High Court dismisses VAT refund appeal where appellant failed to prove group transport contracts.

THE HIGH COURT

IN THE MATTER OF THE CASE STATED

PURSUANT TO SECTION 949AQ OF THE TAXES CONSOLIDATION ACT 1997

AS AMENDED

[2025] IEHC 508

Record No. 2022/164R

BETWEEN

CUMMER COACHES LIMITED

APPELLANT

AND

THE REVENUE COMMISSIONERS

RESPONDENT

JUDGMENT of Mr Justice Liam Kennedy delivered on 20 October 2025.

1. This is an appeal by case stated pursuant to s.949AQ of the Taxes Consolidation Act 1997, as amended (“the TCA”) from a Tax Appeal Commissioner’s (“the Commissioner”) determination dated 20 June 2022 (“the Determination”). The Commissioner rejected the Appellant’s appeal against the refusal of a €1,048,435 claim for the tax years 2016–2019 for repayment of VAT under the Value-Added Tax (Refund of Tax) (Touring Coaches) Order

(2012) (SI 266/2012) (“the SI”). I am asked whether the Commissioner erred; (a) in his approach to the interpretation of s.2 of the SI; (b) in determining that the definition of “qualifying person" in s.2(a) of the SI requires inter alia that the Appellant was engaged under contracts for group transport, and it was not sufficient to demonstrate a single contract for group transport? (c) in law, in finding on the facts that the Appellant was not operating under contracts for group transport (plural) for the purposes of the SI?; and (d) (if it is determined that he erred in respect of whether the Appellant was a "qualifying person" for the purposes of s.2 of the SI and the Appellant is determined to be such a "qualifying person") in determining that the vehicles were "used or intended to be used primarily for the provision of transport services other than transport services consisting of carriage of tourists by road and the contract for group transport" in accordance with s.5 of the SI? For the reasons outlined below, I am largely in agreement with the conclusions reached in the well reasoned Determination and this is reflected in my answers to each question.

Background

2. Unless otherwise indicated, all references to sections will be to the SI, ss.2 & 5 in particular. The Determination turned on the interpretation of the SI which, if applicable and subject to conditions, entitles coach operators to recover VAT paid on the acquisition of new touring coaches. The Appellant operated a bus service on an "interurban express" bus route between Galway and Dublin Airport/Dublin City for a licence holder (“the Licence Holder”), its sister company and unsuccessfully claimed such refunds.

The SI

3. Paragraph 62 of the Determination notes the parties’ agreement that the measure was intended to improve the Irish tourism industry, encouraging the creation of a fleet of highquality coaches. The two crucial SI sections are as follows: a. Section 2 concerns whether the Appellant comes within the scope of the SI. It states in relevant part that "qualifying person" means a person who:

"(a) is engaged in the business of carriage for reward of tourists by road under contracts for group transport…" b. The Appellant also faces a hurdle in s.5, the “disapplication clause” which limits the entitlement to refunds otherwise enjoyed by all qualifying persons, excluding:

“vehicles used, or intended to be used, primarily for the provision of transport services other than transport services consisting of carriage for reward of tourists by road under contract for group transport." With the benefit of oral and written submissions and oral evidence, the Determination concluded that the Appellant was not a “qualifying person" for the purposes of s.2 and that s.5 precluded the claim in any event. The Appellant appeals both rulings.

Material Facts

4. The Commissioner made the following findings of material facts; (a) the Licence Holder held a licence issued by the National Transport Authority (“NTA”) under the Public Transport Regulation Act 2009 to operate a public bus passenger service on route 720 between Galway and Dublin Airport. The licence named the Appellant as a subcontractor; (b) the subcontract required the Appellant to provide the services under the terms and conditions applying to the Licence Holder; (c) there was one contract in being between the Licence Holder and the Appellant at any given point within the time frame. There was no direct contractual relationship between the Appellant and the passengers on the route; (d) the majority of the passengers carried by the Appellant on the route for the relevant period travelled as tourists.

Appellant’s Submissions

5. The Appellant submitted that: a. the issue was whether scheduled or public transport services came within the SI. There were four elements to the s.2 definition of "qualifying person". It required:

(a) carriage for reward; (b) of tourists; (c) by road; (d) under contract for group transport. Each element was established, so it was entitled to refunds under the SI. The Appellant was indisputably engaged in "carriage for reward" and "by road". The majority of passengers were tourists and there was a group contract between the appellant and the licence holder. The disapplication clause, s.5, did not preclude its recovery because the Appellant came within the exception to that clause. The Respondent was effectively introducing an extra test (to exclude public transport services). This was incorrect as a matter of law. b. The Respondent was incorrect in its contention that the "contracts for group transport" requirement should be understood as referring to contracts for the transport of groups of tourists. In this case, individual passengers paid fares to the Licence Holder to travel the route, but the Appellant provided its service under its contract for group transport with the Licence Holder.

