High Court challenge to CAB's tax move on Scot

Lawyers for a man alleged to have tax liabilities of around £300,000 asked the High Court yesterday to dismiss proceedings against him by the Criminal Assets Bureau.

Mr Lindsay Craft (28), from Scotland, with an address at Clonkeen, Westport Road, Castlebar, Co Mayo, came from Scotland to Castlebar in 1994 where he set up a windscreen-fitting business. He was arrested by the CAB last May.

In an affidavit from a CAB officer presented to a previous court hearing, it was stated Mr Craft's alleged tax liabilities followed an investigation by the CAB into his assets "which derive or are suspected to derive directly or indirectly from criminal activity".

It was also stated Mr Craft has a number of criminal convictions in Scotland including for assault, theft and supply of drugs, and that he is wanted by the Scottish authorities to serve a six-month sentence imposed in 1993 for the supply of amphetamine.

The CAB officer stated his belief, based on confidential information the source of which he did not wish to reveal, that since arriving in Ireland, Mr Craft had been involved in trafficking cocaine and cannabis.

Mr Craft was arrested by a CAB officer on May 7th last. Prior to his release on the night of May 8th, proceedings against him were begun, based on an assessment for income tax and VAT made the previous day for about £300,000. Also on May 8th, the CAB secured an order freezing assets - a Mareva order - to prevent him and his partner, Ms Claire McWatt, from dealing with specified assets and from reducing their assets in the State below £170,000.

Statutory demands for payment of the assessed tax liabilities of almost £300,000 were issued by the CAB on June 9th demanding immediate payment of the monies and stating if immediate payment was not made, the bureau intended to enforce recovery without further notice.

In the High Court yesterday, Dr Michael Forde, for Mr Craft, asked the court to deal with preliminary issues. Counsel said if the court ruled in his favour on those points, the proceedings against Mr Craft must be dismissed.

Mr Richard Law Nesbitt SC, for the CAB, disagreed with this.

Mr Justice O'Higgins allowed Dr Forde proceed on two preliminary issues. The first was whether there was a cause of action in existence against Mr Craft on May 8th, 1998, in view of the fact that the assessment for tax was made the previous day, and the statutory demand for payment of that tax was not made until June 9th, 1998.

The second issue was whether, if the court found there was a cause of action existing on May 8th, the court had any jurisdiction to grant the Mareva order which was granted to the CAB on May 8th.

Dr Forde said even if there was a cause of action against Mr Craft, the High Court had no jurisdiction to make the Mareva order granted on May 8th, 1998, and that order should be vacated.

The hearing resumes on November 5th.