(1)Where—
(a)at any time before 4th December 1996, any person (“the taxpayer”) became liable to pay any sum (“the relevant sum”) to the Commissioners by way of VAT, penalty, interest or surcharge,
(b)at any time on or after 18th July 1996 and before 4th December 1996 an amount was set against the whole or any part of the relevant sum,
(c)the amount set against that sum was an amount which is treated under section 47 above as not having been due from the Commissioners at the time when it was set against that sum, and
(d)as a consequence, the taxpayer’s liability to pay the whole or a part of the relevant sum falls to be treated as not having been discharged in accordance with section 81(3) of the 1994 Act,
the Commissioners may, to the best of their judgement, assess the amount of the continuing liability of the taxpayer and notify it to him.
(2)In subsection (1) above the reference to the continuing liability of the taxpayer is a reference to so much of the liability to pay the relevant sum as—
(a)would have been discharged if the amount mentioned in subsection (1)(b) above had been required to be set against the relevant sum in accordance with section 81(3) of the 1994 Act, but
(b)falls, by virtue of section 47 above, to be treated as not having been discharged in accordance with section 81(3) of that Act.
(3)The taxpayer’s only liabilities under the 1994 Act in respect of his failure, on or after the time mentioned in subsection (1)(b) above, to pay an amount assessable under this section shall be—
(a)his liability to be assessed for that amount under this section; and
(b)liabilities arising under the following provisions of this section.
(4)Subsections (2) to (8) of section 78A of the 1994 Act apply in the case of an assessment under subsection (1) above as they apply in the case of an assessment under section 78A(1) of that Act.
(5)The 1994 Act shall have effect as if the matters specified in section 83 of that Act (matters subject to appeal) included an assessment under this section and the amount of such an assessment.
(6)Nothing contained in—
(a)any regulations under section 25(1) of, or paragraph 2 of Schedule 11 to, the 1994 Act relating to the correction of errors or the making of adjustments, or
(b)any requirement imposed under any such regulations,
shall be taken, in relation to any time on or after 18th July 1996, to have conferred on any person any entitlement, otherwise than in accordance with section 81(3) of that Act, to set any amount, as an amount due from the Commissioners, against any sum which that person was liable to pay to the Commissioners by way of VAT, penalty, interest or surcharge.
(7)In this section—
“the 1994 Act” means the M1Value Added Tax Act 1994; and
“the Commissioners” means the Commissioners of Customs and Excise.
(8)This section shall be deemed to have come into force on 4th December 1996.
(9)Where at any time on or after 4th December 1996 and before the day on which this Act is passed any assessment corresponding to an assessment under this section was made under a resolution of the House of Commons having effect in accordance with the provisions of the M2Provisional Collection of Taxes Act 1968, this section has effect, on and after the day on which this Act is passed, as if that assessment were an assessment under this section and as if any appeal brought under that resolution had been brought under this section.