Vacuum Oil Co Pty Ltd v Commissioner of Taxation (Cth) [1964] HCA 83

High Court of Australia Taylor J. Dixon C.J. McTiernan, Kitto, Windeyer and Owen JJ. Vacuum Oil Co Pty Ltd v Commissioner of Taxation (Cth)

ORDER Appeal dismissed with costs.

Cur. adv. vult.

1961, May 8 Taylor J . delivered the following written judgment:—

As in B. P. Australia Ltd. v. Federal Commissioner of Taxation [1] the appellant is a company engaged in the business of selling and distributing motor spirit and allied products throughout the Commonwealth and, also as in the case of B.P. Australia Limited, towards the end of 1951 the appellant found it necessary, by reason of circumstances which need not be repeated here, to take steps in an endeavour to maintain its then existing trade through that type of reselling outlets which have been referred to in the evidence as service stations. Indeed, even prior to 1951, it had, after the disestablishment of the war-time marketing pool and the abandonment of price fixing, adopted a merchandising plan which involved it in the establishment of a training course for resellers, the improvement of facilities at selected service stations and, in cases where the appellant was reasonably satisfied that a particular station was giving first class service and that the operator's turnover comprised a substantial part of its products, in the expenditure necessary to paint the particular station in standard colours to convert it to what was called a "White Station". Then, in August 1951, it received a copy of the notification from the Shell Company of Australia Limited which has been referred to in the earlier case. Thereupon it accelerated the tentative plans which it had previously made for the introduction of solo site trading so far as its products were concerned. The matter now in question is whether the respondent has wrongly disallowed as a deduction from the appellant's assessable income for the year ended 30th June 1953 the sum of £192,701, that being the aggregate of amountsclaimed as deductions during the relevant year which were said to have been expended in or in connexion with its efforts to secure sites for the exclusive sale of its products.