The Commissioners for Her Majesty’s Revenue & Customs v Saqib Munir [2019] UKUT 280
- Summary
- Citing
- Cited By
In The Commissioners for Her Majesty’s Revenue & Customs v Saqib Munir [2019] UKUT 280 (TCC) the Upper Tribunal allowed HMRC’s appeal against a First‑tier Tribunal decision refusing to strike out Mr Munir’s appeal against an excise duty assessment of £22,044.
Mr Munir had pleaded guilty on 4 May 2017 at Manchester Magistrates’ Court to being knowingly concerned in the fraudulent evasion or attempt at evasion of excise duty contrary to section 170(2) of the Customs and Excise Management Act 1979 and was sentenced to a community order with 200 hours unpaid work together with a victim surcharge and costs totalling £170. HMRC issued the assessment on 21 July 2017. Mr Munir appealed to the Tribunal on grounds that he had already been charged and punished, the goods did not belong to him and he could not afford to pay. HMRC applied to strike out the appeal on the basis it had no reasonable prospect of success.
The undisputed facts were that on the date in question police stopped Mr Munir driving a Fiat Doblo van along Bury New Road in Manchester. He attempted to flee. When HMRC officers searched the van they found 44,734 cigarettes and 54 kilograms of hand‑rolling tobacco in the rear together with £4,065 cash and two mobile phones on Mr Munir’s person. In interview Mr Munir denied knowledge of the contents of the van and stated he did not have keys to the back. He claimed the van belonged to his boss, Mr Hama Hussain, who had asked him to collect it from a car park and park it at a specified location for a fee of £30. He said the cash found on him belonged to his boss.
The First‑tier Tribunal dismissed HMRC’s strike‑out application and stated at paragraph 36 that HMRC had come nowhere near showing the appeal had no reasonable prospect of success. It gave three reasons. First, the offence of being knowingly concerned in fraudulent evasion of duty did not necessarily involve “holding” excise goods for the purposes of regulation 10 of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010. Second, it was open to Mr Munir to adduce evidence that he did not in fact commit the offence to which he had pleaded guilty, including evidence from his solicitor that he was advised to plead guilty to avoid a custodial sentence. Third, it was not unrealistic or fanciful that Mr Munir might show he was not holding the goods for the purposes of the regulations.
The Upper Tribunal accepted HMRC’s submissions on four grounds of appeal, though considered grounds one and two together because of their overlap. HMRC argued that the First‑tier Tribunal had ignored the facts behind the guilty plea and failed to recognise that being “involved in the holding” of goods within regulation 10(2) was sufficient to fix liability. HMRC also contended that the Tribunal had failed to give proper weight to the conviction and the facts behind it, perversely concluded that Mr Munir had a realistic prospect of showing he had pleaded guilty only because of his solicitor’s advice, and improperly constructed a case for Mr Munir that was neither pleaded nor supported by evidence.
The Upper Tribunal considered the First‑tier Tribunal’s approach to section 11 of the Civil Evidence Act 1968, which provides that a conviction is admissible in civil proceedings to prove the commission of an offence and gives rise to a presumption that the person committed the offence unless the contrary is proved. Judges Cannan and Greenbank held that the First‑tier Tribunal was right to identify that a conviction is not conclusive but erred in its treatment of the presumption and the weight to be attached to the conviction. The Upper Tribunal emphasised at paragraph 35 that in civil proceedings the existence of a conviction will itself carry weight and the weight to be attached to it is a matter for the hearing judge. In the present case the Tribunal could not see that the First‑tier Tribunal gave any weight to the fact of the conviction or to the undisputed circumstances generally.
The Upper Tribunal held that a person who had pleaded guilty to being knowingly concerned in the fraudulent evasion of excise duty must, unless he could rebut the presumption, be taken to have known that the van contained goods on which duty had not been paid. Once that knowledge was established, the Upper Tribunal concluded that Mr Munir was plainly “involved” in holding the goods for the purposes of regulation 10(2) of the 2010 Regulations. Even if Mr Munir could not physically access the goods because they were locked in the back of the van, he knew they were there and on the undisputed facts he was transporting them for the person who had control of the goods. The Upper Tribunal noted at paragraph 32 that the First‑tier Tribunal referred to regulation 10(2) but ought to have recognised that subject to any evidence Mr Munir might adduce to rebut the presumption of knowledge, Mr Munir must have been involved in the holding of the goods so as to justify the assessment.
