Ramiz Uddin T/a Diwan-e-am Restaurant v Her Majesty's Revenue & Customs

Facts

Ramiz Uddin traded as the Diwan-E-Am, an Indian restaurant in Croydon, and had been registered for VAT from 20 November 1995. Daily takings were recorded from duplicate meal slips, totalled by staff, entered in a loose-leaf book and passed to an accountant who prepared the returns, which the appellant signed. Customs officers made test purchases and kept observations at the restaurant on dates in September 1996, November 1999, February 2000 and June 2000, and removed the records on several occasions. Comparison showed that test purchase bills and numerous observed customer meals had not been recorded, that tear-off receipt slips found on the premises did not appear in the books, and that purchase invoices from I & M Wines, some on an unexplained cash account, had been excluded. On 12 November 2000 officers supervised the cashing-up: the takings of £457.20 were the highest Sunday figure in fourteen weeks and 108 per cent above the average. The appellant was interviewed twice, in April and May 2001. Customs assessed arrears under section 73(1) of the Value Added Tax Act 1994, the figure being revised twice to £49,996, and imposed a dishonesty penalty under section 60(1) of the Value Added Tax Act 1994, reduced to £44,996 after 10 per cent mitigation. He appealed against both.