Taxpayer appeal to Circuit Court barred until final liability and tax amount determined by Appeal Commissioners.

An Chúirt Uachtarach

The Supreme Court

Clarke J

Dunne J

Charleton J

Record number: 2009/1254JR

Appeal number: 2010/273

[2016] IESC

Between

Brendan O’Rourke

Applicant/Appellant

and

The Appeal Commissioners

Respondent

and

The Revenue Commissioners

Notice Party

Judgment of Mr Justice Charleton delivered on Thursday the 2nd day of June 2016

1. This appeal centres on the proper construction of the rights of appeal by a taxpayer from a decision of the Appeal Commissioners.

In particular, the issue is raised as to whether a taxpayer may appeal a ruling which establishes liability to pay tax, but in

circumstances where the amount to be paid is yet to be determined. Here the question for this Court may be put thus: is an appeal

to the Circuit Court open to a taxpayer after a ruling by the Appeal Commissioners that in principle the taxpayer is liable to pay tax on

income during a particular year, consequent on a ruling of failure of complete disclosure by the taxpayer, but where the determination

of the quantum of tax due is not yet made?

Construction

2. In raising this issue, both the appellant taxpayer, Brendan O’Rourke, and the notice party, the Revenue Commissioners, the

effective respondent on the appeal, the Appeal Commissioners not having participated at any stage of this judicial review,, have

urged reference to various sections of the Taxes Consolidation Act 1997. These are of both direct and peripheral relevance. Both

sides have also asserted the applicability of various canons of statutory construction. Reference has been made to the need for a

purposive construction on the part of the taxpayer whereas the Revenue Commissioners have argued for the need to avoid anomalous

consequences in the interpretation of the relevant legislation. As the hearing proceeded it became apparent that no such resort was

necessary in this analysis. Instead, it is appropriate to restate that a statute is to be construed according to its plain meaning and

that such emerges from the text of the relevant provision, considered within its proper context. In another decision of this Court on

the entitlement of taxpayers to appeal an assessment to taxation, Keogh v Criminal Assets Bureau [2004] 2 IR 159 at 170, Keane CJ

stated the applicable rule of statutory construction thus:

In construing the relevant provisions of the 1997 Act, the duty of the court is, as stated by Lord Russell of Killowen C.J.

in Attorney General v. Carlton Bank [1899] 2 Q.B. 158, at p. 164:-

“to give effect to the intention of the legislature as that intention is to be gathered from the language employed, having

regard to the context in connection with which it is employed.”

a assage which was cited with approval at pp. 763 to 764 by Kennedy C.J. speaking for the Supreme Court of Saorstat

Éireann in Revenue Commissioners v.Doorley [1933] I.R. 750.

It is true that, as pointed out in that and other authorities, where the court is considering whether a particular person is

subject to a tax claimed to have been imposed by a statute, its sole task is to determine whether, having regard to the

language used, the tax has been expressly imposed; the court cannot have regard, as might be possible in other

contexts, to what might be assumed to be the intention or governing purpose of the Act, other than an intention to levy

such tax as the statute imposes. We are here concerned with provisions in the Taxes Consolidation Act 1997 Act which

do not impose any tax but set out the machinery by which the taxpayer is to be assessed and the appropriate tax

recovered and in construing those provisions the court must apply the normal principles of construction to which I have

already referred.

3. Consequently, the task of a court is one of analysis only. It is not the substitution of a court’s own views as to what provision

ought to be made regarding taxation or exemption from liability; McGrath v McDermott [1988] IR 258. The basic and ordinary rules of

statutory construction apply in determining the meaning of any taxation statute, which are to give each section its ordinary meaning

within its relevant context and to consider exemptions from taxation, against the backdrop of the ordinarily applicable liability, with a

view to analysing if that exception applies; Revenue Commissioners v Doorley [1933] IR 750 and Harris v Quigley [2006] 1 IR 165.

