Rogers & Norton News
The Supreme Court has held that HM Revenue and Customs Commissioners has a general power to detain goods pending investigation as to whether they were liable to forfeiture for non payment of duty.
Lord Sumption and Lord Reed with whom the other justices agreed, said that the right to seize or detain property under section 139(1) of the 1979 Act was dependent on that property actually being liable to forfeiture under one of the various forfeiture provisions of the Act. That turned on the objectively ascertained facts and not on the beliefs or suspicions of the commissioners or their officers, however reasonable.
However, in Jacobsohn v Blake (1844) 6 Man & C 919, 13 LJ CP 89) a power of detention had been held to exist which was not expressly conferred by the customs and excise legislation, but arose by necessary implication from the officers’ statutory power to examine goods for the purpose of determining the duty payable or whether they were liable to forfeiture. It was not conditional upon the goods being liable to forfeiture.
The correct construction of section 139(1) was that since the released goods had not in fact been liable to forfeiture their detention had not fallen within the scope of section 139(1). It did not however follow that that the officers had not had the power to detain the goods for the purpose of investigating their duty status. Peter Hastings comments:- “The Court has held that HMRC do not have a right under S139 CEMA 1979 to detain or seize goods based on suspicion or belief. The Court has found that there is a common law power to detain goods upon reasonable suspicion for such time as is reasonably necessary to allow customs officers to examine and investigate the status of goods. However, this has not been tested and I expect that there will be disputes over the reasonableness of the reasons and the time taken to investigate. The Court’s findings seem to conflict with the recent amendments to s. 139 CEMA introduced by s. 226 of the Finance Act 2013. This conclusion may also be incompatible with the requirements of fair process, including under Article 1 Protocol 1 of the European Convention, a point that I have raised in the Tax Tribunal. I expect that there will be an increase in Judicial Reviews when goods are detained, within which applications will be made for the goods to be released”. For further information contact Peter Hastings or telephone 01603 675639.