Thursday 19 April 2018

Car salesman found guilty of filing incorrect tax returns has conviction quashed

Ruaidhrí Giblin

A car salesman found guilty of filing incorrect tax returns has had his conviction quashed on appeal.

Gerard Mounsey (47), of Knockshegowna, Ballingarry, Nenagh, Tipperary, had pleaded not guilty at Clonmel Circuit Criminal Court to eight counts of knowingly or willfully delivering incorrect income tax returns relating to the years 2003 to 2009 inclusive.

The 47-year-old senior car salesman was acquitted on one count but unanimously found guilty on the remaining seven by a jury. He was given a suspended 18 month prison sentence and fined €10,000 by Judge Tom O'Donnell on January 13 2014.

Mounsey successfully appealed his conviction today with the three-judge Court of Appeal stating that his conviction cannot be allowed to stand and must be quashed.

In its judgment delivered today, Mr Justice George Birmingham said Mounsey had been employed by Lyons of Limerick motor dealers since 1988 when he started as a mechanic before converting to a salesman position.

At the time of the events, he was the senior salesman in the Nenagh branch.

On foot of search warrants obtained in July 2010, gardaí attached to the Criminal Assets Bureau found documents in Mounsey's place of work which showed the sale of cars to an entity described as 'Tom Ryan Car Sales' – an entity that did not exist.

Follow up enquiries indicated that the cars had been sold to various other individuals, the judgment stated.

In March 2011, he was arrested on suspicion of having committed the offence of making a gain by deception.

After Mounsey was interviewed three times, the basis for his detention was changed so as to permit the questioning of him for offences contrary to section 1078 of the Taxes Consolidation Act 1997.

He was then interviewed by gardaí and Revenue officers attached to CAB.

After his release, notices of assessment were served on Mounsey indicating that there was a tax liability for the period 2002 to 2009 of €485,000 before penalties, the judgment stated.

Up to then, Mounsey had made returns of approximately €16,000 for 2003 to 2009. It seems he had not delivered a return of income tax at that stage for the year 2002, the judgment stated.

In response, Mounsey made a return for 2002 and revised returns for the years 2003 to 2009. These indicated an additional tax liability of just under €33,000 and this was discharged in April 2011, the judgment stated.

Then on October 28 2011, in the context of an appeal to the Tax Commissioners, a further set of returns were furnished which suggested a tax liability of almost €60,000, according to the judgment.

Mr Justice Birmingham said an issue of central significance to the trial were tax assessments and returns. However, Mounsey's tax liability for the years in question had not been “finally determined at the time of trial and that remains the situation to the present day”.

Mr Justice Birmingham said an unnamed Revenue official, referred to as RB042 at trial, gave evidence of assessments that were raised by him following an investigation into Mounsey's tax affairs.

The defence successfully sought disclosure of the basis on which the assessments raised by RB042 were reached and then objected to the assessments being put into evidence on the basis that they were a form of “opinion evidence”.

The trial judge's comment that this was “not a run-of-the-mill prosecution” but a case under the Tax Code gave rise to concern that he saw this as some form of hybrid case where the usual rules of disclosure in criminal cases did not apply, Mr Justice Birmingham said.

At trial there was “at least a limited retreat from the assessments” and for the defence to be “spancelled” in engaging with the issue was “unsatisfactory”, Mr Justice Birmingham said.

Furthermore, Mousney was originally arrested on suspicion of having made a gain by deception and was then detained under section 4 of the Criminal Justice Act 1984.

Mr Justice Birmingham said the challenge to the continued detention and to the fruits of the detention was well founded.

Accordingly, Mr Justice Birmingham, who sat with Mr Justice Garrett Sheehan and Mr Justice Alan Mahon, quashed the conviction.

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