Regulatory decisions can have a devastating, even fatal, impact on businesses, but to what extent can their effect be suspended pending appeal? That burning issue was addressed by the Supreme Court in a test case focused on the alcohol industry.
The case concerned three alcohol wholesalers whose authorisations were withdrawn by HM Revenue and Customs (HMRC) on the basis that they were not fit and proper persons to conduct such a trade. After they lodged appeals to the First-tier Tribunal, an issue arose as to whether HMRC had the power to stay its decisions pending the outcome of those proceedings.
Following HMRC’s refusal to allow the wholesalers to continue trading temporarily, the wholesalers launched judicial review proceedings – arguing that, in the absence of a stay, they would be instantly put out of business and that their appeals would be rendered futile. Those arguments achieved mixed results before the Court of Appeal and, in those circumstances, both the wholesalers and HMRC appealed further.
In ruling on the matter, the Court found unanimously that HMRC had no power – either under Section 88C of the Alcoholic Liquor Duties Act 1979 or under Section 9 of the Commissioners for Revenue and Customs Act 2005 – to permit the wholesalers to continue trading pending appeal.
Considerations of hardship and the impact on the wholesalers’ appeal rights were irrelevant to the evaluation of whether they were fit and proper persons. HMRC had concluded that they were not, regardless of any conditions that could be imposed on their trading activities. Granting temporary authorisations would give the appearance that the wholesalers were viewed as fit and proper persons, although HMRC had formed the opposite conclusion.