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Little chance of success

01 June 2012
Issue: 4356 / Categories: Tax cases , Admin , VAT
Defty and another v Hirani, Chancery Division

The defendant's company was incorporated in 2002 and registered for VAT.

HMRC found the business had unpaid VAT and had wrongly deducted input tax. The department petitioned for a compulsory winding-up. A pre-judgment freezing order was served on the defendant and in May 2010 the company was wound up.

The defendant's solicitors were served with claims that alleged the defendant had acted in breach of his duties as a director traded while insolvent had destroyed records and failed to account for VAT.

In April 2011 default judgment was entered and the freezing order continued as a post-judgment order.

The defendant applied to have the default judgment set aside on the basis computer records had been withheld and he was entitled to deny the allegations of fraud on oath during a trial.

The High Court judge said no useful purpose could be served by setting aside...

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