The companies operated landfill sites by charging customers for all unwanted material deposited into large cells in the ground. By section 40(1)(2)(a) of the Finance Act 1996 tax was charged on each tonne of taxable waste as “a disposal of material as waste”. Pursuant to section 64(1) of the Act as in force at the relevant time, such a disposal occurred when the person made the disposal “with the intention of discarding the material”. The revenue maintained in both cases that the landfill site operators’ depositing of certain black bag waste material in the cells was not for the purposes contended by the operators but amounted to a disposal of the material as waste and was therefore taxable as such. The revenue dismissed claims by the operators for both repayment of landfill tax and to tax assessments covering various periods between November 2006 and December 2013. The First-tier Tribunal (Tax Chamber) dismissed the operators’ appeals having held that the waste disposals were taxable. In allowing the operators’ further appeal, the Upper Tribunal (Tax and Chancery Chamber) held that the waste was not taxable because the operators did not intend to discard it.
On the revenue’s appeal—
Held, appeal allowed. It could not be said that any kind of use of the waste material necessarily ruled out an intention to “discard” it within the meaning of section 64(1) of the Finance Act 1996. Various factors might need to be weighed up, depending on the circumstances of the case, when considering both who was the relevant disposer and his intention at that time as to whether Parliament intended the activity to be classified as an intention to discard the material under section 40(2)(a) of the Act. It was important to focus on the wording of the legislation in question and not become distracted by too close an analysis of individual words in previous case authority or by applying those judgments rather than the wording of the legislation. While synonyms and antonyms could be helpful, they should not divert attention from construing the word “discard” in its context in the legislation. “Discard” was an ordinary English word and there was no reason to give it a special meaning in the absence of any statutory definition although the context was important when considering its scope in the current particular context as a question of fact. The relevant statutory language was silent on the word “use”, which did not feature in any of the relevant provisions. The pertinent questions were whether the operator intended to discard the waste and, if there was no reason to think that they did not achieve what they intended, whether they had discarded it. The First-tier Tribunal, in applying the relevant statutory provisions, both correctly asked whether the operators intended to discard the waste material and held that they did so intend, with the consequence that all of the disposals were taxable given that it was accepted that the remaining conditions of section 40(2) were satisfied. Accordingly, the Upper Tribunal fell into error in holding otherwise (paras 53, 54, 56, 57, 60, 61, 63–65, 70, 80–85, 94, 95).
Per Rose and Nugee LJJ. While the citation of previous authority is an essential part of the litigation process and the court’s decision-making processes would be immeasurably poorer without it, considerable care needs to be taken so that proper use can be made of prior authority so as to avoid treating every statement made by a judge in a binding authority when giving the reasoning of the court as laying down a principle of law (paras 71, 86–89).
Melanie Hall QC, Brendan McGurk and David Gregory (instructed by Treasury Solicitor) for the revenue.
Roderick Cordara QC and Zizhen Yang (instructed by KPMG LLP) for the first respondent in the first appeal and (instructed by Ernst & Young LLP) for the second respondent in the first appeal and for the respondent in the second appeal.
Sam Grodzinski QC (instructed by Simmons and Simmons LLP) for the third and fourth respondents in the first appeal.