4. Here, the relevant section requiring analysis is s. 955 of the Act of 1997. This section gives an inspector of taxes the entitlement

to raise an assessment and sets a time limit for that once the taxpayer has submitted an apparently valid income tax return. The

temporal limitation on this power is coupled with an exception extending the time for raising an assessment indefinitely, but only

where it can be established that there is some want in proper disclosure by the taxpayer. While this must be analysed within its

proper context, the text thereof operates as the fundamental provision which determines the question in issue on this appeal. Section

955 reads:

(1) Subject to subsection (2) and to section 1048 , an inspector may at any time amend an assessment made on a

chargeable person for a chargeable period by making such alterations in or additions to the assessment as he or she

considers necessary, notwithstanding that tax may have been paid or repaid in respect of the assessment and

notwithstanding that he or she may have amended the assessment on a previous occasion or on previous occasions, and

the inspector shall give notice to the chargeable person of the assessment as so amended.

(2) (a) Where a chargeable person has delivered a return for a chargeable period and has made in the return a full and

true disclosure of all material facts necessary for the making of an assessment for the chargeable period, an assessment

for that period or an amendment of such an assessment shall not be made on the chargeable person after the end of the

period of 6 years commencing at the end of the chargeable period in which the return is delivered and no additional tax

shall be payable by the chargeable person and no tax shall be repaid to the chargeable person after the end of the period

of 6 years by reason of any matter contained in the return.

(b) Nothing in this subsection shall prevent the amendment of an assessment—

(i) where a relevant return does not contain a full and true disclosure of the facts referred to in paragraph (a),

(ii) to give effect to a determination on any appeal against an assessment,

(iii) to take account of any fact or matter arising by reason of an event occurring after the return is delivered,

(iv) to correct an error in calculation, or

(v) to correct a mistake of fact whereby any matter in the assessment does not properly reflect the facts disclosed by

the chargeable person,

and tax shall be paid or repaid where appropriate in accordance with any such amendment, and nothing in this section

shall affect the operation of section 804(3).

(3) A chargeable person who is aggrieved by an assessment or the amendment of an assessment on the grounds that the

chargeable person considers that the inspector was precluded from making the assessment or the amendment, as the

case may be, by reason of subsection (2) may appeal against the assessment or amended assessment on those grounds

and, if on the hearing of the appeal the Appeal Commissioners determine—

(a) that the inspector was so precluded, the Tax Acts shall apply as if the assessment or the amendment, as the case

may be, had not been made, and the assessment or the amendment of the assessment as appropriate shall be void, or

(b) that the inspector was not so precluded, the assessment or the assessment as amended shall stand, except to the

extent that any amount or matter in that assessment is the subject of a valid appeal on any other grounds.

(4) (a) Where a chargeable person is in doubt as to the application of law to or the treatment for tax purposes of any

matter to be contained in a return to be delivered by the chargeable person, that person may deliver the return to the

best of that person's belief as to the application of law to or the treatment for tax purposes of that matter but that

person shall draw the inspector's attention to the matter in question in the return by specifying the doubt and, if that

person does so, that person shall be treated as making a full and true disclosure with regard to that matter.

(b) This subsection shall not apply where the inspector is, or on appeal the Appeal Commissioners are, not satisfied that

the doubt was genuine and is or are of the opinion that the chargeable person was acting with a view to the evasion or

avoidance of tax, and in such a case the chargeable person shall be deemed not to have made a full and true disclosure

with regard to the matter in question.

(5) (a) In this subsection, “relevant chargeable period” means—

(i) where the chargeable period is a year of assessment for income tax, the year 1988-89 and any subsequent year

of assessment,

(ii) where the chargeable period is a year of assessment for capital gains tax, the year 1990-91 and any subsequent

year of assessment, and

(iii) where the chargeable period is an accounting period of a company, an accounting period ending on or after the

1st day of October, 1989.

(b) Sections 919 (5) (b) and 924 shall not apply in the case of a chargeable person for any relevant chargeable period,

and all matters which would have been included in an additional first assessment under those sections shall be included in

an amendment of the first assessment or first assessments made in accordance with this section.

(c) For the purposes of paragraph (b), where any amount of income, profits or gains or, as respects capital gains tax,

chargeable gains was omitted from the first assessment or first assessments or the tax stated in the first assessment or

first assessments was less than the tax payable by the chargeable person for the relevant chargeable period concerned,

there shall be made such adjustments or additions (including the addition of a further first assessment) to the first

assessment or first assessments as are necessary to rectify the omission or to ensure that the tax so stated is equal to

the tax so payable by the chargeable person.

