Avon Products Pty Limited v Commissioner of Taxation [2006] HCA 29

HIGH COURT OF AUSTRALIA

GLEESON CJ

GUMMOW, KIRBY, HAYNE, AND HEYDON JJ

AVON PRODUCTS PTY LIMITED APPELLANT

AND

COMMISSIONER OF TAXATION RESPONDENT

Avon Products Pty Limited v Commissioner of Taxation [2006] HCA 29

14 June 2006

S541/2005

ORDER

Appeal dismissed with costs.

On appeal from the Federal Court of Australia

Representation

S J Gageler SC with M Richmond for the appellant (instructed by Ernst & Young)

B J Shaw QC with S B McGovern SC and A J O'Brien for the respondent (instructed by Australian Government Solicitor)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Avon Products Pty Limited v Commissioner of Taxation

Taxation and Revenue − Sales tax − Credit for sales tax overpaid − Passing on − CR1 in Table 3 of Schedule 1 to the Sales Tax Assessment Act 1992 (Cth) − Taxpayer did not change its pricing policy when it learned a lower rate of tax applied − Burden of proof upon taxpayer to establish it has not passed on the overpayment − Whether taxpayer satisfied onus of proof − Whether an overpayment of sales tax is passed on only if the price is increased by the amount of the tax overpaid.

Words and phrases − "passing on".

Sales Tax Assessment Act 1992 (Cth), Pt 4, Sched 1, Table 3 CR1.

Taxation Administration Act 1953 (Cth), Pt IVC, s 14ZZO.

1. GLEESON CJ, GUMMOW, KIRBY, HAYNE AND HEYDON JJ. This appeal from the Full Court of the Federal Court of Australia (Ryan and Merkel JJ; Conti J dissenting)[1] concerns the entitlement of the appellant ("Avon") to a credit under Pt 4 of the Sales Tax Assessment Act 1992 (Cth) ("the Act") for sales tax overpaid. It is not in dispute that Avon remitted the sums in question to the respondent ("the Commissioner"), nor indeed that they constituted an overpayment. Part 4 of the Act is headed "Credits" and comprises ss 51‑60. What is at issue is whether Avon passed on all or part of those amounts so as to entitle it to a credit pursuant to s 51(1) and credit ground CR1 in Table 3 of Sched 1 to the Act. 2. The Full Court dismissed an appeal by Avon against the decision of Hill J[2] which rejected Avon's claim that the disallowance of its claim to the credit be set aside.