribunal can provide appropriate remedies within its powers.
Contends that the tribunal's supervisory review jurisdiction encompasses consideration of whether the tax authorities acted unlawfully in seeking the relevant tax.
Maintains that the time limits for appealing to the tribunal are consistent with the need to give early notice to the tax authorities and do not undermine the claim.

Respondents' Arguments

The Respondents dispute that the tribunal has jurisdiction to consider legitimate expectation claims, particularly relying on a statement by the higher court judge which they regard as erroneous.
Argues that claims based on legitimate expectation effectively seek to be taxed otherwise than in accordance with the law, which falls outside the tribunal's jurisdiction.
Contends that the Administrative Court is the appropriate forum for judicial review claims involving wider fairness considerations affecting the general taxpayer body.
Points to statutory provisions conferring judicial review jurisdiction on a higher tribunal and argues that this does not deprive the tribunal of its limited jurisdiction but restricts it from entertaining such claims.
Highlights the strict time limits for judicial review, implying that the tribunal should not extend its jurisdiction to cover matters properly dealt with in judicial review proceedings.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Oxfam v HMRC [2009] EWHC 3078 (Ch)	Confirmed tribunal's jurisdiction to consider legitimate expectation claims under section 83(1)(c) VATA.	Relied upon as authority that the tribunal may hear legitimate expectation arguments affecting input tax credit.
Josie Rowland v The Environment Agency [2003] EWCA Civ 1885	Outlined differences between common law and HRA streams of legitimate expectation.	Used to explain the nature of legitimate expectation and its enforcement mechanisms.
Wandsworth LBC v Winder [1985] AC 461	Common law doctrine of legitimate expectation and abuse of power by public authorities.	Referenced as a foundational authority predating HRA.
Doherty v Birmingham City Council [2008] UHHL 57	Application of HRA principles to legitimate expectation claims.	Considered in assessing the HRA stream of legitimate expectation.
C & E Comms v JH Corbitt (Numismatists) Ltd 1980 STC 231	Limits on tribunal's supervisory jurisdiction under section 83 VATA.	Interpreted as restricting general supervisory jurisdiction but allowing specific supervisory review.
Kohanzad v CCE 1994 STC 967	Recognition of supervisory jurisdiction of tribunal under section 83(1)(c).	Supports existence of supervisory review jurisdiction in certain appeals.
John Dee Ltd v CCE 1995 STC 941	Characterisation of tribunal's jurisdiction as supervisory review under section 83.	Clarifies the nature of tribunal's powers in appeals under section 83.
Customs and Excise Commissioners v United Biscuits 1992 STC 325	Tribunal's jurisdiction in relation to extra statutory concessions.	Held tribunal had no jurisdiction to construe or apply concession but did not undermine decision on amount.
Customs and Excise Commissioners v Arnold [1996] EWHC Admin 52	Limits on tribunal's jurisdiction to quash Commissioners' decisions on concessions.	Held tribunal lacked jurisdiction to quash decision not to apply concession.
Marks and Spencer Ltd v Commissioners of Customs and Excise [1999] STC 205	Jurisdictional limits regarding supervisory review of Commissioners' conduct.	Confirmed tribunal's lack of general supervisory jurisdiction over Commissioners' conduct.
Customs and Excise Commissioners v National Westminster Bank plc [2003] EWHC 1822 (Ch)	Distinction between claims relating to amount of VAT due and claims requiring Commissioners to act.	Held tribunal lacked jurisdiction to supervise Commissioners' conduct but had jurisdiction over amount claims.
Bulves v Bulgaria [2009] ECHR 143	Legitimate expectation as a possession under Article 1 of the First Protocol to the ECHR.	Supported that legitimate expectation relating to tax repayment can constitute a possession.
R v North and East Devon Health Authority ex parte Coughlan [2001] QB 213	Categories of legitimate expectation claims.	Identified the relevant category applicable in tax appeals as discrete and limited.
R v Secretary of State for Employment ex parte Begbie [2000] 1 WLR 1115	Nature of legitimate expectation claims and their scope.	Referenced regarding the limited scope of legitimate expectation claims in tax context.
ex parte Wilkinson [2005] UK HL 30	Limitations on unlawful acts by public authorities under section 6 HRA.	Noted in relation to the powers of the tax authorities under the Taxes Management Act 1970.

Court's Reasoning and Analysis

The court conducted a detailed review of the nature and scope of the tribunal's jurisdiction under section 83 of the Value Added Tax Act 1994, emphasizing the importance of the specific wording of the relevant appeal provision. It distinguished between a general supervisory jurisdiction, which is not conferred, and limited supervisory review jurisdiction, which exists in certain cases.

The court explored two streams of legitimate expectation law: the traditional common law approach and the approach under the Human Rights Act 1998, which incorporates Article 1 of the First Protocol to the European Convention on Human Rights. The latter stream may afford protection even where the authority lacked power to make the representation, and permits reliance on Convention rights in tribunal proceedings.

The court found the recent higher court judgment in Oxfam v HMRC authoritative in confirming that the tribunal has jurisdiction to consider legitimate expectation claims affecting the amount of input tax creditable under section 83(1)(c). It reasoned that a legitimate expectation could affect the determination of the VAT chargeable under section 83(1)(b), thereby falling within the tribunal's jurisdiction.

The court rejected the Respondents' contention that legitimate expectation claims necessarily seek to be taxed otherwise than in accordance with law, explaining that under the Convention the taxpayer is enforcing rights under the law. It also addressed concerns about the wider fairness considerations and time limits for judicial review, concluding that such matters do not preclude tribunal jurisdiction in this context.

The court acknowledged that it was not deciding whether the Appellant actually had a legitimate expectation or whether the Respondents acted unlawfully, but held that there is at least a case warranting consideration by the tribunal. It deemed it fair and expedient to hear the legitimate expectation evidence and arguments concurrently with other issues at the scheduled hearing.

Holding and Implications

The court GRANTED the Appellant's application to add a new ground of appeal based on legitimate expectation and directed the service of additional evidence to support this ground at the forthcoming hearing.

The direct effect is that the tribunal will consider the legitimate expectation argument as part of the appeal, including any evidence and submissions related to it. The decision clarifies that the tribunal has jurisdiction to hear legitimate expectation claims that affect the amount of VAT chargeable or input tax creditable under section 83 of the VATA, incorporating public law principles and HRA rights.

No new precedent was established beyond confirming the application of existing authority and principles to the tribunal's jurisdiction. The ruling ensures that legitimate expectation claims are not excluded from tribunal consideration where they relate to the determination of tax amounts, subject to the tribunal's statutory powers and limitations.