| REVENUE — Industrial and provident societies — Value added tax paid by society — Society later transferring its engagements — Whether transferee having right to claim refund of overpaid tax — Industrial and Provident Societies Act 1965, s 51— Value Added Tax Act 1994, s 80
Midlands Co-operative Society Ltd v Revenue and Customs Commissioners [2008] EWCA Civ 305; [2008] WLR (D) 105
CA: Arden, Wall and Wilson LJJ: 9 April 2008
A claim under s 80 of the Value Added Tax Act 1994 to repayment of overpaid tax was capable of being assigned. In particular, it might form part of an assignment of the assets of an industrial and provident society pursuant to s 51(1) of the Industrial and Provident Societies Act 1965.
The Court of Appeal so held when dismissing the appeal of the Revenue and Customs Commissioners from the decision of Blackburne J [2007] EWHC 1432 (Ch) who had allowed the appeal of the claimant, the Midlands Co-operative Society Ltd, from the decision of the VAT and Duties Tribunal (Mr Colin Bishopp) released on 20 July 2005 dismissing the claimant’s claim under s 80 of the Value Added Tax Act 1994 for the repayment of VAT which had been overpaid by the Leicestershire Co-operative Society Ltd.
On 1 April 1995 the engagements of the Leicestershire Co-operative Society Ltd (“Leicester”) were transferred to the claimant pursuant to s 51(1) of the Industrial and Provident Societies Act 1965. Subsequently the claimant made claims under s 80 of the 1994 Act for the repayment of VAT which it claimed that the Leicester had over-declared. The Revenue and Customs Commissioners refused to make any repayment in so far as it related to VAT paid prior to the transfer of Leicester’s engagements to the claimant.
ARDEN LJ said that the Value Added Tax Act 1994 and the Regulations made thereunder took effect subject to the general law unless the general law was excluded. Under the general law, the right to a repayment of moneys overpaid to the revenue was a chose in action. Under the general law, choses in action were assignable under s 136 of the Law of Property Act 1925. S 51(1) of the Industrial and Provident Societies Act 1965 made it unnecessary for the parties to execute any document: see the concluding words of that subsection, “without any conveyance or assignment”. Where a statute referred to a person who had paid VAT, and gave him a right of repayment, the statute should be taken, in the absence of contrary indication, to have intended to include a person in whom he had vested that right. The contrary indication would have to be clearly stated because the right to a repayment was a right of property which should not be restricted without clear wording. It would follow that if a person had assigned a chose in action to another so as to invest in him the right to sue for it, and to give a good receipt, the revenue could not properly pay the assignor. Where VAT had been charged to customers, received by the registered person and paid over to the revenue so as to give rise to a claim under s 80 of the 1994 Act, the registered person could set up arrangements under regs 43A to 43H of the Value Added Tax Regulations 1995 (SI 1995/2518) in order to repay his customers who had been wrongly charged VAT and to pre-empt the unjust enrichment defence under s 80(3). It was to be presumed that unless otherwise stated, a right which was created by statute was assignable under the general law in the same way as rights created by the general law, unless the statute otherwise clearly provided. There was nothing to exclude the ordinary law to the effect that a claim under s 80 might be assigned. In particular, it might form part of a statutory assignment of assets pursuant to s 51(1) of the 1965 Act.
WALL and WILSON LJJ agreed.
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