THE State may face a bill for loss of earnings resulting from the seizure of ponies and vehicles from Mrs Geraldine Gilligan, owner of the Jessbrook equestrian centre and wife of Mr John Gilligan, who is awaiting trial on drug trafficking charges in Britain.
The Department of Justice last night said it was considering the implications of yesterday's High Court decision that Mrs Gilligan was not liable for a tax bill of £1.6 million, served on her by the Criminal Assets Bureau.
The Government may seek to close off loopholes in the tax laws by bringing in changes through the Finance Bill due shortly.
Although no proceedings were issued yesterday, Mrs Gilligan may now be able to sue for "loss of use" of assets including to ponies, two jeeps, horseboxes, furniture and machinery seized by the criminal bureau last November, according to legal sources.
Last November the chief legal officer of the Criminal Assets Bureau and the man who served the tax demand on Mrs Gilligan, Mr Barry Galvin claimed in court that the entire estate of the Jessbrook centre derived from, Mr John Gilligan's "conduct of criminal enterprise".
"The bureau has also instituted proceedings to seize the entire Jessbrook centre and to levy £1.15 million in tax from Mr Gilligan's estate under the Proceeds of Crime Act.
Mr Gilligan is challenging both the tax demand and the Act on grounds that they are unconstitutional.
While the State is to continue to press for the seizure of the Gilligan assets, yesterday's High Court decision was acknowledged as a setback by officers close to the case.
The court found that the tax demand should have been served on Mr Gilligan and not his wife. Mr Gilligan is awaiting trial in London on charges of haying £300,000 in cash for drug trafficking purposes.
In his judgment yesterday, Mr Just ice Morris said it was clear "significant consequences" might flow from his determination of these issues.
It was no part of his function to consider any such consequences. He confined his judgment entirely to the issues before him which were matters of law arising out of a consideration of the income tax code.
Mrs Gilligan told the Irish Times at Jessbrook yesterday she was "very happy, obviously" at the court ruling, adding: "This is my home and I'm staying put." She said she had no income at the moment.
She said she believed her husband would be cleared of charges in London and would return to Ireland. "As soon as he's out he'll be straight over to sort out his own affairs."
Yesterday's court case is only one in what is likely to be a series of court cases concerning the assets of Mr Gilligan. The Criminal Assets Bureau had issued the tax demand on Mrs Gilligan apparently because it decided she was the owner of the equestrian centre, valued at between £3 million and £4 million for the tax year ending April 1995.
She maintained that although she was separated from her husband from mid1995, for the relevant period he was the "chargeable" person under the tax laws. The High Court agreed. The bureau estimated that £1.6 million was due in tax from "miscellaneous income" for the tax year ended April 1995.
Mrs Gilligan was represented by Hanahoe and Co, solicitors, whose offices were raided by the Criminal Assets Bureau last year. The company is instituting proceed against the State over the raid.