The Supreme Court has imposed restrictions on CAB's tax-collecting powers, writes Carol Coulter
It might be argued that when the Criminal Assets Bureau was set up, the legislature and the public did not have in mind its pursuit of street traders for unpaid tax. Yet the pursuit of money owed to the Revenue Commissioners has become one of its functions.
Yesterday the Supreme Court reminded the CAB, and the High Court, of the provisions for tax collection that exist in our taxation laws, and the procedures they contain. The CAB cannot substitute the freezing of assets for the procedures contained in the legislation, it said.
The Supreme Court judgment recalled that on June 16th, 1999, assessments were raised by the Revenue Commissioners on Mr Hunt for sums totalling £1.7 million, covering a 10-year period of unpaid tax. Proceedings were issued the following day, and an injunction obtained preventing him from reducing his assets below this figure.
Under taxation law a person assessed for tax has a number of weeks in which to appeal the assessment. However, these proceedings were brought the day after the assessment, so that the applicant could not appeal them before the High Court froze his assets.
The Criminal Assets Bureau accepted that the tax assessment was not "final and conclusive" but argued that the money was "due and payable," and that therefore it was entitled to take High Court proceedings to get it.
In his judgment the Chief Justice commented: "The submission on behalf of the bureau, if well founded, would have the surprising and, it would seem, anomalous consequences that a diligent and honest taxpayer, who had made a return and paid the preliminary tax which he bona fide believed to be the extent of his liability, could be subjected to expensive High Court proceedings and deprived, at least for a period, of his statutory right to dispute the Revenue's claim as to the amount owed in the appeal procedure prescribed by statute."
He then went on to consider the anomaly that arises if the issue of tax payable is being considered by two bodies at the same time - the High Court and the Revenue Commissioners' own appeals procedures. The position taken by the CAB, that the High Court could determine a person's tax liability despite the existence of appeals machinery, was "not well founded."
He said it was clear that the bureau took this course of action because it wanted to freeze the assets of the couple concerned while their tax liability was being determined. While understandable, this was a power that should be given by the Oireachtas, not the courts.
He also rejected the argument that the issuing of a demand for unpaid taxes could take the form of the institution of proceedings. The Collector General must make a demand through the issuing of a certificate before instituting proceedings, he said.
Mr Justice Keane rejected a claim from the applicants that the whole proceedings should not have been brought in the first place because there was no evidence that the assets were the proceeds of crime. He said there was evidence the bureau suspected the assets were the proceeds of crime, and there was evidence that such suspicions were "reasonably entertained".
This suggests that in future cases officers might be asked to explain why such suspicions were "reasonably entertained."
This case was one of a number challenging the powers of the CAB, most of which have failed. It succeeded in restricting its tax-collection powers to dealing with issues that fall outside normal taxation law.