High Court of Australia Barwick C.J. Gibbs, Stephen, Mason, Jacobs and Murphy JJ. HC Sleigh Ltd v South Australia [1977] HCA 2 ORDER Demurrer allowed with costs. Action dismissed with costs. Cur. adv. vult. The following written judgments were delivered:— 1977, Feb. 1 Barwick C.J. The Court has now decided to maintain the decision of Dennis Hotels Pty. Ltd. v. Victoria [91] , for what, upon its facts and relevant legislation, it decides. Consequently, legislation operating in indistinguishable terms will be supported as not imposing a duty of excise. This course does not commit the Court to accept the reasoning in that case. The result, as I think, tends to put a premium on drafting ingenuity and is a disregard of substance. Further, the practical distinction between a licence fee rated on the sales of a former period and such a fee rated on the sales of the licensed period, vis-à-vis the effect of the imposition of the fee upon the movement of goods into consumption, is difficult to see, particularly in the case of a continuing business operating over a period of years. However, I am unable to find any substantially distinguishing feature of the Business Franchise (Petroleum) Act, 1974-1975 S.A. ("the Act"). I therefore agree that this case is governed by the decision in Dickenson's Arcade Pty. Ltd. v. Tasmania [92] , and that the licence fee imposed by that Act does not constitute an excise within the meaning of s. 90 of the Constitution. 1. (1960) 104 C.L.R. 529. 2. (1974) 130 C.L.R. 177. I have had the advantage of reading the reasons for judgment prepared by my brother Mason. I am in substantial agreement with the reasons he expresses for his conclusions; first, that the licence fee under challenge in the case is not an excise; second, that the refinery exchange arrangements set out in the statement of claim, the sales referred to in pars 24 and 25 of the statement of claim, and the transactions described in pars 28, 29 and 30 of the statement of claim do not form part of interstate trade; third, that the prohibition in the Act of carrying on the business of selling without a licence infringes s. 92 of the Constitution; fourth, that the penalty imposed upon carrying on such a business without a licence infringes s. 92; fifth, that, by reason of the Acts Interpretation Act, 1915 S.A. as amended, the relevant parts of the Act may be given a distributive operation so that they remain valid in so far as they relate to carrying on the business of selling petroleum products otherwise than in the course of interstate trade. I should add that I have found the last of these conclusions a matter of difficulty, as indeed are so many applications of sections importing into legislation an intention for partial operation. However, I have come to the conclusion that, notwithstanding the limited nature of the provisions of the Acts Interpretation Act, the prohibition, the provisions for a licence fee and for the penalty can be read distinctively and saved from total invalidity. I would allow the demurrer and dismiss the suit. Gibbs J. The plaintiff company challenges the validity of the Business Franchise (Petroleum) Act, 1974-1975 S.A.. That Act had a short life. It came into operation in December 1974 and was repealed on 24th December 1975. In the meantime it had been amended. It is unnecessary for present purposes to distinguish between the unamended and the amended form of the Act; reference need only be made to the latter. The Act made it unlawful for any person to carry on the business of selling petroleum products on and from 24th March 1975 unless he was the holder of a licence: s. 11 (1). If a person was convicted of an offence against that provision, the court was required to impose upon him a penalty which included such amount (if any) as had been certified by the Commissioner as the amount by which the convicted person had benefited financially through non-payment of licence fees: s. 11 (1a). There were nine classes of licences: s. 12; the class of licence required depended mainly on whether the products to be sold were, or included, products manufactured by the licensee and whether the intended buyers were, or included, other licensees: see the definitions in s. 4 (1). An ordinary retailer of petrol from a service station required a class 9 licence, which authorized the licensee to carry on at the premises specified in the licence the business of there selling petroleum products not manufactured by him and not manufactured at those premises, and to sell them only to persons who were not licensees. It was unlawful for a licensee to sell petroleum products except as authorized by the licence held by him (s. 13 (1)). During the currency of the Act there were two "licence periods"—(a) the period commencing on 24th March 1975 and ending on 23rd September 1975, and (b) the period commencing on 24th September 1975 and ending on 23rd December 1975: s. 4 (1). The fee payable for