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	United Kingdom VAT & Duties Tribunals Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> RCS Ltd v Revenue & Customs [2008] UKVAT V20601 (04 March 2008) URL: http://www.bailii.org/uk/cases/UKVAT/2008/V20601.html Cite as: [2008] UKVAT V20601

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COSTS - appeal against direction to keep detailed records – direction complied with – direction then withdrawn leaving no appealable matter – appeal withdrawn four days before hearing but withdrawal not effectively communicated – Treasury incurring costs in preparing for appeal – whether Appellant should bear those costs – yes.

MANCHESTER TRIBUNAL CENTRE

RCS LIMITED Appellant

- and -

THE TREASURY Respondents

Tribunal: Colin Bishopp (Chairman)

Heather Kelly

Sitting in public in Douglas on 29 January 2008

The Appellant did not appear and was not represented

Ian Hutton, counsel, instructed by and for the Treasury

© CROWN COPYRIGHT 2008


 


DECISION
2. This was an appeal by RCS Limited against a direction made by the Treasury on 6 November 2006 pursuant to paragraph 8A of Schedule 12 to the Value Added Tax Act 1996. The direction required RCS to keep detailed records of the goods – mobile phones – in which it was dealing. We were told that, despite its unsuccessful protest against the direction and its appeal to this tribunal, RCS in fact complied with the direction.
3. The direction was withdrawn on 10 December 2007 since, as the letter notifying RCS of its withdrawal pointed out, the Treasury was content to rely instead on the reverse charge mechanism introduced by virtue of European Union derogation. On the following day the Treasury invited RCS to consider withdrawing the appeal.
4. RCS, by its solicitors, did withdraw the appeal but not until 25 January 2008, and then in a confusing manner. A letter was sent by fax to the Treasury; the letter did not itself indicate that the appeal was to be withdrawn, but referred to another letter supposedly attached to it. No doubt by error the second letter was not in fact sent at the same time (as is apparent from the fax header on the letter which was sent) and it was not received by the Treasury. Telephone calls to the solicitors in which a copy was requested, we were told, did not result in its production. The letter was sent by fax to the tribunal, on 25 January, but as it bore no reference number nor the date of the pending hearing it was not immediately married with the relevant file.
5. The outcome was that the Treasury instructed counsel to appear before us, since it was not until the morning of the hearing that it became aware that the appeal had been withdrawn. Ian Hutton, counsel appearing for the Treasury, contended that the appeal had always been of dubious merit, since RCS had complied with the direction, and that the lateness of the withdrawal, and its ineffective communication to the Treasury, had led to its incurring unnecessary costs which should be met by RCS. He told us that, had the appeal been withdrawn by RCS soon after withdrawal of the direction itself, in response to the Treasury's suggestion to that effect, the Treasury would have been willing to bear its own, at that time minimal, costs; but in view of the delay it was appropriate that RCS pay them.
6. While we express no comment on the merits of an appeal we have not heard, we are satisfied that the Treasury's application should succeed. It should have been obvious to RCS, as soon as it received the letter withdrawing the direction, that pursuing the appeal further served no useful purpose. Its delay and its poor communication of its abandonment of the appeal have caused the Treasury to incur unnecessary costs, and it is right that it should bear those costs. We direct therefore that RCS pay the Treasury's costs of and incidental to and consequent upon the appeal which, if they cannot be agreed, are to be assessed by the Chief Registrar of the General Registry.

COLIN BISHOPP

CHAIRMAN
Release Date: 4 March 2008

MAN/07/0353