Environment – Landfill tax – Taxable disposal – Construction materials – Claimant applying for judicial review of decision of defendant Revenue and Customs Commissioners that “regulation layer” of waste subject to landfill tax contrary to previous ruling – Whether earlier ruling being confined to single site and materials –Whether claimant failing to disclose material facts prior to ruling – Application granted
The claimant carried on business in the supply of waste disposal services and operated 12 active landfill sites in the UK. Those sites contained cells in which waste was disposed of. The disposal of waste was subject to landfill tax charged by the Finance Act 1996. The landfill site cells were constructed with a view to ensuring the safe containment of waste and the sites also contain roads and other infrastructure to facilitate the landfill operation.
The claimant challenged a decision of the defendant Commissioners for HM Revenue and Customs by which the defendants informed the claimant that they were re-instating a decision directing it to treat as subject to landfill tax the use of material in the construction of a “regulation layer”. That layer was stated to be the layer above the final layer of soft waste (the EVP layer) placed below the “cap” used to seal the containment system which housed the waste material disposed of within the cell. The regulation layer was 300mm deep, and comprised soil or fine soils or other appropriate material.
The claimant argued that the defendants’ decision was contrary to an earlier ruling, made in response to the claimant’s request for guidance in relation to one of its sites. According to that ruling, the installation of a regulation layer under the construction of a cap was outside the scope of landfill tax because, as the regulation layer comprised “capping” works, it concerned the “use” of material rather than the disposal of waste which represented that the regulation layer was not subject to landfill tax.
The defendants contended that the earlier ruling had been confined to the single site and could not reasonably be relied upon by the claimant in respect of any other landfill site. The ruling had been limited to the use of soil for the regulation layer and the claimant could not reasonably rely upon it to use any other material for the regulation layer, including fine soil. Further, the claimant had not disclosed all relevant facts before the ruling was made, in particular, it had failed to tell the defendants that it intended to apply the ruling, not only to the regulation layer, but also to the EVP layer. In those circumstances, it would not be conspicuously unfair to revoke the ruling with retrospective effect in respect of all other sites.
Held: The application was granted.
(1) The ruling was not limited to the single site in relation to specific guidance but was a general statement by the defendants, albeit in the context of that site, as to the meaning and effect of the relevant legislation. It was generally applicable to other sites where the claimant deployed a regulation layer, in accordance with the EA requirements at such sites. When the request for guidance was made, the claimant had explained in some detail the nature of the regulation layer and there was nothing to suggest that it was unique to that site. The request was therefore to be interpreted as one for general guidance. The defendants’ response was also in general terms and did not depend on any circumstances that were specific to the site in issue. Therefore, a regulation layer constructed in materially the same way at any other site would inevitably be treated in the same way for tax purposes.
(2) The ruling was clear, unambiguous and devoid of any relevant condition; and it did not require the deployment of soil and soil only for the regulation layer at the claimant’s landfill sites. Documents had been disclosed after the hearing which undermined any contention that the defendants had intended to make a ruling that was site-specific. It was deeply unattractive for the defendants to advance their case on the basis of incomplete material known to the claimant when they had in their possession further significant evidence showing that their intention at the material time was inconsistent with the case presented at trial. Interpretations of important fiscal information that were likely to carry substantial financial consequences required the involvement of HMRC officers at a higher policy level. It was apparent that senior officers had in fact been involved in the decision-making leading to the ruling and that an assessment had been made as a matter of general principle and application. There was nothing in the ruling that expressly or impliedly required the deployment of soil only in the regulation layer.
(3) There had been no material non-disclosure by the claimant such that it could not legitimately rely upon the ruling. Since the EVP layer was distinct from the regulation layer, the ruling could not be directly relied upon to claim that the EVP layer was not subject to landfill tax. Although a similar rationale as to the “use” of the material in the regulation layer might be advanced in relation to the EVP layer, a separate evaluation had to be carried out. Accordingly, any potential application of the ruling to the EVP layer was not a matter that the taxpayer was obliged to draw to the defendants’ attention if it was to take advantage of the ruling.
Kieron Beal QC (instructed by Nabarro LLP) appeared for the claimant; Melanie Hall QC and Brendan McGurk (instructed by the General Counsel and Solicitor to the Revenue and Customs Commissioners) appeared for the defendants.
Eileen O’Grady, barrister