any licence comprised a fixed sum of money and a further amount which (except in the case of a class 9 licence) was "the prescribed percentage of the value of the quantity of petroleum products sold by the applicant during the relevant period reduced by the quantity of any petroleum products non-accountable in respect of that period": s. 14 (2). The "relevant period" meant, in relation to a licence to be in force during the first licence period, the financial year ending on 30th June 1974, and in relation to a licence to be in force during the second licence period, the financial year ending on 30th June 1975: s. 4 (1). The question what quantity of any petroleum product was "non-accountable" in respect of any period was dealt with (rather obscurely) in s. 14 (1). Any petroleum product which had been sold by one licensee to another, whether or not during the relevant period (other than any of such product held for resale by the latter licensee at the end of the next preceding relevant period), and which was either resold by the latter licensee during the relevant period, or wasted or lost by the latter licensee during that period, or held for resale by the latter licensee at the end of that period, was non-accountable so far as the former licensee was concerned. This reduction for "non-accountable" petroleum product was inapplicable to the ultimate reseller who held a class 9 licence and whose fee therefore included simply "the prescribed percentage of the value of the quantity of petroleum products sold by the applicant during the relevant period". The Commissioner was given power to reassess the fee in any case where in his opinion it was assessed incorrectly: s. 22. The fee for a licence was payable when the application was made for the licence unless the applicant elected to pay the fee by instalments; in the latter case the first instalment was payable on the application: s. 19 (1) (c). However, the Commissioner might refuse to grant a licence notwithstanding that the fee was paid: s. 19 (1). The Act did not lay down any criteria to guide the Commissioner in deciding whether to grant or refuse a licence, when the application had been made in due form and the fee had been paid. Provision was made for an appeal to a tribunal against a refusal by the Commissioner to grant a licence and against the assessment or reassessment of a licence fee: s. 25. The plaintiff contended that the Act attempted to impose a duty of excise contrary to s. 90 of the Constitution and further that it impaired the freedom of trade and commerce among the States contrary to s. 92. The question whether the Act attempts to impose a duty of excise is in my opinion concluded by the recent decision in Dickenson's Arcade Pty. Ltd. v. Tasmania [93] . It may be accepted that the licensing system under the Act was brought into existence primarily as a means of collecting the licence fees but it does not follow that the fees are duties of excise. One thing that is clear about the operation of s. 90 is that an exaction is not a duty of excise within the meaning of that section unless it is a tax upon goods. Not every tax on goods is an excise but no exaction that is not a tax on goods can be an excise. As Fullagar J. pointed out in Dennis Hotels Pty. Ltd. v. Victoria [94] , the expressions "a tax upon goods", "a tax in respect of goods" and "a tax in relation to goods" are ambiguous. Fullagar J. explained the meaning of those expressions as follows: Goods as such cannot pay taxes: there must be a person to pay them. And what is meant by saying that a tax is a tax upon goods is that the person by whom the tax is payable is charged by reason of, and by reference to, some specific relation subsisting between him and particular goods. A tax will be rightly regarded as a tax upon goods if the person upon whom it is imposed is charged by reason of and by reference to the fact that he is the owner, importer, exporter, manufacturer, producer, processor, seller, purchaser, hirer or consumer of particular goods. This list may not be exhaustive. I am in complete agreement with that statement and do not need to consider, for present purposes, what imposts, although taxes upon goods, are nevertheless not duties of excise. The Act in the present case does not impose a tax on goods, because the fee for a licence to carry on the business of selling petroleum products is quantified by reference to the value of the quantity of petroleum products sold during a period preceding that in respect of which the licence is granted. The decisions in Dennis Hotels Pty. Ltd. v. Victoria and Dickenson's Arcade Pty. Ltd. v. Tasmania establish that such a fee is not a tax on goods and is therefore not a duty of excise. 1. (1974) 130 C.L.R. 177. 