c. The Appellant would have had no right to claim refunds under the predecessor of the current s.5 “disapplication clause". Its predecessor clause (s.5 of the Value- Added Tax (Refund of Tax) (No. 28) Order 1996 (SI 98/1996)) stated that "this order shall not apply to vehicles used or intended to be used primarily for the provision of public transport services." However, the significantly amended wording of the current s.5 meant that public transport services were no longer disentitled from seeking refunds; the different wording of the predecessor clause could not inform the interpretation of the SI.

d. The term "primarily" in s.5 meant that the disapplication clause would apply if less than 50% of the passengers were tourists but the relevant limb of the "qualifying person" test would be met if 50% were tourists. In fact, at least 50% of the passengers were tourists, so the disapplication clause did not apply.

Respondent’s Submissions

6. The Respondent submitted that; (a) the instrument was a derogation from the principle that suppliers who did not charge VAT cannot claim VAT credits, deductions or refunds. Derogations must be strictly interpreted; (b) The s.2 definition of “qualifying person” is not a four-pronged test. It is a single phrase with no punctuation to divide it into sections. The Appellant had to show as a whole that it was engaged in the business of carriage for reward of tourists by road under contract for public road transport; (c) Section 5 referred to "contracts of group transport" rather than “a contract”. Therefore, the Appellant must be party to group contracts, plural, for the carriage of tourists. A single contract was insufficient - the definition required the Appellant to be carrying groups of tourists under contract; (d) The Appellant has acknowledged that s.5’s predecessor would have disapplied its entitlement to claim refunds. As a matter of law, s.5 could not have expanded the derogation. Accordingly, if the claim was precluded by the predecessor, it must also be precluded by s.5. (e) In fact, s.5 did not materially depart from the earlier provision - parties were still only entitled to refunds if they were primarily providing transport services for the carriage of tourists under contracts for group transport; (f) There was no basis for the Appellant’s “50% test” (i.e. that the disapplication clause would not apply if at least half of the passengers were tourists). The use of “primarily” in s.5 meant in the first place, or first and foremost. The derogation did not apply if, in the first place, the taxpayer was doing something other than carrying tourists under group transport. In this case it was a subcontractor operating a licensed bus route bringing members of the public from Galway to Dublin Airport. Any carriage of tourists was a secondary aspect of its business;

(g) The changed title of the statutory instrument "Value Added Tax (Refund of Tax) (Touring Coaches) Order 2012” demonstrates the purpose of the SI.

The Authorities

7. The following legislative provisions were engaged in the Determination or in the hearing before me; (a) Directive 2006/112/EC (“the VAT Directive”); (b) Value Added Tax Consolidation Act 2010 (“VATCA”); (c) Public Transport Regulation Act 2009 and (d) Value- Added Tax (Refund of Tax) (Touring Coaches) Order 2012 (SI 266/2012). Repealed domestic secondary legislation was also considered, including a helpful summary of key provisions in the Appellant’s submissions. The earlier provisions included: (a) Value-Added Tax (Refund of Tax) (No. 19) Order, 1986 (SI 68/1986); (b) Value Added Tax (Refund of Tax) (No. 26) Order, 1994 (SI 165/1994); (c) Value-Added Tax (Refund of Tax) (No. 28) Order, 1996 (SI 98/1996)

8. Other relevant provisions cited included:

a. Article 371 of the VAT Directive which provides that

"member states which, at 1 January 1978, exempted the transactions listed in annex X, part B, may continue to exempt those transactions in accordance with the conditions applying in the member state concerned on that date." b. The exemptions by derogation under article 371 listed in Part 2 of Schedule 1 of the VATCA include "14(3) transporting passengers and their accompanying baggage." (In 1978, the corresponding exemption appeared in the VAT Act 1972).

c. Article 110 of the VAT Directive provides that

"member states which, at 1 January 1991, were granting exemptions with deductibility of the VAT paid at the preceding stage or applying reduced rates lower than the minimum laid down in article 99 may continue to grant exemptions or apply those reduced rates. The exemptions and reduced rates referred to in the first paragraph must be in accordance with community law and must have been adopted for clearly defined social reasons and for the benefit of the final consumer." d. Section 2 of the Public Transport Regulation Act 2009 provides inter alia that "public bus passenger service" means “the use of a bus or buses travelling wholly or mainly on public road for the carriage of passengers in such a manner that-

