Sub-section (5) of Section forty-five of the principal Act (which allows an appeal against an assessment of Excess Profits Duty) shall apply as respects the determination by the Commissioners of Inland Revenue of the amount of any deficiencies or losses in respect of which a person carrying on a trade or business is entitled to a repayment of or a set-off against Excess Profits Duty as it applies to the amount of an assessment made upon him by the said Commissioners.
I beg to move, at the end of the Clause, to add the words
and an appeal under this Section in respect of a past accounting period shall not be disallowed by reason of the provisions of Rule 5 of the Excess Profits Duty Regulations, dated the sixth day of January, nineteen hundred and sixteen.
This Amendment is even more legal than the last one, and I wish to inform the Solicitor-General that it has been suggested to me by one of the most eminent counsel at the Bar, as it is feared that the cases affected will not be met by the Clause as it now stands. The original
Act of 1915 gave the taxpayer the right of appeal against any assessment of Excess Profits Duty made upon him, but failed to give him the right of appeal if a claim by him for a repayment or set-off were disallowed in whole or in part by the Inland Revenue. In Clause 28 the Chancellor is giving the taxpayer the right of appeal in such cases. It appears, however, in a number of cases that, unless the words contained in the Amendment are added, the right may be ineffective.
There are two kinds of cases to be dealt with. There is the trade or business which has paid Excess Profits Duty, and, in a subsequent accounting period, shows a deficiency, and therefore claims the repayment of Excess Profits Duty already paid. The right of appeal in such a case is fully covered in this Clause. On the other hand, there is a trade or business which did badly in the early part of the War, and was able to set-off against its subsequent liability to Excess Profits Duty the deficiency of duty in the earlier accounting period, or periods. When an assessment in such circumstances was made upon it, it would be arrived at by deducting from the Excess Profits Duty already payable the amount of set-off which it had claimed in respect of the earlier periods. The owner of the business could, under Rule 5 of the Excess Profits Duty Regulations, of 6th January, 1916, which states that any appeal against the assessment shall be made within 30 days, lodge an appeal. I submit to the Solicitor-General that unless the words of the Amendment are added to the Clause, Rule 5 may be held to apply in such cases, and the taxpayer would lose his right of appeal, under Clause 28, against the amount of set-off which was allowed to him in respect of the early accounting period.
The view that I and those who advise me take with regard to the proposal of my hon. Friend is that it is unnecessary, and that, as the law at present stands, there is no impediment to an appeal against the set-off. The Rule reads thus:
Any person dissatisfied with the amount of any assessment made upon him may at any time within thirty days from the date of the service of notice of assessment, or
within such further time as the Commissioners of Inland Revenue may allow, give notice to the Surveyor of Taxes named in the notice of assessment of his intention to appeal against the amount of the assessment.
The way in which that rule works at the present time is that the Commissioners can extend indefinitely the time in which appeals can be lodged. There is a provision in Section 39 of the Finance Act, 1921, which states that
repayments and adjustments of Excess Profits Duty may be obtained and made.…at any time as the case mar require, unless and until Parliament otherwise determines.
The Commissioners of Inland Revenue have always taken the view that this provision entitles the taxpayer to give notice of appeal at any time, and it cancels the limitation of time in dealing with Excess Profits Duty. Therefore, the hon. Gentleman may rest assured that under Clause 28 there is no intention to limit the time in which appeals may be made.
I daresay the Chancellor of Exchequer is right. He has, of course, all the advantage of official advice, but it certainly seems an odd thing. I understand his point to be that, prima facie, the words of Rule 5 might be held to debar the taxpayer from the advantage of this Clause, but that there are two protections for him. In the first place, the Commissioners can extend the time if they like, and by another Section of some other Act of Parliament—-I do not quite know what it is—
—this very Regulation is abolished. That is; a most astounding view. Here is a Regulation, dealing with Excess Profits Duty, and the right hon. Gentleman says that, notwithstanding its existence, it is in fact repealed by a Section of the Act dealing with the Excess Profits Duty. Surely, unless I have misunderstood the right hon. Gentleman, there must be some mistake. As to the power of the Commissioners to extend the time, that, of course, though it does not give the man a right of appeal, gives him a right of appeal dependent on the extension by the Commissioners, which is a very different thing. As I say, I may have misunderstood the Chan- cellor of Exchequer, but as I understood him it does not appear to be a very complete answer.