2. (1960) 104 C.L.R. 529, at p. 554. I can see no ground of distinction between those two decisions and the present case. The circumstances that the legislation there considered may have provided a means of regulating the trade in liquor and tobacco, and that the licence itself may have constituted a valuable privilege (at least in the case of a liquor licence) do not distinguish those cases from the present, where the purpose of the licence is to enable the fees to be collected. The fees there in question were held not to be duties of excise, not for those reasons, but because they did not amount to taxes upon goods. I need not add to what I have said in relation to this matter in Dickenson's Arcade Pty. Ltd. v. Tasmania [94a] . Nor in my opinion does the presence in the Act of ss. 14 (1) and 22 distinguish the legislation now in question from that considered in those cases. Section 14 (1) may be thought to reveal an intention that any particular gallon of a petroleum product shall be brought only once into the assessment of a fee for any licence or licences, and thus to support the view that it is intended that the tax shall be placed once on each gallon of petroleum product as it progresses from the first to the last seller. However, this does not alter the fact that the fee is based on the value of goods sold during an earlier period, and it remains true to say that under the Act no sale of petrol, either during the "relevant period" or during the "licence period", creates a liability to pay the tax. The discretionary power given to the Commissioner by s. 22 to reassess the fee does not in my opinion alter the nature of the tax. It was also argued that it was relevant to the question whether the fee was a duty of excise that the amount of the fee forms a component of the prices that may lawfully be charged to consumers of petroleum products in South Australia, pursuant to the Prices Act, 1948-1974 S.A. and to a Prices Order made thereunder, and to exemptions granted under the Prices Justification Act, 1973-1974 Cth, and that have in fact been charged to such consumers. The fact that the fee is in fact passed on by the licensee to the consumer means no doubt that it may be described as an indirect tax, but that alone does not make it an excise. None of these matters leads to the conclusion that any sale of petroleum products is taxed, or that the fee bears any other than "a coincidental relationship" (to use the words of Stephen J. in Dickenson's Arcade Pty. Ltd. v. Tasmania [95] ) to the products sold during the period of the licence. 1. (1974) 130 C.L.R., at pp. 224-226. 2. (1974) 130 C.L.R., at p. 236. Counsel for the plaintiff in their argument relied heavily on M. G. Kailis (1962) Pty. Ltd. v. Western Australia [96] , which it was suggested weakened the authority of Dickenson's Arcade Pty. Ltd. v. Tasmania [97] . In that case the majority of the Court (McTiernan, Menzies and Mason JJ., Gibbs and Stephen JJ. dissenting) held that s. 35G of the Fisheries Act, 1905-1971 W.A. purported to impose a duty of excise and was invalid. Under that Act it was unlawful to carry on the processing of fish for the purposes of sale except under the authority of a licence for which a fee was payable. One member of the majority, Menzies J., considered that the effect of the legislation, on its proper construction, was that the fee was to be assessed by reference to the fish acquired for processing during the period of the licence. On that view, of course, both Dennis Hotels Pty. Ltd. v. Victoria [98] and Dickenson's Arcade Pty. Ltd. v. Tasmania [97] were clearly distinguishable. The other members of the Court considered that the fee was to be assessed by reference to the value or cost of fish acquired during an earlier period. Mason J. nevertheless distinguished Dennis Hotels Pty. Ltd. v. Victoria [98] for a reason that he had expressed in Dickenson's Arcade Pty. Ltd. v. Tasmania [99] , namely that it "should not be regarded as authoritative in relation to the prescription of fees for licences to manufacture or produce goods" [1] . Neither Menzies J. nor Mason J. questioned the authority of those decisions so far as they related to fees for a licence to carry on a business of selling goods. The two members of the Court who were in the minority, in conformity with the opinions which they had expressed in Dickenson's Arcade Pty. Ltd. v. Tasmania followed and applied Dennis Hotels Pty. Ltd. v. Victoria. Only the judgment of McTiernan J. is opposed to the authority of those decisions; he gave effect to the opinion he had expressed in Dickenson's Arcade Pty. Ltd. v. Tasmania [2] , where he had said that Dennis Hotels Pty. Ltd. v. Victoria was not a precedent governing that case: that, however, was a dissenting opinion. The judgments of the majority of the Court in M. G. Kailis (1962) Pty. Ltd. v. Western Australia [96] have no common basis and for that reason the authority of that case would appear to be limited to the very question it decided, i.e. that s. 35G is invalid, but it is apparent that four of the five members of the Court accepted the authority of Dickenson's Arcade Pty. Ltd. v. Tasmania so far as it relates to fees for licences to sell goods. 