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The Court of Appeal has found that Revenue acted unlawfully by failing to provide a used car importer with details of how the open market sale price for used vehicles was determined for the purpose of calculating the registration tax of vehicles (VRT).
Judge Brian Murray said the flaw meant that used car importers of Ireland (UCII) could not find out whether the Treasury’s system for valuing imported vehicles would, as a general rule, be very close to their true value, which that would affect the VRT calculation.
However, the judge said that while UCII was entitled to a finding that this breach was illegal, it was not entitled to prosper in relation to its other claims, including the refund of taxes paid, damages that UCII had calculated in 130 million euros.
He rendered judgment on behalf of the three-judge Court of Appeal on Friday on a UCII appeal against a 2013 High Court decision rejecting UCII’s claim against the Minister of Finance, Revenue and State.
It was the latest decision in a 25-year legal battle by UCII Ltd, Center Park Road, Cork, which alleged that VRT discriminated in favor of the domestic auto trade and against importers by imposing artificially high values on imported used cars.
The court will subsequently hear the submissions of the parties on what order the Court of Appeal should issue, taking into account the fact that the Superior Court did not address the question of whether Revenues had established the methodology used by it to determine the market sale price. resulting in general. in values close to its real value.
Considering the time that has elapsed since the initiation of this process and the facts to which they relate, those submissions may also address the breadth and nature of UCII’s claim on this single issue in which it was successful, the judge said.
They should also address the utility and fairness of referring this issue to Superior Court.
UCII, whose sole directors were Niall O’Dowling and Fintan Riordan, began trading in 1989 to source good quality used cars from abroad, including Japan and the EU, and sell them to other dealers and directly to the public.
UCII sold around 670 vehicles a month. Everything changed when, in January 1993, in order to ensure that no revenue was lost as a result of the opening of the EU single market, the government changed the vehicle registration system and introduced VRT.
The UCII began its legal action in 1995, but it was not until 2012, due to problems related to the discovery of documents, the case was heard in the Superior Court where it lasted 33 days.
In his judgment of the Court of Appeals, Judge Murray said that there was an obligation on the part of the Treasury to make public a policy of the type in question in this case.
In this regard, it attached some importance to Revenue’s failure to respond to inquiries raised in the 1994 UCII correspondence and Revenue’s adherence to an apparently deliberate policy of non-disclosure of depreciation schedules that was illegal.
However, he said that UCII is wrong in stating that Revenue was required to take into account the price obtained from the sale of a vehicle to determine the open market price of that vehicle.
UCII was also wrong in its argument that there was a fundamental conflict in the tests between its expert and those of the Treasury regarding the role of the depreciation of the vehicle tables in the methodology used.
The High Court’s conclusion, that the challenge to the rationality of that methodology failed, was based on the assessments provided in the Industry Auto Sales Guide, that the guide was a reasonable benchmark for this purpose, and that UCII it had failed to establish that its application consistently overpriced vehicles.
The UCII has not established that the Superior Court erred in any of these findings and followed its challenge on grounds of irrationality which had to rule, it said.
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