Other relevant provisions as to the nature and extent of appeals are referred to below as part of an analysis of context.

Background

5. In February 2006, the Revenue Commissioners issued income tax assessments over 16 years to the taxpayer, covering returns for

the tax years 1985/6 through to 2001. The claimed cumulative liability to tax amounted to about €15 million. This spread of years cut

through 1988, the year in which self-assessment was introduced by legislation for the relevant category of taxpayer. For all of those

years, the taxpayer had lodged tax returns. The Revenue Commissioners were apparently not satisfied with their accuracy. In respect

of the years prior to self-assessment, the Revenue Commissioners had 10 years in which to raise an assessment, or an additional

assessment, from the end of the taxation year; s. 924(2)(b) of the Act of 1997. This was subject to statutory amendment. It became

6 years initially and is now fixed at 4 years under ss. 17(1)(f) and (g) of the Finance Act 2003. It is not in issue on this appeal as to

what period is applicable and the parties have not addressed that question. In this case, the 10 year period is claimed to be

applicable by the Revenue Commissioners. For the years of self assessment, s. 955(2)(a) of the Act of 1997 set the period at 6 years,

but this period has also since been reduced, in this instance to 4 years. This Court is not concerned with ruling on these time limits,

insofar as they may be applicable. That would be a matter, if it is in issue, for the Appeal Commissioners. Under the statute, in the

event that a return to income tax was fraudulently or negligently made, these time limits do not apply. By letters dated 27th February

2006, the taxpayer appealed all of the assessments. For the self-assessment years, the notices of appeal to the Appeal

Commissioners asserted that the assessments were “not made within the time limit of section 955 of the [Act of 1997] and [are]

accordingly void.” While a similar claim was not made as to the years prior to self-assessment, the parties are treating the notice as if

such a claim had been made for these also. It is to be noted that the preliminary objections and grounds of appeal, as put in the

communications dated 27th February 2006 from the taxpayer to the Revenue Commissioners, also claimed that: no proper assessment

had been made because the person issuing the assessment to income tax was “not … an [i]nspector of [t]axes or officer properly

appointed”; the taxpayer was not resident in Ireland for the relevant tax year or subject to the double taxation treaty with the

neighbouring kingdom; and not domiciled in the State. In addition, the taxpayer asserted that he was not chargeable to tax under s.

58 of the Act of 1997; he was not in “receipt of or entitled to the assessed miscellaneous income or any miscellaneous income”; that

he “was not in receipt of or entitled to income in the sum of IR£1,500,000”; and that the amounts were “excessive in all the

circumstances”.

6. As is apparent from this, while a major issue before the Appeal Commissioners turned out to be one which was expected, namely

whether the assessments were issued by the relevant inspector of taxes late or whether that time limit was inapplicable by reason of

the neglect in disclosure of the taxpayer, a series of significant other issues had also been raised as to liability to income tax. As is

apparent from the grounds recited above, these related to the final amount of income tax payable.

Appeal Commissioners

7. The matter first came on for hearing before the Appeals Commissioner on 18th January 2008. After evidence and argument as to

the accuracy of the tax returns, centred in particular as to the residency status of the taxpayer, Commissioner O’Callaghan, on the

25th March 2009, ruled in favour of the Revenue Commissioners, holding that in the circumstances of the case the relevant inspector

of taxes had not been barred by the applicable time limits from issuing assessments to taxation in the relevant years. This is the

ruling:

