Watson v Commissioner of Taxation [2002] FCA 374

FEDERAL COURT OF AUSTRALIA

Watson v Commissioner of Taxation [2002] FCA 374

Taxation Administration Act 1953 (Cth) s 14ZZM MAXWELL CLYDE WATSON v COMMISSIONER OF TAXATION T 1 OF 2002 HEEREY J 20 MARCH 2002 HOBART

IN THE FEDERAL COURT OF AUSTRALIA

TASMANIA DISTRICT REGISTRY T1 OF 2002

BETWEEN: MAXWELL CLYDE WATSON

APPLICANT

AND: COMMISSIONER OF TAXATION

RESPONDENT

JUDGE: HEEREY J

DATE OF ORDER: 20 MARCH 2002

WHERE MADE: HOBART

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

IN THE FEDERAL COURT OF AUSTRALIA

TASMANIA DISTRICT REGISTRY T1 OF 2002

BETWEEN: MAXWELL CLYDE WATSON

APPLICANT

AND: COMMISSIONER OF TAXATION

RESPONDENT

JUDGE: HEEREY J

DATE: 20 MARCH 2002

PLACE: HOBART

REASONS FOR JUDGMENT 1 The applicant seeks by way of interlocutory relief an injunction restraining the respondent from proceeding to enforce the notice of assessment dated 6 October 1998 issued to the applicant and an injunction restraining the respondent from calculating interest and penalties on that notice of assessment. It is said that the assessment in question "must be wrong" because in committal proceedings it appears that both the earnings and cash methodologies have been used. But the basic position, it seems to me, is that under s 14ZZM of the Taxation Administration Act 1953 (Cth) the review process does not interfere with the right of the Commissioner to recover tax liabilities. In colloquial terms, it is a case of pay now, litigate later. 2 In any event, there is an agreement, recorded in the Commissioner's file note of 31 May 2000, to the effect that determination of objections made by the applicant to the assessment have been left in abeyance pending the outcome of the AAT appeals of the applicant's wife and Hobart Child Care Central Pty Limited, their company. Those AAT proceedings are in turn being held in abeyance pending criminal proceedings against Mrs Watson. Last year she was committed for trial in the Supreme Court of Tasmania and a trial date has not yet been fixed. 3 As counsel for the applicant frankly conceded, there is no indication that the Commissioner intends to resile from that agreement and counsel for the Commissioner in the Court today took a stand which was only consistent with the agreement being still on foot. I do not see that there is any proper basis for the Court to interfere simply on an assertion as to the merits of the taxpayer's complaint about the assessment in question. So the application will be dismissed with costs. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.