The Court of Appeal dismissed Cormac Lohan’s appeal against a High Court determination that he was liable for €144,788.50 in Revenue penalties relating to incorrect VAT returns. The appeal focused on whether the evidence in Revenue’s affidavit and exhibits was sufficient to support penalties based on negligent or deliberate returns.
Revenue’s grounding affidavit said Lohan’s VAT returns for 2003 to 2007 were considered negligent, and returns for 2008 to 2010 deliberate. It put the tax differences at €47,254, €42,752 and €54,657.50 respectively, and sought penalties equal to 100% of those amounts. The affidavit described an audit process, discrepancies between VAT returns and sales figures in accounts, and unsuccessful efforts to obtain records or a voluntary disclosure. It also said the assessments had not been formally appealed and had become final and conclusive.
The Court of Appeal noted that no replying affidavit was properly before the High Court. An affidavit offered during the hearing did not substantively contradict Revenue’s account of the alleged negligent or deliberate returns, the judgment said. Lohan also did not request cross-examination of the Revenue deponent about the basis for the opinion.
Revenue’s opinion alone could not decide the application, the court said. But the affidavit also set out the background and referred to supporting exhibits. The High Court judge could consider that material, the final and conclusive assessments, and the absence of a response to the penalty notices. The Court of Appeal concluded there was ample evidence for the High Court’s determination.
The appeal court therefore left the High Court’s penalty determination in place and dismissed the appeal. It noted that the order for recovery of the penalties was consequential on the liability determination and was not separately challenged.