The Upper Tribunal then considered whether the First‑tier Tribunal had been entitled to conclude that Mr Munir had a reasonable prospect of rebutting the presumption that he knew the van contained goods on which excise duty had not been paid. It held that the First‑tier Tribunal had offered no proper analysis of the evidence and had focused on Mr Munir’s assertions as to the circumstances without considering in the light of all the material available what weight should be given to those assertions. The Upper Tribunal considered it relevant that Mr Munir had pleaded guilty in the presence of his solicitor on the advice that he would not receive a custodial sentence. It observed at paragraph 46 that such advice is given every day in criminal courts and does not of itself suggest any improper pressure to plead guilty despite being innocent. The Upper Tribunal also took into account Mr Munir’s claim during the hearing that his solicitor had advised him he was guilty because he had driven the van without checking its contents, though it noted that such evidence did not appear in the First‑tier Tribunal’s decision. It further considered Mr Munir’s explanation that he had fled because he was uninsured and had no driving licence, observing that this did not reflect well on his honesty and credibility.
The Upper Tribunal was satisfied at paragraph 36 that the First‑tier Tribunal erred in law in two respects. First, it failed to find that unless Mr Munir could establish at a final hearing that he did not have knowledge that the vehicle contained excise goods on which duty had not been paid, his appeal would inevitably be dismissed. Second, it erred in failing to take into account and give weight to the fact of the conviction and the undisputed facts more generally in considering whether Mr Munir had a reasonable prospect of establishing at a final hearing that he did not have such knowledge.
The Upper Tribunal set aside the First‑tier Tribunal’s decision and re‑made it itself rather than remitting the matter, on the basis that all the evidence available to the First‑tier Tribunal was available to it and that remission would cause unnecessary delay and expense. The Upper Tribunal briefly addressed HMRC’s third and fourth grounds of appeal. As to the third ground, which raised the possibility that some of the goods were marked as UK duty paid but suspected counterfeit, the Upper Tribunal considered that the First‑tier Tribunal had not attempted to evaluate that argument objectively by reference to the facts and evidence available and that it appeared to be nothing more than a postscript that formed no part of its decision. There was no purpose in mentioning it and in doing so the First‑tier Tribunal failed to follow the approach endorsed by the Upper Tribunal in Liam Hill v HMRC [2018] UKUT 45 (TCC), namely that care must be taken in identifying and objectively evaluating grounds of appeal not raised by the appellant and that any such grounds should be based on facts discernible from the evidence before the tribunal.
In re‑making the decision the Upper Tribunal considered all the evidence available to it, including the transcript of Mr Munir’s interview. It concluded at paragraph 49 that the only conclusion it could draw from all the evidence and in the light of the conviction was that Mr Munir would have no reasonable prospect of establishing that he did not know the van contained goods on which excise duty had not been paid and therefore had no reasonable prospect of succeeding in his appeal. It also noted that the majority of Mr Munir’s stated grounds of appeal were no answer to the assessment: the fact that the goods might belong to another person did not prevent an assessment being made on a person involved in holding the goods within regulation 10(2); the fact that he had been convicted and sentenced, or that he could not afford to pay, provided no grounds on which the assessment could be set aside or reduced.
In short, the Upper Tribunal allowed HMRC’s appeal, set aside the First‑tier Tribunal’s refusal to strike out, and itself struck out Mr Munir’s appeal against the excise duty assessment on the ground that in light of his guilty plea and all the surrounding circumstances he had no reasonable prospect of establishing that he lacked knowledge of the excise goods in the van.
HM Revenue & Customs v Perfect [2019] EWCA Civ 465
Liam Hill v HMRC [2018] UKUT 45
Chambers v Rooney [2017] EWHC 285
Atlantic Electronics Ltd. v. HMRC [2013] EWCA Civ 651
CXX v DXX [2012] EWHC 1535 (QB)
McKeown and Others v The Commissioners for HM Revenue and Customs [2016] UKUT 479 (TCC)