BJ Shere Khan Star City Limited & Anor v The Commissioners for HMRC
Decision date: 18 July 2024
Neutral citation: [2024] UKFTT 639 (TC)
Overall AI summary confidence: medium
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: medium
This appeal concerned HMRC assessments and penalties against BJ Shere Khan Star City Ltd and Mr Saddiq for alleged omitted sales, incorrect zero‑rating and wrongful input tax claims, and related personal liability notices. The tribunal rejected HMRC's case that the company had operated a second outlet (Oodles) and found no suppression of sales at Shere Khan, so the CT discovery assessments failed, but it upheld HMRC’s disallowance of zero‑rating and certain input tax claims (BMW, fuel, Dobhai). Penalties were recharacterised as careless rather than deliberate, with increased mitigation for assistance, and the personal liability notices were quashed.
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: medium
The tribunal indicates that evidence giving rise only to suspicion is insufficient to satisfy the objective reasonable‑belief test required for a discovery assessment; in contrast a VAT "best judgment" assessment must be founded on some material and a reasoned, non‑arbitrary valuation, and taxpayers bear the burden of proving zero‑rating and input tax entitlement where records are inadequate.
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 tribunal observed that till data sampled from years after the relevant periods and without demonstrable randomisation has limited probative value; findings from separate proceedings against different operators at the same site are not binding unless the same identity is sufficiently established; and poor record‑keeping may explain discrepancies and point to carelessness rather than deliberate conduct.