“ ¼ ‘both the input tax and output tax were accurately entered in our account and the liability declared in our audited and published accounts;’ and ‘The reason that the returns were not sent on time was not through dishonesty, but because we were quit (sic) unable to pay the amounts as they became due. We do not consider that it was dishonest not to pay when we were constanly (sic) faced with our customers failing to pay us’. To those statements, Mr R Edley, Bourne’s accountant who appeared to represent it, made the following additional submissions in support of Bourne’s claims not to have dishonestly evaded the tax upon which the penalty under appeal had been calculated. He maintained that Mr Charlton is an honest person who finds the word ‘dishonest’ ‘quite repugnant’. He further submitted that the VAT which had not been paid had been applied in paying Bourne’s other debts in order to keep its business going, ¼ He submitted that the company should be given some credit for the fact that it had paid all the tax centrally assessed on it, and it should be borne in mind that throughout it had never been approached by the Commissioners on the basis, ‘Do you have problems: can we help?’ Finally, Mr Edley maintained that Bourne had never made a conscious decision to pay centrally issued assessments because they were made in sums less than its true liability in the various periods to which they relate.”
“In determining whether the prosecution has proved that the defendant was acting dishonestly, a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards that is the end of the matter and the prosecution fails. If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest. In most cases, where the actions are obviously dishonest by ordinary standards, there will be no doubt about it. It will be obvious that the defendant himself knew that he was acting dishonestly. It is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did. For example Robin Hood or those ardent anti-vivisectionists who remove animals from vivisection laboratories are acting dishonestly, even though they may consider themselves to be morally justified in doing what they do, because they know that ordinary people would consider these actions to be dishonest.”
“ ¼ for a period of approaching two years Bourne made no VAT returns at all, but paid tax which was assessed on it centrally as a result of its not having done so. It was not that Bourne did not know its true liability because, e.g. its books and records were incomplete: on the contrary, the evidence shows that throughout its records were maintained impeccably, so that it knew that throughout the period in question it was underpaying the tax due from it. That it should claim, as it did, that because those records were properly maintained it was not intending to be dishonest is perhaps the most disingenuous of the arguments advanced before us. It follows that it is one which we entirely reject.”
“We then turn to the question of whether Bourne ‘for the purpose of evading VAT’ did any act or omitted to take any action. Bourne collected the tax due to the Commissioners from its customers, and knew that it should have accounted to them for it, less any input tax entitlement, on a quarterly basis, and, knowing that the tax due had got to be paid, took no steps to pay its true liability. That involved a deliberate decision by those responsible for the running of the company not to make returns and pay the tax due under them. We regard that as clear a case as one could imagine of a person ‘omitting to take any action’. We are driven to the conclusion, and hold, that that decision was intended to enable the company to evade tax. ¼ We are also satisfied, and hold, that by the ordinary standards of reasonable and honest people, Bourne acted dishonestly. Its course of conduct with regard to the matters with which we are dealing over a period extending towards two years speaks for itself.”