BHP Billiton Direct Reduced Iron Pty Ltd (ACN 058 025 960) v Duffus, Deputy Commissioner of Taxation [2007] FCA 1528

FEDERAL COURT OF AUSTRALIA

BHP Billiton Direct Reduced Iron Pty Ltd (ACN 058 025 960) v Duffus, Deputy Commissioner of Taxation [2007] FCA 1528

TAXATION - income tax – corporate groups – transfer of losses – statutory requirement for written agreement to transfer losses – time limit for making agreement – discretion in Commissioner of Taxation to extend time – statutory purposes – factors relevant to exercise of discretion – public taxation ruling – legal character – administrative policy – refusal of extension of time – whether exercise of discretion miscarried – failure to consider mandatory relevant factors – adverse impact on corporate group – prejudice to Commissioner – history of matters relevant to delay – prior advice to Commissioner of intention to seek transfer – transfer hypothetical pending crystallisation of tax position – tax avoidance activity by group member – express use of discretion to penalise taxpayer – irrelevant consideration – discretion miscarried – decision set aside ADMINISTRATIVE LAW - statutory discretion – administrative policies – taxation rulings – legal character as administrative policies – legal consequences protective of taxpayer – character of ruling as administrative policy unaffected Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) s 170-50 Judiciary Act 1903 (Cth) s 39B Industry Research and Development Act 1986 (Cth) s 39J Administrative Appeals Tribunal Act 1975 (Cth) s 42D Administrative Decisions (Judicial Review) Act 1977 (Cth) Hunter Valley Developments v Cohen (1984) 3 FCR 344 cited Bellinz v Commissioner of Taxation (1998) 84 FCR 154 cited Brown v Federal Commissioner of Taxation (1999) 42 ATR 118 cited Commissioner of Taxation v Asiamet (No 1) Resources Pty Ltd (2004) 137 FCR 146 cited Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 cited Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 cited Ross Palmer Holdings v Federal Commissioner of Taxation (2003) 52 ATR 805 cited Zizza v Federal Commissioner of Taxation (1999) 42 ATR 371 cited Cooper, Deutsch and Krever, Income Taxation Commentary and Materials(2nd ed, Law Book Co, 1993) Scolaro D, Tax Rulings: Opinion or Law" The need for an Independent 'Rule-Maker' 2006) 16 Revenue Law Journal 109 BHP BILLITON DIRECT REDUCED IRON PTY LTD (ACN 058 025 960) BHP DEVELOPMENT FINANCE PTY LTD (ACN 063 024 895) v PAUL DUFFUS, DEPUTY COMMISSIONER OF TAXATION AND THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA WAD 66 OF 2006