I think it is fairly clear I think the point is unarguable. There is the issue of whether I should admit further evidence but

that does not arise at this point. The arguments about the bank accounts – I don’t think I need to address them. Also

there are various sub arguments advanced by the [Revenue Commissioners] very comprehensively but I can’t find a way

around the fact that [section] 955.2(a) is quite specific: have returns been made that have disclosed all material facts

necessary for the making of assessments for the chargeable period? Now I have evidence and it is accepted that the

returns were unclear regarding the entitlement to allowances because of the uncertainty regarding the residency starters

and of your own submissions in appealing the returns that the taxpayer was not resident. I have the fact that there was

a tax consequence here in as much as the tax was not paid by virtue of the allowance and reliefs. I do not believe I need

to look at anything else. There are all sorts of other arguments that I might address but I am not going to because I think

this first point decides it. Insofar as I am wrong on that point then I think I would have to be given a chance of making

findings on the other matters that the [Revenue Commissioners have] urged on me and also to consider whether to allow

further evidence. I’ve read those cases with some interest. … But I am saying that I’m confining myself to this point

because I think it is sufficient: that the returns did not in fact comply with the Act on the basis of evidence which I have

referred to there that they did not comply specifically with [section] 955.2(a). I am not basing it on any other evidence

of what I thought of the bank officials, for example, or who I thought the person might or might not be in the accounts. I

am stressing that. I am repeating myself because I think it is important to do so so that it is quite clear the basis upon

which I am making this finding. So, on the preliminary point I’m against [counsel for the taxpayer] but everything else is

available.

8. There then followed discussion before the Appeal Commissioners of the other issues which had been raised. This included a

contention on behalf of the taxpayer that there had been a formulaic repetition of liability in taxation of a particular figure by the

Revenue Commissioners over a number of years. The taxpayer then sought to appeal that preliminary ruling on liability to the Circuit

Court. The remedy of an appeal from the Appeal Commissioners is available to the taxpayer but not to the Revenue Commissioners.

Submissions were sought by the Appeal Commissioners on that issue. The matter came on for a hearing again on 23rd October 2009.

After oral and written submissions, Commissioner O’Callaghan ruled against the taxpayer holding that there was one appeal from the

determination and that it was not possible to adjourn with a view to facilitating a fragmented appeal. He stated:

I agree with the submissions made by [counsel for the Revenue Commissioners] which is that the assessment shall stand

except to the extent that … [section] 955.3.B “The assessment or the assessment as amended shall stand except to the

extent that any amount or matter in that assessment of the subject of a valid appeal on any other grounds.” I construe

that as meaning that insofar as there are … other grounds which constitute a valid appeal in relation to the assessment –

the assessment – does not stand. I’m stressing this point not because it’s the key point but I think it is perhaps the

clearest one – it clearly envisages an open assessment which has to be the subject of a determination in due course by

an appeal commissioner. And the point made by [counsel for the Revenue Commissioners] … which is that if there isn’t a

separate appeal function under [section] 955 then how does it go further? And I think the answer to that is the point I

made earlier on that insofar as 955 has been dealt with, then the assessment itself against which a challenge has been

raised on the time limit point in 955 … is still in front of me and requires to be signed off, and that is where the appeal

process takes off.

Ruling of the High Court

9. Counsel on behalf of the taxpayer then informed the Appeal Commissioners that judicial review was contemplated. Leave was

granted in that regard by Peart J on 7th December 2009. While the orders of mandamus and injunction were also sought, the essential

point is that encapsulated in the first relief sought:

A declaration that the [ruling by the Appeal Commissioners] that the assessments under appeal were valid under section

955 of the Taxes Consolidation Act 1997 as amended is a determination from which the [taxpayer applicant] has a right of

appeal pending the hearing of the other grounds of appeal.

10. By notice of motion, dated 9th December 2010, the matter was brought on for a hearing as of the notional date of 15th January

2010. A statement of opposition was filed by the notice party as of 19th March 2010, the Appeal Commissioners taking no part in the

judicial review. Following an exchange of affidavits and after hearing oral argument, Hedigan J ruled against the taxpayer’s contention

as to the availability of any interim appeal to the Circuit Court prior to the complete disposal of all issues in respect of which the

taxpayer had appealed to the Appeal Commissioners; O’Rourke v Appeal Commissioners [2010] IEHC 264. The operative part of the

ruling of the High Court is as follows:

The wording of Sc. 942 [of the Taxes Consolidation Act 1997] is clear: it speaks of the appeal against an assessment and

there is only one appeal. Mr. O’Rourke’s contention that Sc.955(3)and/or Sc. 924 confers on him a right of appeal that is

separate and distinct from the usual form of appeal is not supported by the provisions of either of those sections. In

relation to the provisions of Sc.955(3), that section provide the taxpayer with an express ground of appeal, while drawing

a distinction between the grounds of appeal and the appeal itself. The section expressly recognises that an appeal

against an assessment may be made on many grounds and simply confers an express right to challenge an assessment

that had been raised under Sc. 955 on the grounds specified in Sc. 955(3) that is that the chargeable person considers

that the inspector was precluded from making the assessment. Sc. 955(3) plainly provides that if the Appeal

Commissioners determine that the assessment was validly made than the assessment stands save to the extent that any

amount or matter in that assessment is the subject of a valid appeal on any other grounds.

