The High Court has set aside an order allowing Revenue to amend a tax recovery claim against Malachy Grehan, finding that the amendment would prejudice his ability to pursue a late appeal against the assessments.
The dispute concerns a summary summons issued by Michael Gladney on 21 March 2014, seeking unpaid income tax and interest for 2005 to 2010. The summons said the claimed sums were based on tax returns made by Grehan. The judgment states that Grehan had not lodged those returns; the claim was based on assessments raised by his Inspector of Taxes in November 2012.
In June 2015, the High Court, on an application made without notice to Grehan, allowed Revenue to replace “return” with “assessment” in six places in the claim particulars. Grehan applied to set that order aside, arguing that material information had not been disclosed and that the change prejudiced him. Revenue disputed that there had been material non-disclosure or prejudice. The court did not decide those other issues.
The central question was the effect of section 993(9)(a) of the Taxes Consolidation Act 2007. That provision restricts access to the statutory appeal process, including a late appeal, while an action to recover tax charged by an assessment remains ongoing.
Revenue argued that issuing the summons was enough to make the proceedings an action to recover tax charged by assessment, regardless of the wording originally used. Grehan argued that the summons had to identify assessments as the basis of the claim. The judge accepted Grehan’s interpretation. He found the original particulars did not identify the correct legal basis and were unlikely to support recovery of the taxes as issued. Correcting them would change the nature of the proceedings and prevent a late appeal while they continued.
The court set aside the June 2015 amendment order. Revenue may continue the proceedings on the original basis, described in the judgment as a claim based on returns, but those proceedings do not currently bar Grehan from lodging a late appeal until they are completed. The judge made no finding on whether the tax is owed, whether a late appeal will succeed, or whether Revenue may obtain final judgment. He also said Grehan must now act promptly in relation to his revenue affairs.