The High Court has declared that Arderin Distillery Limited had a legitimate expectation of excise relief for alcohol used to make hand sanitiser during the early COVID-19 emergency, if it can satisfy Revenue that the alcohol was properly accounted for and used for that purpose.
The judgment, delivered by Ms Justice Siobhán Phelan on 10 May 2022, did not decide how much sanitiser the company made, how much was released to market or how much alcohol qualified for relief. Those questions remain for the Revenue Commissioners.
The distillery applied on 20 March 2020 to receive 80,000 litres of ethanol without Alcohol Products Tax (APT), saying it intended to make sanitiser for health services. It later obtained provisional product approval from the Department of Agriculture, Food and the Marine (DAFM). The company said a Revenue officer verbally approved its application on 24 March. Revenue denied that any approval was given.
On 1 April, the company submitted a second application seeking authorisation for a much larger quantity: 800,000 litres annually, with a holding stock of 60,000 litres. Revenue sought further information and said a substantially increased bond would be required. The company did not answer those queries because demand had eased and it no longer needed the larger quantity. It said it produced sanitiser on the basis of the original application.
Revenue contacted the company in June and directed it to stop production, saying it lacked authorisation to make sanitiser. The company had already stopped. Revenue maintained that no decision had been made on its entitlement to relief and that the matter remained under consideration.
Justice Phelan found that the company had not proved the alleged verbal approval. The factual dispute was decided on affidavit evidence, without cross-examination, and the company bore the burden of proof. However, she found that Revenue’s dealings with the company during the health emergency—including not raising concerns about the first application, while the company communicated about sourcing and importing alcohol—gave rise to an implied representation that sanitiser produced under the first application would qualify for relief, subject to DAFM approval and proper accounting.
The court did not itself grant APT relief or determine the company’s eligibility or the quantities covered. It held that Revenue must assess whether the statutory requirements are met, including whether the alcohol was intended for or used to produce sanitiser and was properly accounted for. The declaration applies only to the extent those matters are established to Revenue’s satisfaction.
The court declined the company’s other requested declarations, rejected its claim that Revenue’s failure to decide amounted to a refusal, and found that the challenge to the June direction to stop production was moot. No tax assessment had been made; the court said the relief question remained for Revenue.