A Dublin street trader was given leave by the High Court yesterday to challenge the constitutionality of proceedings against him by the Criminal Assets Bureau seeking judgment of almost £400,000 in alleged unpaid taxes.
Mr John Kelly, with an address at The Belfry, Inchicore Road, Kilmainham, is claiming the proceedings under the tax acts seeking judgment against him in the sum of £378,522 are unconstitutional because he was unable to exercise his right to appeal that August 1997 tax assessment as the CAB had previously - in May 1997 - secured an interim order against him freezing his assets.
Because of the freezing order, granted under Section 2 of the Proceeds of Crime Act, 1996, Mr Kelly, who denies he owes the amount stated in the tax assessment, says he has no access to monies to pay any tax.
Section 9.3.3 of the 1997 Taxes Consolidation Act provides that a person who receives a notice of assessment of taxes due must submit a return and payment of any tax which they believe is due within 30 days of the assessment. If that is not done, the person is deemed to have no valid appeal.
Section 2 of the POCA provides that the CAB may apply for an order to freeze a person's assets if it is satisfied those assets derive directly or indirectly from the proceeds of crime.
The CAB's application for summary judgment against Mr Kelly was listed for hearing yesterday, but at the outset Mr Paddy Hunt, for Mr Kelly, applied for an adjournment on the grounds that he wished to await the outcome of criminal proceedings against Mr Kelly and because he wished to raise the constitutional issue.
The adjournment was resisted by Ms Grainne Clohessy, for the CAB, who argued that Mr Kelly had no locus standi to raise the constitutional issue.
After hearing arguments from both sides, Mr Justice O'Higgins said he would grant the adjournment to allow Mr Kelly argue the constitutional issue.
He said Mr Kelly was arguing that he was precluded from appealing the tax assessment within the 30-day period because of the order previously granted under Section 2 of the POCA freezing his assets.
The judge said a person seeking to challenge the constitutionality of a provision must be able to claim his or her interest had been, or was likely to be, adversely affected by the operation of that provision. It was clear Mr Kelly was in that position.
To have locus standi, a person must also show they had exhausted all other remedies, the judge added. In this case, Mr Kelly was subject to a Section 2 order and the CAB had argued that, because he did not seek to discharge it, he had failed to exhaust the remedies available to him and had no locus standi to take a constitutional challenge.
While it was true Mr Kelly did not seek to apply to discharge the Section 2 order, the practicalities of the situation and the time available to him meant it seemed very unlikely he would have been successful, had he done so.
It seemed the earliest time Mr Kelly could have moved to discharge the order was August 5th, 1997, the date the tax assessment was made. This was a time when the courts were on vacation and the onus of proof would also have been on Mr Kelly to establish the monies sought were not the proceeds of crime. Practically, Mr Kelly could not have been realistically advised by lawyers that he could apply to discharge the order and have a realistic chance of success.
In those circumstances, it would be unfair to shut Mr Kelly out from raising the constitutional point because of his theoretical failure to explore other avenues, the judge said.
He said the Attorney General would have to be joined as a notice party to the proceedings.