Therefore there is a single appeal only and this lies upon determination of the appeal.

To summarise, tax appeals are a creature of statute and the jurisdiction and general powers of the Appeal Commissioners

are conferred by statute. An analysis of the provisions governing those appeals confirms that in respect of any individual

assessment there is a single appeal, which appeal is determined (and can only be determined) by the Appeal

Commissioners.

It is clear that the legislative intention favours the efficient administration of tax appeals; there should be a single right of

appeal at the end of the hearing before the Appeals Commissioners. For the reasons as outlined by the Appeal

Commissioners, there is only one appeal, though there maybe a number of grounds of appeal. The implication of Mr.

O’Rourke’s submissions that a tax payer has a right of appeal on a preliminary issue is that in a complex case, where there

might be multiple preliminary issues to be decided, an issue could be subject to appeal during the course of the hearing

before the Appeal Commissioners resulting in multiple appeals arising in the same case. The consequent delay and loss

that would result would be unfair, oppressive and highly inefficient.

11. Essentially, the same arguments are made by both sides on this appeal as had been made before the High Court. For the Revenue

Commissioners it is contended that taxation appeals are creatures of statute and that the jurisdiction and general powers of the

Appeal Commissioners are governed by statute. An appeal under s. 955(3) of the Act of 1997 must be construed as being an appeal

against assessment, and not an interim ruling as part of the assessment or leading to an assessment. Accordingly, they urge that it is

only when there has been a determination of the full appeal that any further right of appeal to a judge of the Circuit Court, or to the

High Court by way of case stated, can arise; State (Whelan) v Smidic [1938] 1 IR 626. Thus the argument is that while many issues

may arise during the course of a hearing before the Appeal Commissioners, these do not give rise to the transformation of what are

essentially grounds of appeal into a multiplicity of types of appeal.

12. For the taxpayer it was urged that the trial judge’s reference to “the efficient administration of tax appeals” was an inappropriate

consideration since a literal construction of the Act of 1997 is required. This literal construction, it is claimed, clearly intends that a

self-assessed taxpayer has a right to appeal and challenge the validity of any assessment made outside “the statutory four years”.

That right of appeal is claimed to be exclusive to a taxpayer under that system and separate from any issue as to the content upon

which taxation may be based on the quantum of an assessment. Thus it is claimed that there are two distinct and separate rights of

appeal differing as to procedures; the onus and burden of proof on a taxation assessment as raised outside the relevant time limit

being on the inspector of taxes, so it is asserted, but in an appeal against quantum the taxpayer must displace the assessment,

producing evidence in that regard.

Availability of a partial appeal

13. In the realm of hearings in a court, the general rule is for a single trial of all issues at the same time. However, this general rule

can be departed from in favour of a modular trial provided that the result is a significant potential saving in time and expense and

does not result in an injustice to any of the parties; Weavering Macro Fixed Income Fund Ltd (In Liquidation) -v- PNC Global

Investment Servicing (Europe) Ltd [2012] 4 IR 681. Any such departure is exceptional. There is no such principle applying to hearings

before the Appeal Commissioners. The obligation cast on them is to hear the entirety of the appeal. Their approach to the appeal

must involve the application of fair procedures. This, of itself, does not preclude a sensible approach to the management of complex

material so that hearings might proceed in appropriate cases in stages: for instance as to liability, as to the applicability of exceptions

from taxation and as to quantum. The final result of this process is a determination by the Appeal Commissioners. That word