(a) Each journey is open to use by members of the public,

(b) a charge or charges are paid in respect of each passenger, and

(c) save where the authority otherwise determines,

(i) the service is provided on a regular and scheduled basis, and

(ii) carriage is provided for passengers between specified

terminal points or along a specified route or otherwise in

accordance with a published timetable..." e. The following provisions of the Interpretation Act 2005 are particularly relevant: i. Section 4(1) provides that the Act "applies to an enactment except insofar as a contrary intention appears…”

ii. Section 5 provides that:

“(1) in construing a provision of any Act (other than a provision that relates to the imposition of a penal or other sanction)-

(a) that is obscure or ambiguous, or

(b) that on literal interpretation would be absurd or would fail

to reflect the plain intention of-

(i) in the case of an Act to which paragraph (a) of the

definition of ‘Act’ in section 2(1) relates, the

Oireachtas, or

(ii) in the case of an Act to which paragraph (b) of that

definition relates, the parliament concerned,

the provision shall be given a construction that reflects the plain intention of the Oireachtas or parliament concerned, as the case may be, where that intention can be ascertained from the Act as a whole.

(2) In construing a provision of a statutory instrument (other than a provision that related to the imposition of a penal or other sanction)

(a) that is obscure or ambiguous, or

(b) that on a literal interpretation would be absurd or would fail to reflect the plain intention of the instruments as a whole in the context of the enactment (including the Act) under which it was made. the provision shall be given a construction that reflects the plain intention of the maker of the instrument where that intention can be ascertained from the instrument as a whole in the context of that enactment.” iii. Section 18(a) provides in relation to the construction of enactments (which includes statutory instruments) that words importing the singular shall be read as also importing the plural, and words importing the plural should be read as also importing the singular. iv. An enactment’s short title of can be used for the interpretation of an ambiguous enactment but, as Dodd on Statutory Interpretation (2008, Bloomsbury) observes at para 3.02, in itself, an Act’s short tile of is afforded little interpretive weight. For example, in Quilligan, Griffin J declined to use the long and short titles to aid interpretation where the enactment was clear and unambiguous. Accordingly, recourse to the long and short titles is only permissible in cases of ambiguity. The Interpretation Act 2005 confirms that approach. Section 5 (set out above) essentially provides that in construing provisions of an Act or Statutory Instrument that is ambiguous, or would be absurd on a literal interpretation, then the Court should favour the construction which reflects the plain intention of the Oireachtas. Section 7 supplements this by saying that when the court is engaging with s.5 or s.6 (which allows for an evolutive approach to interpretation in so far as the text, purpose and context permits), it may “make use of all matters that accompany and are set out in- (a) In the case of an Act of the Oireachtas, the signed text of such law ...”

9. Section 11(1) Public Transport Regulation Act 2009 states: “The Authority may decide prior to the grant of any licence, or of licences in respect of particular categories of public bus passenger services, to make an offer to the applicant setting out—

(a) the details of the public bus passenger service in respect of which it is proposed to grant the licence,

(b) the conditions under section 13 that it is proposed to apply to the operation of the public bus passenger service,

(c) the documents and other information that must be submitted by the applicant prior to the grant of the licence,

(d) the fee determined under section 12 that must be paid prior to the grant of the licence, and

(e) the period within which the applicant must respond in writing to the making of the offer indicating acceptance of that offer.”

10. The following cases were opened at the hearing and/or referenced in the Determination:

• Bookfinders Ltd v Revenue Commissioners [2020] IESC 60

• Commission v France (Case C-384/01)

• Commission v Spain (Case C-360/11)

• Crilly v T&J Farrington Ltd [2001] 3 IR 251

• Doorley v Revenue Commissioners [1933] IR 750

• Dunnes Stores v Revenue Commissioners [2019] IESC 50; [2020] 3 IR 480

• Heather Hill Management Company CLG v An Bord Pleanála [2022] IESC 43;

[2022] 2 ILRM 313

• Menolly Homes Ltd v Appeal Commissioners [2010] IEHC 49 (“Menolly Homes”)

• Minister for Justice and Equality v Vilkas [2018] IESC 69; [2020] 1 IR 676

• National Irish Bank Ltd v Graham [1994] 2 ILRM 109 (“Graham”)

• Norbury Developments v Commissioners of Customs & Excise (C-136/97)

• The People (DPP) v. AC [2021] IESC 74, [2021] 2 ILRM 305

• The People (DPP) v Quilligan [1986] IR 495

• Perrigo Pharma International Activity Company v McNamara [2020] IEHC

552 (“Perrigo”)

• Renehan v T&S Taverns Ltd (t/a Red Cow Inn) [2015] IESC 8; [2015] 3 IR 149

• Revenue Commissioners v Doorley [1933] IR 50

• Talacre Beach Caravan Sales (C-251/05)

