The High Court has ordered disclosure of specified bank records and account information in a Revenue investigation, rejecting a taxpayer’s argument that the matter had already been settled by a €278,000 cheque.
In a judgment delivered on 18 April 2008, Miss Justice Laffoy found that the cheque had not been accepted in full and final settlement of the taxpayer’s liabilities. The court concluded that the undisputed facts showed no “meeting of minds” that accepting and receiving value for the cheque would end the Revenue review.
The application was brought by an inspector of taxes under section 908 of the Taxes Consolidation Act 1997, with the written consent of a Revenue Commissioner. The inspector sought orders against various banks for inspection of specified books and records, and for information and explanations relating to accounts held by the respondent. The court said the statutory preconditions for the application had been met.
The inquiry followed a voluntary disclosure made on the respondent’s behalf in November 2001 concerning so-called bogus non-resident accounts and his participation in the 1993 amnesty. The respondent had paid €25,779.49 with the disclosure and a further €83,000 in October 2003. At a meeting on 8 September 2004, his accountant proposed a total liability of €400,000, said €122,000 had already been paid, and handed over a cheque for the €278,000 balance.
The respondent and his accountant said they understood the cheque was tendered in full and final settlement, subject to approval by a Revenue superior. The inspector’s account, supported in material respects by the accountant, was that he made clear he could not approve a settlement and that the proposal required referral. The next day, the District Manager said he could not consider it without detailed computations. The accountant later sent calculations and asked Revenue to confirm the matter was closed.
The court held that the request for computations showed the District Manager wanted to assess whether settlement at the proposed amount was appropriate; it did not mean the settlement would automatically take effect once calculations were supplied. Considering the meeting and subsequent communications objectively, the court found the respondent and his advisers could not have concluded that Revenue had accepted the cheque in full settlement. The fact that the cheque was presented for payment did not change that conclusion.
Justice Laffoy also considered whether the respondent had suffered prejudice because he was not given an opportunity to withdraw the cheque. She found little substance in that argument, noting the respondent’s evidence that the amount represented what he owed “more or less” and that interest would otherwise have continued to run.
The court granted the orders sought under section 908. The judgment does not set out the banks’ names or the specific records and information covered by the orders.