The now defunct supermarket chain Priceclub.

The government will be appealing a court judgment barring the VAT Department from collecting about €750,000 in tax from a former director of the now defunct supermarket chain Priceclub.

The judge based his decision on a technical blunder apparently made by VAT officials.

Mr Justice Silvio Meli, sitting in the Civil Court, ruled that, according to law, when making its claim, the department had to personally notify director Christopher Gauci and not just Priceclub Operators Ltd. Since that did not happen, the department’s claim was null and void, the judge said.

Asked what action was the government contemplating in view of the sizeable amount of money involved, a spokesman said the VAT Department planned to appeal the court sentence.

When pressed to state explicitly who should shoulder the responsibility for the mistake, a Finance Ministry spokesman replied that one would have to wait for the outcome of the appeal before drawing any conclusions.

He said the ministry would review the sentence and seek legal advice on whether the law should be changed to avoid different interpretations of the legal provisions.

The case dates back to 2005, when the VAT Department initiated legal action against Mr Gauci in connection with unpaid tax.

Mr Gauci argued he was not responsible for the tax due because the department had not notified him personally but only his company. He insisted he was not the legal person that should settle the amount because the action was taken when the company had already filed for bankruptcy.

The VAT Department disagreed, but Mr Justice Meli concluded that since Mr Gauci had not been notified personally, as prescribed by law, he was not in a position to defend himself adequately.

Priceclub collapsed in 2001, leaving many creditors high and dry.

In 2013, the court found accounting firm Deloitte & Touche and its partners to have been negligent when auditing Priceclub Operators Ltd, but no damages were awarded.