11. MacDonald J comprehensively summarised the principles of statutory interpretation at para. 74 of his judgment in Perrigo: “The principles to be applied in interpreting any statutory provision are well settled. They were described in some detail by McKechnie J. in the Supreme Court in Dunnes Stores v. The Revenue Commissioners [2019] IESC 50 at paras. 63 to 72 and were reaffirmed recently in Bookfinders Ltd v. The Revenue Commissioner [2020] IESC 60. Based on the judgment of McKechnie J., the relevant principles can be summarised as follows:

40 (a) If the words of the statutory provision are plain and their meaning is self-evident, then, save for compelling reasons to be found within the Act as a whole, the ordinary, basic and natural meaning of the words should prevail;

(b) Nonetheless, even with this approach, the meaning of the words used in the statutory provision must be seen in context. McKechnie J. (at para. 63) said that: “… context is critical: both immediate and proximate, certainly within the Act as a whole, but in some circumstances perhaps even further than that”;

(c) Where the meaning is not clear but is imprecise or ambiguous, further rules of construction come into play. In such circumstances, a purposive interpretation is permissible;

(d) Whatever approach is taken, each word or phrase used in the statute should be given a meaning as it is presumed that the Oireachtas did not intend to use surplusage or to use words or phrases without meaning.

(e) In the case of taxation statutes, if there is ambiguity in a statutory provision, the word should be construed strictly so as to prevent a fresh imposition of liability from being created unfairly by the use of oblique or slack language;

(f) Nonetheless, even in the case of a taxation statute, if a literal interpretation of the provision would lead to an absurdity (in the sense of failing to reflect what otherwise is the true intention of the legislature apparent from the Act as a whole) then a literal interpretation will be rejected.

(g) Although the issue did not arise in Dunnes Stores v. The Revenue Commissioners, there is one further principle which must be borne in mind in the context of taxation statute. That relates to provisions which provide for relief or exemption from taxation. This was addressed by the Supreme Court in Revenue Commissioners v. Doorley [1933] I.R. 750 where Kennedy C.J. said at p. 766: 41 “Now the exemption from tax, with which we are immediately concerned, is governed by the same considerations. If it is clear that a tax is imposed by the Act under consideration, then exemption from that tax must be given expressly and in clear and unambiguous terms, within the letter of the statute as interpreted with the assistance of the ordinary canons for the interpretation of statutes. This arises from the nature of the subject-matter under consideration and is complementary to what I have already said in its regard. The Court is not, by greater indulgence in delimiting the area of exemptions, to enlarge their operation beyond what the statute, clearly and without doubt and in express terms, excepts for some good reason from the burden of a tax thereby imposed generally on that description of subject-matter. As the imposition of, so the exemption from, the tax must be brought within the letter of the taxing Act as interpreted by the established canons of construction so far as possible”.

The Determination

12. The Commissioner determined that: a. The appeal essentially failed under both sections. The Appellant was not a qualifying person for the purposes of s.2; s.5 would disapply its claim in any event. b. In the absence of punctuation, s.2(a) should be read as a whole not as four separate limbs. It was still necessary to apply its elements to the facts; (i) the majority of the passengers travelling using the route 720 for 2017 - 2019 travelled as tourists. There was no evidence in respect of 2016; (ii) There were three sequential contracts between the Appellant and the Licence Holder over the years but for any given period, the Appellant operated under one contract only. c. The s.2 "contracts for group transport" requirement had remained constant since the predecessor provision was introduced in 1986 - it was necessary to show contracts (plural) to meet the “qualifying person” definition. d. While noting that the case relied upon, Graham, concerned a different statutory context, he preferred the Respondent’s interpretation of "primarily" and concluded that the Appellant was primarily engaged in the provision of the licensed public passenger service between Galway and Dublin/Dublin Airport. Consequently, its vehicles were not primarily used for the provision of "transport services consisting of carriage for the reward of tourists by road under contracts for group transport". e. He rejected the submission that the removal of the 1996 provision’s reference to provision of public transport systems meant that such services came within the SI. The SI broadened the disapplication, thus narrowing the scope of the derogation.

Analysis

13. At the outset, I will note certain preliminary observations: a. It is clear (see Mennolly Homes) that the taxpayer bears the burden of proof. b. The Determination and the submissions helpfully summarised principles but they, and particularly the helpful summary in Perrigo set out at para. 11 above, inform my analysis. c. The construction of the SI and its components is complicated by interlocking exceptions which override each other. The SI itself is a derogation or exception from the basic principle (enshrined in the VAT Directive) that parties can generally only claim input credit for the VAT they have paid if they themselves charge their customers VAT. Section 5, the disapplication clause, is an exception to that basic exception in the SI – the result of that “double negative” is that the default position (no refunds) would apply to parties subject to that clause. However, to further complicate matters, the disapplication clause contains its own inbuilt exception, a triple negative, “disapplying the disapplication” but only in respect of vehicles primarily used for the transport of tourists by group contracts, ensuring that the latter, and only the latter, retain their s.2 eligibility for refunds despite s.5.

