A building company which claims to employ 220 people and which accepts it owes some €2.5 million in unpaid taxes to the Revenue Commissioners has lost a High Court application to stop the Revenue implementing "draconian" measures against it which, the company claimed yesterday would lead to it going out of business before this weekend.

PSK Construction Ltd had sought an injunction requiring the Revenue to reverse measures implemented against the company on February 8th last, which included withdrawing the company's C2 tax certificate and issuing notices which have the effect of instructing some of the company's major debtors to pay any monies owed to the company directly to the Revenue.

The injunction application was strongly resisted by the Revenue but, during the hearing yesterday, Ms Justice Mary Laffoy asked the sides, in light of the "serious fallout" for the company and its workers if the injunction was refused, to see whether some arrangement might be reached between them.

The judge said the debt was clearly due to the Revenue and the court had to take a serious view of it but perhaps, she suggested, the parties could see if there could be an accommodation that would enable the Revenue not to enforce the attachment notices issued to some of the company's creditors and its bank.

However, after a short adjournment, counsel for the Revenue said he regretted to say it could offer no concession to PSK. The Revenue had reached that decision in circumstances where it was very concerned there should be no perceived injustice to other taxpayers who are tax compliant, he said.

Cousnel said the company had not come to court with clean hands, it had made "serious misstatements" in affidavits concerning the number of employees and had also stated it had been previously tax compliant except for one other occasion. In fact, there were nine occasions, counsel said.

Earlier the court heard the Revenue disputed PSK's claim that it employed 220 people and that the Revenue believed it had some 140 employees.

David Kennedy SC, for the company, said monies had been held back from the Revenue Commissioners by his client in order to pay wages.

The company had also made full and voluntary disclosure of its liabilities to the Revenue, counsel added.

Refusing the injunction sought, Ms Justice Laffoy said she was satisfied it had not established any fair issue to be tried in relation to the Revenue's entitlement to withdraw the company's C2 tax certificate (which allows a company to get monies from contractors without tax being deduced by the contractor).

It was clear under the relevant provision of the Tax Acts that the Revenue could cancel a C2 where there was default by a taxpayer and it was understandable that this should be so, she said.

She also did not see that there was a fair issue to be tried regarding the Revenue's power to issue the notices of attachment to debtors of the company.

She regretted that, the judge said.

Had there been a fair issue, the balance of convenience would have favoured granting the injunction because of the "inevitable fallout" from the situation.