Diamond Jewellers Ltd v Mittal (t/a Mittal Trading Co)

Judgment

His Honour Judge Richard Seymour Q.C. :

The claimant company, Diamond Jewellers Ltd. ( “Diamond” ) was incorporated on 18 April 2002. It appears that its business was that of the buying and selling of jewellery, so far as is material to the issues in this action, gold jewellery. Diamond appears to have traded from about 1 July 2002 until about April 2008. From 1 July 2002 until 27 February 2013 the company secretary of Diamond was Mr. Chaudry Nasir Ali. His wife, Mrs. Shamim Akhtar Ali, was the sole director of Diamond from 1 October 2003 until 18 February 2013. Although the issued share capital of Diamond was £1000, divided into 1000 £1 shares, only one £1 share was ever issued. That share was transferred to Mrs. Ali on 1 October 2003 and is still held by her.

It appears that the business of Diamond ceased, for practical purposes, after the arrest of Mr. Ali and the raiding by HM Revenue and Customs of the business premises of Diamond in April 2008. Mr. Ali was subsequently convicted at Kingston-upon-Thames Crown Court on 12 December 2012 of conspiracy to cheat the public revenue and was sentenced, on 19 December 2012, to a term of imprisonment of nine years. What was alleged against Mr. Ali, in essence, was that he arranged for the purchase of gold jewellery in Dubai in the United Arab Emirates and for such jewellery to be brought by a courier to Frankfurt Airport in the Federal Republic of Germany. There he, or an associate, met the courier and brought the gold jewellery into the United Kingdom as if it had been purchased in Germany and so was not subject to Value Added Tax upon importation into the United Kingdom.

The defendant in this action, Dr. Virendra Mittal, is a general medical practitioner and practises as such in London. However, he is also a trader in wholesale gold jewellery, under the name “Mittal Trading Co.” .

Dr. Mittal has a brother, Mr. Shashi Mittal. Mr. Mittal lives in New Delhi in India. He is the owner of a gold jewellery manufacturing business in India called M/S Gold Craft International, to which business I shall refer in this judgment as “Gold Craft” . However, Mr. Mittal is also a director of a wholesale gold and jewellery business in Dubai called Mittal Jewellery DMCC ( “Mittal Dubai” ).

It was common ground that Dr. Mittal agreed, on or about 25 May 2006, to purchase from Diamond a quantity of gold jewellery ( “the May Jewellery” ) weighing 6,530 grammes for the sum of £88,308.17, inclusive of Value Added Tax.