Commissioner of Taxation v FH Faulding & Co Ltd [1950] HCA 42

High Court of Australia Latham C.J. Webb and Fullagar JJ. Commissioner of Taxation v FH Faulding & Co Ltd [1950] HCA 42

ORDER Appeal allowed with costs. Order of Rich J. discharged. In lieu thereof judgment for plaintiff for amount claimed and costs of action.

Cur. adv. vult.

The following written judgments were delivered:—

Nov. 2 Latham C.J.

The question which arises upon this appeal from a decision of Rich J. is whether the respondent company, F. H. Faulding & Co. Ltd., is entitled to an exemption from sales tax under the First Schedule to the Sales Tax (Exemptions and Classifications) Act 1935-1948, item 36 (3). Under that item the following articles are exempt from sales tax under the relevant statute, namely, Sales Tax Assessment Act (No. 1) 1930-1942:—

(3) Essences, concentrates and cordials, consisting wholly or principally of juices of Australian fruits, for the making of non-alcoholic beverages; non-alcoholic beverages consisting wholly of juices of Australian fruits.

The Federal Commissioner of Taxation sued the respondent company for sales tax alleged to be due. The defendant admitted upon the pleadings that during the relevant year the company had manufactured and sold to persons not registered under the Sales Tax Assessment Act or to registered persons who did not quote their certificates of registration certain quantities of cordials, namely, lemon cordial and raspberry balm cordial. It was not contended that the latter part of the exemption applied; that is, it was not argued that the cordials were non-alcoholic beverages consisting wholly of juices of Australian fruits. It was not disputed that the liquids sold were cordials and, accordingly, questions as to the nature of a cordial such as were discussed in Collins Arden Products, Ltd. v. Barking Corporation [1] and Broughton v. Whittaker [2] did not arise for consideration. Nor was it disputed that the liquids were cordials for the making of non-alcoholic beverages or that they contained substantial quantities of juices of Australian fruits. They did not consist wholly of such juices. The only controversy was as to whether they consisted principally of juices of Australian fruits.