Hii v Commissioner of Taxation [2015] FCA 375

FEDERAL COURT OF AUSTRALIA

Hii v Commissioner of Taxation [2015] FCA 375 Citation: Hii v Commissioner of Taxation [2015] FCA 375

Parties: YII ANN HII v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA YII ANN HII v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

File numbers: QUD 57 of 2014 QUD 622 of 2014

Judge: COLLIER J

Date of judgment: 23 April 2015

Catchwords: QUD 57 of 2014 INCOME TAX – application for summary judgment – substantive proceedings appeal against decision of Commissioner pursuant to s 14ZZ Taxation Administration Act 1953 (Cth) – applicant claimed to be a non-resident for taxation purposes – Commissioner formed opinion following audit that applicant's conduct in avoiding tax constituted evasion – Commissioner issued first amended assessments and applicant filed objection – Commissioner allowed objection in part and issued second amended assessments – whether in determining objection Commissioner required to re-form opinion of whether conduct was fraud or evasion – whether errors of law in the reasoning of the Commissioner's decision on the formation of the opinion – whether Commissioner erred in respect of whether there had been evasion – whether irrationality in the decision-making process of Commissioner – whether second amended assessment can be set aside as excessive – complexity of issues such that "reasonable prospects of success" cannot be easily determined QUD 622 of 2014 INCOME TAX – administrative Law – s 39B Judiciary Act 1903 (Cth) – amended originating application for relief seeking declarations and writs of certiorari, prohibition and mandamus – substantive issues listed for hearing at same time as application for summary judgment – interpretation and application of ss 170, 175 and 177 Income Tax Assessment Act 1936 (Cth) – whether the Commissioner, as part of determining an objection to an assessment, required to re-form the opinion that there has been an avoidance of tax due to fraud or evasion – whether the Commissioner engaged in acts constituting "conscious maladministration" as that phrase is explained by High Court in Commissioner of Taxation v Futuris Corp Ltd (2008) 237 CLR 146 – significant movement in case by applicant up until first day of the trial – summary judgment application dismissed based on complexity of substantive matter – common ground that Commissioner did not form an opinion that there had been fraud or evasion after the objection decision – whether insufficient for Commissioner to rely upon opinion formed at earlier stage – whether the failure to form an opinion after the objection decision a jurisdictional fact upon which the power to amend depends – whether a failure of the Commissioner to form an opinion at the objection stage is sufficient to render the purported second amended assessments liable to be set aside – combined effect of s 175 and s 177 ITAA 36 – failure by the Commissioner to comply with a provision of legislation when issuing assessments does not render the assessment invalid – whether principles in Futuris are closed or are illustrative of general principles to be developed by future case law – s 175 and s 177 ITAA 36 make clear that the basis for review under s 39B Judiciary Act is limited to where the assessment is tentative or provisional and where conscious maladministration has occurred – no allegation of bad faith in this case