d. Although the oral and written submissions in the High Court focused on particular phrases within ss.2 & 5, I consider that the meaning of the paragraphs emerges when the SI is read holistically, as it should be; in particular the two paragraphs complement each other in identifying the circumstances in which exempt status should be accorded. The meaning of each paragraph is clear when read in context. e. The Respondent complained that the Appellant’s submissions went beyond the Determination’s factual findings. Its references to the evolution of the Irish public transport sector since 1996 seemed uncontroversial. It can scarcely be doubted that private operators now undertake a significant role in the provision of Irish public transport than at the time of the 1996 SI. However, I do not consider that that greatly assists the Appellant’s efforts to establish an entitlement to a refund. (It was not suggested that there was any basis to invoke s.6 of the Interpretation Act).

Was the Appellant engaged in the business of carriage for reward of tourists by road under contracts for group transport within the meaning of para 2?

14. I agree with the Commissioner’s observation that the critical elements (which go to both ss.2 & 5) are whether the appellant was carrying "tourists" and operating under "contracts for group transport". As to the meaning of “tourists” in the SI, I am not entierly persuaded that the meaning of “tourist” for the purposes of the SI is as broad as the Determination concluded. It could not be assumed that all those embarking or disembarking at the airport were necessarily tourists. Individuals visit the airport for many reasons – as incoming or outgoing tourists, commuters or others travelling for educational, professional or personal reasons. (such as, for example, to obtain medical treatment).

Recent decades have witnessed exponential growth in the numbers of Irish residents employed by multinationals who regularly visit other jurisdictions in the course of their work. Any passenger on a Monday morning "red eye" flight to London and other major cities will observe the hordes of business travellers going in both directions – commuters, employees of multinationals (and, indeed, indigenous companies), Irish executives or salespeople visiting customers or potential customers in other jurisdictions (or vice versa in terms of business traffic into Ireland).

It is also difficult to reconcile the broad definition of “tourist” with the parties’ agreement that the measure was intended to improve the Irish tourism industry. In that context and given the history of the SI, the term seems more likely to have been directed to recreational travellers in Ireland, whether visitors from abroad or Irish residents on holiday within Ireland, including short leisure excursions (such as the Galway visitors to Dublin Zoo example in the Determination). However, while Irish residents quitting these shores may become tourists from their destination’s perspective, it is harder to describe them as tourists in Ireland and an even greater stretch to describe “tourists” as encompassing foreign students studying in Ireland or business travellers.

While people travelling for leisure may generally be tourists, I am not convinced that the term “tourist” as used in the SI is necessarily intended to encompass all visitors travelling outside their usual environment for any purpose, including business, family or any other personal reasons, other than to be employed by a resident entity in the place visited. I am sceptical of the suggestion that the term would incorporate individuals travelling other than for the purposes of rest and recreation and for seeing the sights in Ireland. Nor do I consider that the EU regulation cited by the Determination (Regulation (EU) No. 692/2011), which appears to be directed towards capturing data EU wide for comparison purposes, assists in informing the meaning ascribed to “tourist” in the very different context of the SI and its predecessors.

It would be different if the term had been used in the VAT Directive.

15. My concern that “tourist” has a narrower meaning in the SI than appears to be reflected in the Determination goes to the validity of the inference that most passengers travelling to or from the airport were tourists within the meaning of the SI. However, even leaving aside my reservations on that important point, I consider that the appellant falls outside the s.2 definitions of “qualifying person” for two reasons – the “group contracts” point emphasised in the Determination and also for a more fundamental reason as to the nature of the Appellant’s business. I will deal with the latter point first.

16. In understanding the nature of the Appellant’s business, it is necessary to consider the terms of the licence in its statutory context under the Public Transport Regulation Act 2009. The object of such public transport licences is to improve public transport links within Ireland - including traffic between cities and accessing the State's principal airport. The objective includes, but is not limited to, the needs of the tourism industry – such services are required for many purposes, including economic, business and recreational. The licence was designed to facilitate travel between Galway and Dublin/Dublin airport. While the NTA doubtless expected the service to facilitate incoming tourists, it also presumably intended it to be used by Irish residents travelling between Galway and Dublin/Dublin airport for business or any other purposes. Ireland is an open economy, traditionally benefitting from foreign investment which generates economic activity, employment and tax revenue. In those circumstances, public transport access from major cities to the largest international airport is clearly strategic for economic and employment as well as recreational and tourism purposes. Accordingly, from the regulatory perspective (which underpins the licence) providing high quality public transport services goes beyond the needs of the tourism industry. The purpose of the licence subcontracted to the appellant was clear – to facilitate the general public. While any such service benefits tourists, serving the tourism industry cannot be described as its primary purpose. It is intended to serve all comers - tourists, commuters or those travelling for other reasons.

