Jagtar Singh Rai & Anor (t/a Bursha Foods) v The Commissioners for HMRC

Jagtar Singh Rai & Anor (t/a Bursha Foods) v The Commissioners for HMRC

HMRC’s VAT assessments were made to the best of their judgment based on available till data, and the Appellants failed to provide credible evidence to reduce the assessed amounts. The Appellants’ conduct was careless, not deliberate, as there was insufficient evidence they knowingly submitted inaccurate returns. Penalties for deliberate conduct were reduced to careless, with increased mitigation for quality of disclosure.

Parties
Appellants: Jagtar Singh Rai and Sukhdev Singh Rai (T/A Bursha Foods); Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
21 June 2024
Procedural Posture
Tax Appeal / Judgment After Full Hearing
Outcome
Appeal against VAT assessments dismissed; appeal against deliberate penalties allowed in part; penalties recalculated for careless conduct with increased mitigation.
Legal Topics
VAT Assessments, Penalties for Inaccurate Returns, Careless Vs Deliberate Conduct, Disclosure Obligations
Tax Law VAT Assessments Penalties for Inaccurate Returns Careless Vs Deliberate Conduct Disclosure Obligations

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Parties

Jagtar Singh Rai and Sukhdev Singh Rai (T/A Bursha Foods)

Appellants

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Judgment After Full Hearing

Legal Issues

  1. 1 Whether HMRC's VAT assessments were made to the best of their judgment
  2. 2 Whether the Appellants' conduct was careless or deliberate for penalty purposes
  3. 3 Whether the data extracted from the tills was reliable and attributable to Bursha Foods

Ratio Decidendi

HMRC’s VAT assessments were made to the best of their judgment based on available till data, and the Appellants failed to provide credible evidence to reduce the assessed amounts. The Appellants’ conduct was careless, not deliberate, as there was insufficient evidence they knowingly submitted inaccurate returns. Penalties for deliberate conduct were reduced to careless, with increased mitigation for quality of disclosure.

Court Disposition

Appeal against VAT assessments dismissed; appeal against deliberate penalties allowed in part; penalties recalculated for careless conduct with increased mitigation.

Orders

  • VAT assessments for 11/14 to 11/15 confirmed; appeals against these assessments dismissed.
  • Penalties for 02/15, 05/15, 08/15 recalculated as careless with 60% mitigation for disclosure.