1. (1974) 130 C.L.R. 245. 2. (1974) 130 C.L.R. 177. 3. (1960) 104 C.L.R. 529. 4. (1974) 130 C.L.R. 177. 5. (1960) 104 C.L.R. 529. 6. (1974) 130 C.L.R., at p. 240. 7. (1974) 130 C.L.R., at p. 265. 8. (1974) 130 C.L.R., at p. 206. 9. (1974) 130 C.L.R. 245. In Dickenson's Arcade Pty. Ltd. v. Tasmania [3] this Court, although asked to reconsider Dennis Hotels Pty. Ltd. v. Victoria [4] , reaffirmed the authority of that decision. No valid reason has been advanced for reopening a question decided recently and by a substantial majority. Those decisions govern the present case. The argument that the Act attempts to impose a duty of excise must fail. 1. (1974) 130 C.L.R. 177. 2. (1960) 104 C.L.R. 529. I turn now to the alternative argument based on s. 92. I commence with the assumption that the Act could not validly apply to interstate trade. The initial question, however, is whether the plaintiff engages in any interstate trade which would be affected by the Act. The plaintiff does no doubt engage in interstate trade. It sells and delivers petroleum products in all States of Australia. However, although the words of ss. 11 and 13 of the Act are wide and general, they must be understood, in accordance with general principles of construction, to be limited to business carried on, and sales made, in South Australia. The question is whether the business which the plaintiff carries on, and the sales which it makes, in South Australia (or some of them) form part of interstate trade. The plaintiff obtains the petroleum products which it sells in South Australia from a refinery operated at Port Stanvac in that State by two other companies, Esso and Mobil. The products are obtained pursuant to a system known as "refinery exchange". In short, Esso and Mobil sell and deliver petroleum products to the plaintiff in South Australia, in consideration of the plaintiff selling and delivering petroleum products to Esso and Mobil from a refinery in New South Wales. The refinery exchange system obviates the need for petroleum products to be moved interstate, but a transaction entered into to avoid the necessity of engaging in interstate trade cannot for that reason itself be regarded as part of interstate trade. The operation of the refinery exchange system involves communications between oil companies in different States, and the movement of debits and credits between and among those companies. It thus in my opinion involves interstate commerce or intercourse. However, the Act has no legal effect on that commerce or intercourse. The fact that the sales by Mobil and Esso to the plaintiff of petroleum products refined at Port Stanvac are made pursuant to the refinery exchange system does not convert them into transactions of interstate trade. They are sales made within South Australia of petroleum products produced within South Australia, and are part of the domestic trade of South Australia. Some of the products so sold are delivered by Mobil or Esso or transported by the plaintiff from Port Stanvac to distribution points situated in other States, namely Victoria, Tasmania and New South Wales. That, however, is not enough to convert the sale to the plaintiff into an interstate transaction. For that result to ensue it would be necessary that the agreement for sale to the plaintiff should contain a stipulation that the petroleum products should be despatched from the refinery in South Australia and delivered by the seller to the plaintiff in a State other than South Australia: see W. & A. McArthur Ltd. v. Queensland [5] which on this point has often been cited with approval. 1. (1920) 28 C.L.R. 530, at pp. 540, 559-560. The plaintiff further alleges that the circumstances of certain of the sales which it makes give them the qualities of interstate trade. Those sales are as follows: (a) sales made in South Australia, the product sold being delivered by the plaintiff from a distribution point in South Australia to buyers in Victoria; (b) sales made by the plaintiff pursuant to orders received by an agent in South Australia from purchasers resident in South Australia, delivery being made by the plaintiff by transporting the petroleum products from Victoria to South Australia; (c) sales made by the plaintiff in South Australia or New South Wales pursuant to orders received from purchasers resident in South Australia, delivery being made by the plaintiff from Broken Hill in New South Wales to South Australia. In none of these cases was it alleged that it was a term of the contract that petroleum products should be despatched from one State and delivered in another. W. & A. McArthur Ltd. v. Queensland [6] is authority for the proposition that these sales did not form part of interstate trade. 