17. Nonetheless it was predictable that many, perhaps most, customers availing of the service might well be tourists (even if a narrower definition is employed). However, there is no evidence that the split between tourists and other commuters mattered to the licence holder, let alone the appellant. Presumably, it was the total number of occupied seats which mattered to the licence holder. The proportion of tourists mattered even less to the appellant. It was paid the same, irrespective of the number of customers and also irrespective of the numbers of tourists. The split between tourists and consumers was incidental to the primary purpose of the provision of the service by the appellant to the licence holder and by the latter to all customers availing of its service, including any tourists.

18. The licence holder is authorised to operate an “interurban express" bus route between Galway and Dublin/Dublin airport. That is the service’s primary objective, to offer an interurban express bus route to public (without discriminating between tourists and other travellers). The Appellant's responsibility and function was to support the Licence Holder by operating the route in accordance with the licence. In terms of s.2 (and even leaving aside the “group contracts” point) it is difficult to describe the Appellant as being engaged in the business of carriage for reward of tourists by road under contracts for group transport. It seems to me that even if, as may perhaps have been the case, many of its passengers at particular times of the years might be overseas students studying in Ireland (less likely to have their own cars), that would not mean that one would describe the Appellant as being engaged in the business of carriage of students for reward. Likewise, although there was no evidence about the demographics of the customer base, it would not be surprising if the age distribution of its customer base showed disproportionate numbers of younger or older passengers (either because of lack of access to their own car or because of the ability to avail of free transport) but even if that was so, it would still not be appropriate in my view to describe the Appellant as being engaged in the business of transporting young people or, as the case may be, older people. It was transporting the general public and that is the way its business must be understood for the purposes of s.2 even if many, perhaps most of its passengers generally happened to be tourists (or young people etc.). In any event, the Appellant’s only customer was its sister company, the Licence Holder, and its only obligation was to meet the latter’s commitments under the licence, reinforcing the conclusion that it was engaged in the business of operating a licensed bus route (used by the general public, including tourists) on the Licence Holder’s behalf.

19. In the course of his comprehensive and well-argued submissions, counsel for the Appellant necessarily acknowledged that the Appellant was operating the route for the benefit of all comers, not just tourists, but submitted that serving the public and serving the business were not mutually exclusive. There was nothing in s.2 to say that a business such as the Appellant couldn’t be deemed to be in the “business of the carriage of tourists by road for reward” if they also carried members of the public. I agree that there is no express wording in para. 2 to say that such businesses must be devoted exclusively (or even mainly) to tourists, but it seems to me that the plain meaning of the italicised expression, read in the context of the SI as a whole, would not encompass a licensed public bus route even if a majority of its customers happened to be tourists.

20. For the reasons identified by the Determination but also for the other reasons outlined above, I agree that the Appellant was not a qualifying person as defined by s.2. In my view, its business must be understood for the purposes of the SI as being the provision of a public bus passenger service on the Licence Holder’s behalf, transporting members of the public between Galway and Dublin/Dublin Airport on a regular and scheduled basis, along a specified route and in accordance with the published timetable, as required by the route licence and I do not consider that the Determination’s findings of primary fact would justify a conclusion that the Appellant was engaged in the “business of the carriage of tourists by road for reward” for the purposes of the SI, just because many of its customers happened to be tourists. That was not the nature of the appellant’s business, let alone its primary purpose (to use the phrase employed in s.5). The business involved transporting members of the public between Galway and Dublin/Dublin Airport on the licence holder’s behalf and in accordance with the public bus passenger service licence.

21. It is irrelevant that many “tourists” availed of the Appellant’s service. Many facilities serve the public at large while being disproportionately patronised by certain segments of the public. Public houses near a campus or a sports stadium might colloquially but inaccurately be described as student, rugby, or GAA pubs. However, they cater to the general public; the fact that a high proportion of particular segments of the public might avail of their services at particular times is incidental. Such establishments’ primary function is to serve the public not just specific segments. The fact that certain groups may avail of services to a disproportionate extent (or that the business might target such customers) does not change its broader remit.

22. I am satisfied that the Appellant did not discharge the onus of establishing that it is a “qualifying person”: a. The lawyer’s favourite sport – microscopically parsing provisions in far greater detail than their authors may ever have imagined – sometimes risks losing sight of the wood for the trees. Such a process of reverse engineering to constituent elements can sometimes produce a result which is different to the meaning achieved by the sum of its parts. In my view, expanding the short s.2 definition into a four-pronged test would complicate and actually obscure the meaning of the passage as a whole.

