BLACK market alcohol smugglers whose operation cost the country more than £5m can keep their profits from the trade after a slip-up by prosecutors, it was revealed last night.

Daljit Sekhon, Shangara Singh, Satnam Singh and Gurdav Dhnoay admitted conspiring to cheat the Inland Revenue at Newcastle Crown Court in September 1998.

The court heard that Satnam Singh, 39, of Sunderland, Shangara Singh, 66, of South Shields, Sekhon, 41, of Birmingham, and Dhnoay, 42, of Oldbury, West Midlands, had defrauded the public purse of £5,555,600.

The gang was sentenced in 1998 but special orders to confiscate their profits were not made until June the next year.

A slip-up by prosecutors, who failed to postpone proceedings before the men were sentenced, means the orders have now been overturned at the Court of Appeal in London.

The Lord Chief Justice, Lord Woolf, said the men had all played differing roles in the importation or diversion on a large scale of alcoholic goods on which no duty had been paid.

Lord Woolf said the 1988 Criminal Justice Act clearly required that decisions to postpone confiscation proceedings had to be taken before sentence was passed and that had not been done in this case.

He concluded: "In the result, therefore, there having been no postponement, or even purported decision to postpone until after the confiscation, orders were made without jurisdiction. The orders have therefore to be quashed."

Lord Woolf said the confiscation of profits of crime could often be one of the most effective ways of deterring crime.

But he said: "Regrettably, a series of cases have come before the courts recently which reveal that the prosecuting authorities, including the advocates appearing for them, have been attaching too little significance to ensuring that confiscation proceedings are effective.

"A series of cases have resulted in orders for the confiscation of substantial sums being set aside for the failure to adhere to procedural requirements that are often of a technical nature. These repeated failures on the part of the prosecuting authorities should not be allowed to continue.