Dunnes granted permission to challenge tax assessment

Dunnes Stores has been granted permission by the High Court to challenge a tax assessment of €36.4m arising out of the plastic bag levy.

In addition Dunnes claim that the definition of a plastic bag in regulations governing the levy is so uncertain that the regulations themselves are invalid.

The Revenue Commissioners have served Dunnes with an assessment for its use of plastic bags, due over a four-year accounting period, which the company argues are not subject to the Government levy.

The supermarket chain is seeking to bring judicial review proceedings against Revenue, the Minister for the Environment and Local Government, Ireland and the Attorney General that are aimed at quashing the assessment.

At the High Court today leave to bring the proceedings was granted by Mr. Justice Michael Peart. The Judge, in granting a stay preventing Revenue from taking any steps on foot of the assessments until the matter had been concluded, made the proceedings returnable to a date in February.

In their proceedings Dunnes are seeking orders quashing the assessments of the levy due in respect of the accounting periods of July 2004 to June 2005, July 2005 to June 2006, July 2006 to June 2007 and July 2007 to June 2008 and made under the Waste Management (Environmental Levy Plastic Bag) Regulations of 2001.

They are also seeking a number of declarations including that the 2001 regulations concerning the Plastic bag levy are invalid and of no legal effect, and that the applicants are acting in breach of natural justice and fair procedure by refusing to provide Dunnes with details for the basis of the assessment.

Dunnes are also a declaration that any levy imposed under the Waste Management Act 2001 can only apply to plastic bags which are suitable for use by customers at the point of sale, and not to other forms of plastic bags used for wrapping or hygiene.

The company is further seeking orders retraining Revenue from making any further assessments of any levy due by Dunnes Stores in respect of any accounting period.

In an ex parte (one side only application) Paul Sreenan SC for Dunnes Stores said that last November his client received a total of four assessments totalling some €36.4m from Revenue who had claimed that the levies due for plastic bags had not been collected.

Counsel said that the company did not accept these assessments. Counsel said that the plastic bags in which those assessments were made "were not subject to the levy." The plastic bags in question, counsel said, were used in the company's stores in Northern Ireland and used for other purposes.

Counsel said that it sought to appeal those assessments, but issues that Dunnes seek to raise are not covered in the appeal process and can only be dealt with by way of judicial review.

Counsel added that Dunnes Stores have always been and remain a strong supporter of the plastic bag levy.