Commissioner of Taxation (Cth) v Steeves Agnew & Co (Vic) Pty Ltd [1951] HCA 26

High Court of Australia Dixon J. Commissioner of Taxation (Cth) v Steeves Agnew & Co (Vic) Pty Ltd [1951] HCA 26

ORDER Suit dismissed with costs.

Cur. adv. vult.

June 1 Dixon J. delivered the following written judgment:—

This is a suit by the Commissioner of Taxation in the original jurisdiction of the High Court brought in pursuance of s. 221E of the Income Tax Assessment Act 1936-1943 for the recovery of an amount which, as the plaintiff alleges, the defendant has failed to deduct in pursuance of Division 2 of Part IV. of the Act. The claim covers the two years beginning 1st July 1942 and ending 30th June 1944 and is governed by provisions which, by Act No. 63 of 1947, have been replaced by provisions framed in the light of experience. Division 2, which was headed "Collection of Income Tax by Instalments", related to the obligation of an employer to make deductions on account of tax from the salary or wages paid by him to an employee. Section 221C (1) provided that where an employee was entitled to receive from an employer in respect of any week or part thereof salary or wages in excess of £2 the employer should at the time of making payment of the salary or wages make deductions therefrom at such rates as are prescribed. Section 221E (1) provided that where an employer failed to make any deductions required to be made by this division he should, in addition to any penalty for which he might be liable, be liable to pay to the commissioner the amount which he had failed to deduct and the commissioner might sue for and recover that amount in any court of competent jurisdiction.

The defendant was a trading company incorporated under the Companies Acts of Victoria. It carried on business in Melbourne as an insurance broker. The principal shareholders resided in London and the chief operations of the company seem to have been the securing of insurance business in Australia to be placed with Lloyds' underwriters in London. The commissioner alleges that during each of the two financial years ending respectively on 30th June 1943 and 30th June 1944 the defendant failed to make any deductions from the salary paid to a person in its employment named Welch. In respect of the first of the two financial years a claim is made for £3,072 11s. 0d., calculated on a total remuneration paid to Welch of £4,576. In respect of the second year the claim is for £2,464 16s. 0d., calculated on a total remuneration paid to Welch of £3,993.