Commissioner of Taxation v Brown [1999] FCA 1198

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Brown [1999] FCA 1198 TAXATION – income tax – taxpayer's application for extension of time to lodge objection to amended assessment – Commissioner's refusal affirmed by Administrative Appeals Tribunal ("AAT") – whether AAT erred in assessing merits of the case by reference to the taxpayer's credit Taxation Administration Act 1953 (Cth), s 14ZW(1)(c), 14ZW(2), 14ZW(3), 14ZX(1), 14ZX(2), 14ZX(4) Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344, discussed Windshuttle v Deputy Federal Commissioner of Taxation (1993) 46 FCR 235, discussed Scott v Federal Commissioner of Taxation (1966) 117 CLR 514, cited Zizza v Commissioner of Taxation [1999] FCA 848, cited COMMISSIONER OF TAXATION v JOHN JOSEPH BROWN N 492 OF 1999

DRUMMOND, SACKVILLE AND HELY JJ 67 SEPTEMBER 1999 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 492 OF 1999

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: COMMISSIONER OF TAXATION

Appellant

AND: JOHN JOSEPH BROWN

Respondent

JUDGES: DRUMMOND, SACKVILLE AND HELY JJ

DATE OF ORDER: 7 SEPTEMBER 1999

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the respondent's costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 492 OF 1999

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: COMMISSIONER OF TAXATION

Appellant

AND: JOHN JOSEPH BROWN

Respondent

JUDGES: DRUMMOND, SACKVILLE AND HELY JJ

DATE: 7 SEPTEMBER 1999

PLACE: SYDNEY

REASONS FOR JUDGMENT

THE COURT:

The Appeal 1 This is an appeal from a decision of the primary Judge (Hill J), holding that the Administrative Appeals Tribunal ("AAT") had erred in law in refusing to grant an extension of time to the taxpayer (the respondent to the appeal) to lodge an objection to an amended assessment issued by the appellant ("the Commissioner"). The consequence of that holding ordinarily would have been that the trial judge would have set aside the decision of the AAT and remitted the matter to the AAT for reconsideration according to law. However, the parties had agreed that, if the primary Judge found that the AAT had erred in law, he should make an order extending the time within which the taxpayer could object to the amended assessment. Pursuant to that agreement, Hill J made an order extending time. The agreement of the parties was expressed to be without prejudice to the right of the Commissioner to appeal against the judgment. 2 Counsel for the Commissioner stated that the appeal raised a point of principle as to the correct approach to be adopted by the AAT in determining whether the taxpayer's substantive objection had "arguable merits" for the purposes of the application to extend time. It became clear in the course of argument, and was confirmed by concessions made on behalf of the Commissioner, that no point of principle in fact arises on the appeal. The appeal falls to be determined according to what the AAT did in concluding that the taxpayer had failed to make out a case that his objection satisfied the "arguable merits" test.