The tax inspector in charge of the case against Independent TD Michael Lowry has accepted that he never met the politician to discuss the investigation against him.
It is the State’s case that Mr Lowry’s company, Garuda Ltd, received £248,624 (€372,000) in commission from Norpe OY, a refrigeration company based in Finland, in August 2002.
It is alleged that Mr Lowry arranged for this payment to be made to a third party, Kevin Phelan, residing in the Isle of Man, and therefore it didn't appear in the company accounts for that year, nor did he declare it as income. It is further alleged the accounts were then falsified in 2007 to reflect that the payment was received in 2006.
Tim Lester, a tax inspector, who headed up the criminal prosecution against Mr Lowry and Garuda, agreed with Michael O'Higgins SC, defending the TD, that attempts were made to meet his client to conduct an interview.
He accepted that a number of attempts were made and Mr Lowry suggested potential dates for meeting but he ultimately never questioned him.
Mr Lester said that once the investigation commenced and summons had been issued, he was advised he should not interview Mr Lowry.
He confirmed the file was sent to the Director of Public Prosecutions on September 30th, 2013, and a supplementary report was submitted on November 14th, 2013. Mr Lester confirmed that an individual’s obligation to pay tax arises when money is earned.
No documentation
He accepted a suggestion from Mr O’Higgins that the prosecution “are not in a position” to show when the commission of €372,000 was accrued and agreed that there is no documentation to reflect the receipt of the €372,000.
Mr O’Higgins said he accepted that if documents were missing, “it does not absolve an obligation to pay tax” but added that with no invoice relevant to the payment “it is impossible to determine when the money is earned”.
Mr Lester agreed with Patrick Treacy SC, defending Garuda, that an unsigned CT1 (corporation tax) form was submitted to Revenue on October 3rd, 2003, and later processed. He accepted that a faxed copy of this CT1 form, signed by Mr Lowry, and sent by his company to his accountants, BBT, on October 2nd, 2003, was an exhibit in the case.
Mr Lester agreed that Garuda is not charged with filing incorrect corporation tax for 2002, rather it is charged with filing an incorrect corporation tax for 2006.
In re-examination by Remy Farrell SC, prosecuting, Mr Lester confirmed that he carried out inquiries as to what happened when the €372,000 left Norpe OY.
He identified a “deposit advice” from a bank on the Isle of Man that showed £248,624 was received by the Glebe Trust by order of Norpe OY.
Incorrect tax returns
Mr Lester identified a letter dated November 2nd, 2010, and addressed to a K Phelan of Omagh, in Tyrone, asking Mr Phelan to confirm the relationship he had with Norpe OY and inquiring as to why £248,624 was paid into the Glebe Trust by Norpe.
Mr Lowry (64), of Glenreigh, Holycross, Co Tipperary, has pleaded not guilty at Dublin Circuit Criminal Court to four charges of filing incorrect tax returns on dates between August 2002 and August 2007 in relation to a sum of £248,624 received by his company, Garuda Ltd, and one charge in relation to failing to keep a proper set of accounts on dates between August 28th, 2002, and August 3rd, 2007.
He further pleaded not guilty on behalf of Garuda Ltd to three similar charges in relation to the company’s tax affairs and one charge of failing to keep a proper set of accounts on the same dates.
The prosecution has closed its case before Judge Martin Nolan and the trial continued in legal argument in the absence of the jury of eight men and three women.