When read in its totality, and particularly when ss.2 & 5 and, indeed the entire SI, are read holistically as they should be, the definition’s meaning is plain and is to be applied by consideration of the application of the phrase as a whole rather than breaking it into a four-stage test. I accept that if the s.2 definition was microscopically dissected then the Appellant would arguably fall within the fourpronged analysis, but I do not consider that that is the correct approach to understanding what is meant by the crucial phrase in s.2 - "engaged in the business of carriage for reward of tourists by road under contracts for group transport".

It seems to me that, particularly in view of the terms of s.5 and the SI as a whole, the phrase was intended to refer to the taxpayer’s primary business, which was not limited to tourists and to contracts for group transport of tourists in particular, and there is no indication in the SI that it was sufficient if the “business” referenced in para. 2 included some, or even a majority of, tourists among its passenger base or that there was single group contract, albeit one which related to the operation of a public licensed bus route and which did not pertain to tourists per se. b.

I agree with the Appeal Commissioner that the Appellant was also excluded from the s.2 definition by virtue of the “group contract” requirement. As for the reference to contracts, the Interpretation Act 2005 refers to words denoting the singular encapsulating the plural and vice versa. The rule is more frequently invoked to interpret singular terms in contracts or legislation as encapsulating the plural, but the principle operates both ways – plurals can encompass the singular. However, the principle is not universally applicable. Section 4 stipulates that the Interpretation Act’s principles apply "except insofar as the contrary intention appears".

I am not convinced by the Appellant’s submission (for which no authority was cited) that any such contrary intention must appear from the express language of the enactment; it seems to me that such a contrary intention may be apparent whether or not stated expressly – it depends on the plain reading of the enactment. When reading the SI in its totality, such a contrary intention (to the plural encompassing the singular) does indeed appear in this case because, contrary to the way enactments generally tend to be drafted, the emphatic repetition of the plural (five times) in the SI is unusual from a drafting perspective.

That, together with the context, history and purpose of the SI tends to suggest an intention to limit the exemption to parties engaged in multiple contracts for the carriage of tourists, rather than one off transactions which are not specifically linked to the carriage of tourists and only incidentally encompass their carriage. I doubt that the authors of the SI would have used the wording in s.5 if they had intended to encompass "a contract or contracts". A further difficulty facing the appellant in terms of the s.2 definition is the fact that its only contract did not concern or reference tourists (it had no business doing so) but rather the Appellant’s commitment to operate the route in accordance with the applicable statutory and contractual licence conditions. c.

Furthermore, if the Appellant’s contract with the Licence Holder is regarded as a contract for group transport then it would have the odd result that the intercompany arrangement would entitle the Appellant to seek the refund by means, whereas the Licence Holder itself could not have done so if it operated the route directly, either as a sole trader or as a standalone company. There would be no group contract in that scenario. It would be peculiar if such a form over substance corporate structure could give rise to a refund entitlement on the Appellant’s part which would be greater than the Licence Holder’s own entitlement - it is difficult to see why this would have been the Minister’s intention when the provision was drafted.

Were the Appellant’s vehicles used, or intended to be used, primarily for transport services consisting of carriage for reward of tourists by road under contracts for group transport?

23. In any event, the Appellant’s claim to a refund is also precluded by s.5, the disapplication clause, and it is not saved by the exception to that clause:

a. Paragraph 15 of the Determination noted the parties’ agreement that derogations must be strictly interpreted. A taxpayer must come within the SI’s wording. However, while acknowledging, citing case C – 83/99 Commission v Spain, the Court of Justice’s determination that "provisions which are the nature of exceptions to a principle must be interpreted strictly" and "in accordance with the usual meaning of those words" the Appellant observed that the reference to the strict interpretation of exceptions was not an instruction to read them narrowly but rather a warning against going beyond the words’ ordinary, usual, meaning. b. If the 2012 Regulation and its predecessor had been primary legislation, with no EU law dimension, I may have been more attracted by the Appellant's interpretation or para. 5. However, its construction would narrow the impact of the disapplication clause (and thus extend the derogation) as compared to its predecessor. I accept the Respondent’s submissions that the general principle of the VAT Directive, is that parties can only reclaim VAT when charging VAT on their own goods and services and that the legislative history demonstrates that the derogation has been restricted rather than expanded upon and the SI must be read in that light. Although article

371 of the VAT Directive allows the State to maintain exceptions to that principle (subject to certain conditions) which were in place when it came into effect, such derogations cannot be extended as envisaged by the Appellant’s interpretation. c. To the extent that two interpretations are possible, I must adopt the interpretation consistent with EU law. The SI cannot extend the right to recover VAT beyond the circumstances which applied when the VAT Directive came into force. The Minister would not (and could not) have introduced regulations to that effect. I must interpret the regulation in a manner consistent with the Directive.

