THE Revenue Commissioners yesterday in the High Court agreed to pay over £1 million to a Cork company which operates as a VAT-refunding agency for tourists.

Mr Justice McCracken last week had held the Revenue was not entitled to withhold the monies from customers of Taxback Ltd, of Patrick Street, Cork.

The company yesterday offered to open a separate bank account so that 80,000 customers can receive VAT refunds on goods they bought in Ireland. The court was told the company had no objection to a Revenue officer carrying out audits on the bank account or seeing cheques.

Last week Mr Justice McCracken said VAT-refund claims which were being withheld by the Revenue were due to customers of Taxback. This followed a complaint by Taxback that the Revenue had refused to process VAT claims on behalf of 79,231 customers who had bought goods in Ireland.

Giving his judgment last week, Mr Justice McCracken had said the Revenue authorities had every reason to question the activities of the company. He was conscious of allegations that large sums of monies were being diverted by the company or its officers. The Revenue had referred the matter to the Director of Public Prosecutions.

Yesterday, Mr Dan O'Keeffe SC, for the Revenue Commissioners, said his clients were prepared to pay over VAT repayments for the periods April to December, 1996, to an independent person nominated by the Revenue who would oversee Taxback's operation of refunding all monies due to tourists.

He read a letter from solicitors acting for Taxback that the company was prepared to have the refunded VAT put into a new bank account and allow an independent person to examine the payments.

Mr O'Keeffe said the matter before court was the culmination of the Revenue's disquiet and the court's findings had endorsed that disquiet. It was appropriate there was a proper method of ensuring the refunds reached their proper destinations.

Mr James Dwyer SC, for Tax-back, said his client was perfectly agreeable if someone was put in by the Revenue. While there was a substantial amount of money involved, it was not a complex matter. Mr O'Keeffe said the entire bone fides of the company was being investigated.

Mr Justice McCracken said the Revenue had been investigating this company for a lengthy period. He was not saying it was dishonest but there reasons for the Revenue to investigate.

There was nothing proved against the company. There were ample remedies open to the Revenue if revenue fraud was established. He had found the Revenue was not entitled to hold the VAT refunds while making its inquiries.

The judge said there should be some sort of check on the refunds and an undertaking that all monies be paid into a new bank account to be used solely to pay Taxback customers. A Revenue officer would be entitled to conduct reasonable checks to ensure that refunds, less proper commission, were being paid.