“determination”, appearing as it does in a consolidating taxation statute, is not argued by the Revenue Commissioners to come within

the category of “terms of art”, described by Diplock LJ in Sydall v. Castings Limited [1967] 1 QB 302, at 313 as constituting words

and phrases which “are more precise in their meaning than they are in the language of Shakespeare or of any of the passengers on

the Clapham omnibus”. This means that such an expression or word is part of the usage of the English language evolved by lawyers

whose profession it is to draft and construe documents which are intended to give rise to legally enforceable rights and duties. Where

a word or phrase is not a term of art, it must be given its ordinary meaning. What its ordinary meaning is must be interpreted in the

particular legislative context in which it is used. Nonetheless, it may be noted that the concept of determination was inserted into the

Act of 1997 against a backdrop of having been previously construed in State (Whelan) v Smidic [1938] 1 IR 626, a decision of the

Divisional Court as to the powers to reopen an issue prior to the issue of a determination by the Special Commissioners, the

predecessors of the Appeal Commissioners.

14. There the Special Commissioner made a determination as to the date of payment involving an issue as to the discontinuance of a

business venture engaged in by the taxpayer and the date of commencement of a later enterprise. The Special Commissioner did not

make a final determination, fixing the amount of tax to be paid, instead allowing the matter to stand over so as to give the revenue

authorities and the taxpayer’s representative time to analyse quantum. The inspector of taxes had, according to the procedure of the

time, expressed his dissatisfaction with the ruling as being erroneous in point of law. On resuming the hearing, new facts came to the

knowledge of the inspector of taxes and he applied to have the entire matter reviewed by the Special Commissioner, the taxpayer

objecting to this approach. Hanna J stated at 634:

On the strict reading of the statute, an appeal by way of case stated can, in my opinion, only arise after a final

determination of the appeal by the Commissioners. It may be that in some instances a case has been stated on a matter

of principle where the parties consented and the Special Commissioner acquiesced as a matter of convenience; but under

sect. 149 of the Act of 1918 the option of the dissatisfied party to declare his dissatisfaction is “immediately after the

determination of the appeal,” and then within twenty-one days he can serve a notice asking for a Case Stated. The

words of this section, in my opinion, preclude an application for a Case Stated as a matter of right on an interim ruling or

decision which is not the determination of the appeal. This view is supported by the terms of sub-sect. 4 of sect. 149,

which enacts that, notwithstanding that the case has been stated or is pending, tax shall be paid in accordance with the

assessment of the Commissioners. It shows that even if, after an interim determination of a matter of principle, there only

remains a final computation, an assessment must be arrived at before it can be said that the Special Commissioner is

functus officio. In my opinion, so long as the Special Commissioner is not functus officio, he has control of the matter to

revise or reopen any point, even where it is not a matter of discovering evidence that was not before him previously, but

is merely a matter of a change of his own previous opinion upon fuller consideration.

While it would not be determinative of this appeal that what was, or was not, a determination by the former appeals body from a

decision of the Revenue Commissioners, the context in which s. 955 of the Act of 1997 operates as to income tax appeals, yields the

same result. Except as specifically provided for by statute, the time when an appeal is open to a taxpayer is when the Appeal

Commissioners have determined all issues in question on the taxpayer’s appeal.

15. The powers vested in the Appeal Commissioners are central to any analysis as to whether an interim ruling becomes appealable

once it is made. Under s. 934 of the Act of 1997, the only powers of the Appeal Commissioners are to “abate or reduce the

assessment” appealed under subsection (3) where there is “evidence that the appellant is overcharged by any assessment” but

“otherwise the Appeal Commissioners shall determine the appeal by ordering that the assessment shall stand.” Apart from that, an

appeal carries the risk to the taxpayer under subsection (4) of an increase in liability to taxation since where “it appears to the

Appeal Commissioners that the person assessed ought to be charged in an amount exceeding the amount contained in the

assessment, they shall charge that person with the excess.” Thus three possible results are provided for: affirmation of the

assessment, abatement of taxation liability and increase in the amount of tax due. No other outcomes to an appeal are contemplated

within the legislation. Those results, and only these results, may also occur before the Appeal Commissioners through settlement or,

as s.933(3)(b) puts it, where “the inspector of other officer and the appellant come to an agreement, whether in writing or otherwise,

that the assessment is to stand, is to be amended in a particular manner or is to be discharged or cancelled”. On one of the three

legislatively contemplated results being reached, that is the end of the process before the Appeal Commissioners. This is explicitly

stated in s. 933(4):

All appeals against assessments to income tax or corporation tax shall be heard and determined by the Appeal

Commissioners, and their determination on any such appeal shall be final and conclusive, unless the person assessed

requires that that person's appeal shall be reheard under section 942 or unless under the Tax Acts a case is required to

be stated for the opinion of the High Court.

