When Marks and Spencer litigate they go for the long haul.
In 1994 they extracted a concession from the British Revenue authorities that their “Teacake� was a cake and not a biscuit. Tax had been paid on the Teacakes, at the biscuit rate rather than the cake rate, from 1973 to 1995. M & S calculated the difference in the sum of £3.5 million and asked for its refund.
The Revenue said no; it would pay £88,440. Well, that made life easy for the lawyers for M & S; no dilemmas of judgement for them.
M & S took the case to the House of Lords and from there to the European Court of Justice. Now, the ECJ Advocate-General has supported M & S. The British Revenue argued that M & S had passed the tax on to the consumers and were not at a loss of the claimed £3.5 million. To give it to them would be “unjust enrichment�. The Advocate-General disagreed because the Revenue did not universally apply that principle across the tax code.
Where the Advocate-General goes the ECJ usually follows.
That Teacake is a dagger in the heart of Judicial Review.
In the first instance, the M & S “tax account� goes back for more than twenty years. Whither the Statute of Limitations?
In the second instance, where is the notion of “administrative certainty�? One of the mantras justifying the contraints on challenging State action, as applied in Judicial Review, is the alleged and presumed need for certainty in the making of administrative decisions. The notion runs, that it would be intolerable for administrative action to proceed and then be challenged at any time in the future. In Ireland, under Order 84 of the Rules of the Superior Courts, it is incumbent on an applicant that such a challenge be made as soon as possible and not later than 3 months after the impugned decision (or 6 months if seeking Certiorari).
Of course what is really revealed is the unsustainability of the assertion that State action should be beyond challenge (generally) with the passage of time. It should in fact be otherwise; many challenges can be launched only belatedly because the relevant facts are buried in the State bureaucracy and come to light very late.
This brings to mind the United Biscuits/McVities case (Case reference is: United Biscuits (LON/91/0160).) in the UK where HMRC (in between bouts of losing confidential information one must assume) attempted to change the VAT treatment of Jaffa Cakes.
The Appeals Tribunal held in favour of United Biscuits for reasons which included the fact that jaffa cakes go hard when stale where as biscuits go soft. Among the ploys used in arguing the case was the production of a giant jaffa cake to illustrate clearly the cake-like nature of the baked goods. How I would have loved to have been there that day to see that line of discourse… …with a suitably oversized mug of coffee of course.