Maliha Group Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 16 December 2010
Neutral citation: [2011] UKFTT 10 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Maliha Group Ltd appealed HMRC's refusal to allow input VAT for May–Sept 2007 in respect of purchases from three suppliers. The Tribunal found supplies from two suppliers (Soundmania and RTV) did not take place and disallowed £4,179.75, but held that supplies from BKW did occur and allowed £13,755.50 input tax; it also found HMRC had not validly issued a Regulation 29(2) direction after the event. The appeal was allowed in part and the appellant was entitled to a net repayment.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal indicates that a purchaser holding VAT invoices may not be disqualified from claiming input tax by belated, imprecise or retrospective requests for evidence framed as a Regulation 29(2) direction; such directions must be clear, precise and issued in time, and where credible evidence of genuine underlying transactions exists and there is no material indication the purchaser knew of fraud, input tax supported by supplier invoices can be allowable.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment suggests as obiter that broad investigatory requests for "whatever evidence you can" are appropriate as practice but should not be retroactively treated as formal statutory directions with punitive effect, and that legal certainty requires evidential obligations needed to secure a right to deduct be known when the right crystallises rather than imposed retrospectively.