d. Nor do I see any basis in the wording of the SI for the Appellant proposed 50% test. I agree with the Commissioner’s conclusion that the “50% test" is not the correct way to interpret whether the disapplication cause applies - there is no basis for that test in para. 5 and no authority was identified support the conclusion that "primarily" should be interpreted in that way – the Appellant appeared to be using the test adopted to determining the dominant purpose for the creation of documents in a discovery context, an entirely context. e. The Commissioner’s adoption of the Oxford English dictionary definition of “primarily” appears reasonable - "to a greater or the greatest degree; for the most part mainly”. While acknowledging the different statutory context, the Commissioner also noted that that definition aligns with the definition suggested by Graham. That case may not be particularly relevant here, it concerned a different context - family homes - but more importantly, the way the word "primarily" was used differently to its current context. However, I agree that the meaning ascribed to the term by the Commissioner is in keeping with its ordinary and natural usage. f. I disagree with the Appellant’s attempt to distinguish between the nature of the business and the usage of the vehicles, and I agree with the Commissioner’s

conclusion that the vehicles were not primarily used for the provision of transport services consisting of carriage for reward of tourists by road under contract for group transport. As noted above in the context of s.2, the Appellant’s business required it to operate a public bus passenger service for the licence holder in accordance with the licence. That was its primary purpose and the primary purpose of its fleet. The appellant and the licence holder were legally and commercially committed to provide a public bus passenger service as defined by s.2 of the Public Transport Regulation Act 2009. Such commitments appear inconsistent with its submission that its service was "used or intended to be used primarily for the provision of transport services other than transport services consisting of carriage of tourists by road and the contract for group transport". g. I also agree with the finding at para. 19 of the Determination that the change in the wording of the disapplication clause between the 1996 and 2012 iterations did not mean that vehicles used "primarily for the provision of public transport services" were brought within the scope of the SI. As the Determination notes, it is necessary to apply ss. 2 & 5 to the particular facts and in this case the vehicles were used primarily for the provision of transport services other than “transport services consisting of carriage for tourists by road under contract”, so the Appellant is not entitled to refunds under the SI. I also agree that the intended effect of the 2012 changes to the SI was to narrow the derogation (by broadening the scope of the disapplication clause). The predecessor only excluded vehicles primarily used for public transport services, whereas the SI excluded all vehicles other than vehicles primarily used for the carriage of tourists by road under contract for group transport.

Conclusion

24. I broadly agree with the statements of principle as to statutory interpretation cited in the determination and by the parties, but it seems to me that this case can be resolved without going beyond s.5 of the Interpretation Act 2005. The construction that reflects the plain intention of the maker of the instrument can be ascertained from a holistic reading of the SI and I do not consider that the provision is obscure, ambiguous or absurd or that the obvious interpretation would fail to reflect the plain intention of the SI as a whole. When interpreting a contract or, even more importantly, an enactment, it is important to understand the document as a whole. It is appropriate to have regard to the terms of both ss.2 and 5 and, indeed, the entire SI, when considering the meaning of the two paragraphs and that when the regulation is read is in its entirety, the meaning of the provision is plain. The Appellant is not a qualified person for the purposes of s.2 as it is not engaged in the business of carriage for reward of tourists and because it does not operate under contracts for group transport. In any event, the disapplication provision would also prevent the Appellant’s reliance on the statutory instrument. My

conclusion reflects the plain meaning of the provision. It is not necessary to adopt a purposive interpretation, but I would have reached the same conclusion if such an interpretation had been required, particularly bearing in mind the title of the SI.

25. In the circumstances, while my reasoning is not absolutely identical, I agree with the Commissioner; (a) that the Appellant is not a qualifying person within s.2 even if most of its customers happened to be tourists in practice; (b) that it was not sufficient for the Appellant to demonstrate a single contract for group transport - the s.2 definition of “qualifying person" requires contracts, plural and I do not think this was intended to denote the singular on this occasion; (c) that the Appellant was not operating under contracts for group transport (plural) for the purposes of the SI; (d) that if, contrary to the Commissioner’s (and my own) conclusions, the Appellant was in fact a "qualifying person", s.5 would still disentitle it from claiming a refund because the vehicles were "used or intended to be used primarily for the provision of transport services other than transport services consisting of carriage of tourists by road and the contract for group transport".

26. I will dismiss the appeal and will list the proceedings for final orders at the start of the new term on 29 October at 10.00am.

APPEARANCES

Mr. Noel Travers SC, instructed by Kilfeather & Co. Solicitors, for the Appellant.

Mr. Conor Bourke SC, instructed by the Revenue Solicitor, for the Respondent.