16. Under s. 948, it is the duty of the Appeal Commissioners to “hear and determine an appeal to them” as with an assessment of

income tax. Appeals by way of case stated to the High Court are provided for by s. 941 of the 1997 Act. Only one definition of an

appeal is given in the relevant part of the Act of 1997. That is provided for in s. 950(1) as “an appeal under section 933” for income

tax. Section 941(1) provides:

Immediately after the determination of an appeal by the Appeal Commissioners, the appellant or the inspector or such

other officer as the Revenue Commissioners shall authorise in that behalf (in this section referred to as “other officer"), if

dissatisfied with the determination as being erroneous in point of law, may declare his or her dissatisfaction to the Appeal

Commissioners who heard the appeal.

A “determination” is at least described, if not defined in the Act of 1997. Section 950(1) states that it is “a determination by the

Appeal Commissioners under section 933(4), and includes an agreement referred to in section 933(3) and an assessment becoming

final and conclusive by virtue of section 933(6)”. In that regard, s. 942, which gives the right of further appeal, from the Appeal

Commissioners to the Circuit Court, references a “determination”. Within this context, this can only relate to the three outcomes

allowed within the Act of 1997 to the process of an appeal before the Appeal Commissioners. Section 942 reads:

Any person aggrieved by the determination of the Appeal Commissioners in any appeal against an assessment made on

that person may, on giving notice in writing to the inspector or such other officer as the Revenue Commissioners shall

authorise in that behalf (in this section referred to as “other officer”) within 10 days after such determination, require

that the appeal shall be reheard by the judge of the Circuit Court (in this section referred to as “the judge”) in whose

circuit is situate …

17. Both the Appeal Commissioners and the Circuit Court are creatures of statute. Thus, that court does not possess the full and

original jurisdiction of the High Court under Article 34.3.1º but is instead dependent upon a myriad of legislative provisions as to the

exercise of and limitations of its jurisdiction; Grimes v Owners of the SS Bangor [1948] 1 IR 350 and The State (Boyle) v. Neylon

[1986] I.R. 551. Thus, the Act of 1997 goes so far as to specifically apply s. 934(2) to the Circuit Court, enabling representation by a

barrister, solicitor, accountant or member of the Institute of Taxation to plead a case. Otherwise, only a solicitor or barrister or the

taxpayer could plead a case. Both the Appeal Commissioners and the relevant judge of the Circuit Court are enabled in specific terms

to state a case “on a point of law” for “the opinion of the High Court”; in the case of the Appeal Commissioners under s. 948(2) and,

it appears for the sake of certainty, under s. 949(2), and in that of the Circuit Court under s. 942(3). This provides:

The judge shall with all convenient speed rehear and determine the appeal, and shall have and exercise the same powers

and authorities in relation to the assessment appealed against, the determination, and all consequent matters, as the

Appeal Commissioners might have and exercise, and the judge's determination shall, subject to section 943 , be final and

conclusive.

18. Thus, the relevant procedural steps are also, through the application of s.943, applied to the Circuit Court. The judge of the

Circuit Court only has the right to state a case for the opinion of the High Court because the Act of 1997 has given that power to

that judge. It is further made explicit that the process in the Circuit Court is at an end, as before the Appeal Commissioners, only

where the final reckoning of tax is made. That process does not end on any ruling leading to that point. Section 942(6) references as

the only outcomes “where the amount of tax is altered by the determination of the judge or by giving effect to an agreement under

subsection (8)”, in which case serious interest provisions may apply. In this regard, whether the appeal is before the Circuit Court of

before the Appeal Commissioners, on an assessment being made by an inspector of the Revenue Commissioners in respect of a return

which a chargeable person is obliged to submit under s. 951, and a power is exercised under s. 955, enquiries may be made as

appropriate or “any amount of income” may be assessed. Such an assessment may not be made out of time under s. 954, the specific

limit here applying being s. 955(2). Referable to that can be a question of a return which is incorrect. Applicable thereto may be the

relevant definition in s. 924(2) which provides:

