Advance tax clearances depend on full disclosure and proper authority; withheld facts can make revocation lawful.

Advance tax clearances can create a legitimate expectation only where the taxpayer has made full and frank disclosure of all material facts and obtained the assurance from an officer with authority to give it. That protection does not arise where material information is withheld or the clearance is sought in a complex scheme contrary to central revenue policy. On the facts described, the taxpayers did not place the real purchase price and payment structure squarely before the inspector, so the clearances were not entitled to be treated as binding and their revocation was not an abuse of power.

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Issues: Whether the Inland Revenue was entitled to revoke advance tax clearances given by a local inspector, and whether the taxpayers had made full disclosure so that reliance on the clearances would make revocation unfair or an abuse of power.

Analysis: Advance clearances may, in limited circumstances, create an abuse of power if the taxpayer has fully and frankly disclosed all material facts and has relied on an assurance given by the revenue. That protection does not arise where the taxpayer withholds information material to the fiscal consequences of the transaction or seeks clearance from an without authority in a complex scheme that the revenue has indicated must be handled centrally. The scheme in question involved a put option, a local clearance contrary to the revenue's stated central policy, and material facts not placed squarely before the inspector, including the real purchase price and the structure of the circular payments. On that basis, the clearances were obtained without the full disclosure required for fairness to arise.

Conclusion: The revocation of the clearances was not unfair and did not amount to an abuse of power; the Revenue was entitled to withdraw from the earlier assurances.

Final Conclusion: The appeal failed because the advance clearances were not binding in the circumstances, and the Revenue was free to assess the scheme according to the fiscal legislation.

Ratio Decidendi: A taxpayer can rely on an advance revenue assurance only where all material facts are fully disclosed and the assurance is obtained from an with authority to give it; absent those conditions, revocation of the assurance is not an abuse of power.

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