SUMMARY

DRAFT 
19522
MANCHESTER TRIBUNAL CENTRE

 
 	
	DR KARTIK CHANDRA RAY	Appellant

	- and -

THE COMMISSIONERS FOR
	HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

				Tribunal:	Lady Mitting (Chairman)

						

Sitting in public in Birmingham on 2 February 2006
The Appellant appeared in person 

Bernard Haley, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents 

	© CROWN COPYRIGHT 2006

DECISION

1.	The Appellant, Dr Ray, had lodged an appeal dated 26 July 2005.  I was told that the issue under appeal was the refusal of the Respondents to allow Dr Ray to reclaim the input tax, which he had incurred on the building of a new surgery.
2.	The Grounds of appeal, contained in the Notice of Appeal read as follows: 
“the three companies run by me and I claimed VAT back what I paid to different companies which was advised to me by one officer.  But the subsequent officer who came to investigate did not honour what was advised by the previous officer”
3.	On receipt of the Notice of Appeal, the Respondents applied for the appeal to be struck out on the grounds that the appellant was appealing against a misdirection, which was not an appealable matter. 
4.	I was told by Mr Haley that Dr Ray had at one time run a holistic therapy practice in addition to his GP practice.
5.	He had built a new surgery and the input tax reclaimed was that which was incurred in this building.  It was the understanding of the Respondents that by the time the new surgery came to be built, the holistic practice had ceased leaving only the conventional GP practice.  The supply of holistic medicine would have been a standard rated supply but that of his GP practice an exempt supply.   As it was the respondents belief that the standard rated supplies had ceased before the building was started and the purpose of the new building was only to make exempt supplies, they had refused to allow the recovery of input tax.
6.	I was told nothing about the visits of the two officers beyond being told by Dr Ray, that the first officer had told him that input tax would be recoverable and the second officer that it would not be.   Dr Ray had proceeded with the building and believing that input tax was recoverable.   Dr Ray also told me that it was incorrect that his holistic practice had ceased when the surgery was built.  Not only was his holistic practice still in existence at the time but the new surgery was built for both elements of the practice.
7.	I accept that Respondents’ contention that a misdirection is not an appealable issue and had that been the only matter for my consideration then I would have allowed the Respondents’ application that the appeal be struck out.  However, even though not formerly pleaded in the Notice of Appeal, it did appear to me that, subject of course to proof, Dr Ray did have a reasonable chance of recovering some element of his input tax.  For this reason alone therefore I concluded that it was not appropriate to strike out the appeal but that the appeal should be allowed to continue. 
8.	Mr Haley made no application that the grounds of appeal should be amended and I understood that the Respondents had sufficient information to settle their Statement of Case.  
9.	Although forming no part of my direction, I did advise Dr Ray that he would have to prove his entitlement to input tax and would have to produce evidence of the continuation of his holistic practice, complete with dates. 

LADY MITTING 
CHAIRMAN
Release Date: 4 April 2006
MAN/06/0003