In this subsection, “neglect” means negligence or a failure to give any notice, to make any return, statement or

declaration, or to produce or furnish any list, document or other information required by or under the Income Tax Acts;

but a person shall be deemed not to have failed to do anything required to be done within a limited time if such person did

it within such further time, if any, as the Revenue Commissioners or officer concerned may have allowed and, where a

person had a reasonable excuse for not doing anything required to be done, such person shall be deemed not to have

failed to do it if such person did it without unreasonable delay after the excuse had ceased.

19. Under s. 924(1) where an inspector discovers that a person chargeable has “not delivered a full and proper statement” then “an

additional first assessment” becomes possible. Under s. 956, for the purpose of making an assessment “on a chargeable person for a

chargeable period”, an inspector may accept “either in whole or in part” the particulars or statement in a return or “may assess any

amount of income”. The time limits in s. 955(2) are either applicable or not and the adjudication of that stands out here as of

significance. It is central, moreover, to any such exercise under the Act of 1997 as to what result will ensue as to the amount of tax

to be paid. Neglect or otherwise by a taxpayer is but a step along the way. It is this final issue as to quantum which has been

decided by the Appeal Commissioners. That is what their determination of the appeal is all about. A ruling along the way is not enough

to enable any further appeal entitlements without making any decision as to whether the assessment should be affirmed, abated or

increased.

20. It might finally be commented that within the Act of 1997, it is rare to find a situation where a preliminary step taken by an

inspector of taxes, in contrast to an assessment which gives rise to liability to pay income tax in a particular amount, is capable of

being appealed to the Appeal Commissioners. The entire scheme of the taxation code is to wait until the end result is determined and

then to have a unified appeal and a unified ruling as to liability and amount before a general appeal to the Circuit Court. One such

exception may possibly arise where an inspector issues an assessment under s. 956, following the receipt of a return of tax by the

taxpayer. There, the inspector in issuing the assessment is not precluded from exercising statutory powers of enquiry, a step which

may be onerous on a taxpayer. In that way, the accuracy of the return may be fully checked. Such enquires may not be made after 6

years, reckoned from the end of the tax year where the relevant return was made. Such a power may be exercised outside that

period where the inspector “has reasonable grounds for believing that the return is insufficient due to its having been completed in a

fraudulent or negligent manner.” This echoes s. 955 as to the concept of enlarging time. In contrast, however, s. 956 specifically

enables the taxpayer “who is aggrieved by any enquiry made or action taken by an inspector” after the 6 years to appeal the decision

to exercise the power of enquiry to the Appeal Commissioners. It may argued either way that such an appeal as to intermediate

powers arises absent the raising of a tax assessment. Perhaps it does. As the matter has not been argued, the point is not to be

decided here. What is clear, however, is that no possible construction of s. 955 incorporates any such ostensible exception. Just how

the specific appeal power granted to a taxpayer under s. 956 fits in with the jurisdiction of the Appeal Commissioners is not in issue in

this case and no comment is made in that regard.

Result

21. An appeal from the Appeal Commissioners to the Circuit Court is open to a taxpayer in respect of whom an adverse finding in

respect of the time for the making of an assessment by an inspector of taxes has been made and where final liability to taxation has

been decided. This appeal will not be open at the point at which any intermediate finding is made, but only when the appeal is

determined. An appeal is not determined by a ruling that an inspector of taxes has validly made an assessment outside the statutory

time limits, because for instance a tax return does not contain all relevant information. In any such case, an appeal is only determined

by the Appeal Commissioners where there is a final decision by them as to liability to pay and as to the amount of tax for which the

taxpayer is liable. Once that determination is made, an appeal may be taken within the relevant time limits by the taxpayer to the

Circuit Court on any ground open to the taxpayer under the Taxes Consolidation Act 1997.