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Tribunals adopt a two step approach to assessment appeals, looking initially at the question of best judgement and then at the amount of the assessment.

A ruling in the High Court in the case of Mohammed Hafizar Rahman (t/a Khayam Restaurant) CO 2329/97 re-examined the Tribunal’s role in looking at best judgement appeals.

In Rahman, the business appealed against an assessment for under-declared output tax on the grounds that it was not made to best judgement. »Ê¹ÚÌåÓýapp tribunal had dismissed the business’s appeal, acknowledging a small reduction to the assessment.

»Ê¹ÚÌåÓýapp High Court found no reason to criticise the tribunal’s decision on the best judgement issue but highlighted the following important issues

• that where a business successfully disputes the amount of an assessment, the assessment may be reduced, but it will rarely fail the best judgement test
• tribunals should not treat an assessment as invalid merely because they disagree as to how the judgement should have been exercised. A much stronger finding is required for example
• the assessment has been reached dishonestly, vindictively or capriciously, or
• the assessment is a spurious estimate or guess in which all elements of judgement are missing, or
• the assessment is wholly unreasonable.
• the High Court recognised the practice whereby the tribunal adopts a two step approach, looking initially at the question of best judgement and then at the amount of the assessment. »Ê¹ÚÌåÓýapp clear message of the High Court was that the Tribunal should concern itself more with the amount than best judgement.

Convincing a tribunal that an assessment has been made to best judgement is paramount, see EAIG13400.