1. (1920) 28 C.L.R. 530. Finally it is said that the provisions of the Act are intended to apply equally to interstate and to intrastate trade, that they are incapable of severance and that the Act is therefore invalid in its attempted application to intrastate trade as well as in its attempted application to interstate trade. I do not need to decide whether the plaintiff, which has not shown that the Act has interfered with its freedom of interstate trade, has a sufficient standing to raise this contention, since it is a contention that cannot in any case succeed. In my opinion s. 22 (a) of the Acts Interpretation Act, 1915 S.A., as amended, has the effect that the Act is to be construed so that it does not infringe the freedom of interstate trade guaranteed by s. 92 (and thereby exceed the legislative power of the State) and that the Act is a valid enactment to the extent to which it does not exceed the power of the State by contravening s. 92. Accordingly, s. 11 of the Act is to be construed as referring to the business of selling petroleum products otherwise than in the course of interstate trade, s. 13 refers only to a licensee who sells petroleum products otherwise than in the course of intrastate trade, and s. 14, when it refers to the quantity of petroleum products sold, must be construed as referring only to such products sold otherwise than in the course of interstate trade. The Act has not been shown to be invalid and the demurrer should be allowed. Stephen J. In other judgments in this case appear analyses of the relevant legislation, which I gratefully adopt. Two questions arise for decision, whether or not the licence fees here in issue are duties of excise and as such infringe s. 90 of the Constitution, and whether the legislation involves any, and if so what, infringement of s. 92 of the Constitution. The analyses of the legislation make it abundantly clear that the legislation is, in all relevant respects, indistinguishable from that considered in Dickenson's Arcade Pty. Ltd. v. Tasmania [7] . I find no valid ground for distinction in the fact that in Dickenson's Case and in its predecessor, Dennis Hotels Pty. Ltd. v. Victoria [8] , the licence in question related to the licensing of premises for the sale of consumables, liquor and tobacco, which some may see as falling within a particular class broadly described as drugs. To introduce into this already difficult area of the law a ground of distinction dependent upon the character of the goods in question and which involves the notion of a class of goods of uncertain scope is neither called for by prior authority nor is it, in my view, likely to contribute either to greater certainty of result or to what might be thought to be desirable policy ends. 1. (1974) 130 C.L.R. 177. 2. (1960) 104 C.L.R. 529. Since the decision in Dickenson's Case [7] , delivered only a little over two years ago, nothing has occurred to affect its authority. In M. G. Kailis (1962) Pty. Ltd. v. Western Australia [9] a State-imposed licence fee in respect of fish processors was held by the majority to be a duty of excise. But each of the majority judgments proceeded upon quite distinct grounds; that of Menzies J. in particular turned upon the particular meaning which he assigned to the curious terms in which the legislation there in question was cast. His Honour expressly affirmed [10] the correctness of Dennis Hotels [8] . Mason J. in his reasons for judgment in the present case, after an exposition of the true basis of his own majority decision in the Kailis Case, has described the submission that the Kailis Case overruled Dennis Hotels and Dickenson's Arcade as "plainly misconceived". With this I am in full agreement. 1. (1974) 130 C.L.R. 177. 2. (1974) 130 C.L.R. 245. 3. (1974) 130 C.L.R., at p. 254. 4. (1960) 104 C.L.R. 529. Accordingly, for the reasons which emerge from the majority judgments in Dickenson's Arcade [7] , I reject the attack upon the present legislation based upon s. 90 of the Constitution. There is but one further observation to be made concerning duties of excise. It was submitted that to distinguish between a licence fee calculated on sales or turnover of a past period and one calculated on current sales or turnover is merely artificial, that it lacks some worthwhile quality of reality and is destructive of clear constitutional intent. So to submit is to assume that the exclusive nature of the federal Parliament's power to impose duties of excise can readily and with accuracy be explained by reference to constitutional purpose or historical reasons, that purpose or those reasons providing a reliable guide to the identification of the precise field of revenue-raising from which the States are to be excluded. Yet experience in the past suggests that neither source offers certain guidance and that it is, instead, to the meaning of "duties of excise" that attention must be directed if the extent of the area immune from State exaction is to be discovered. If, then, it be a feature of "duties of excise" that they are directly related to goods and are imposed at some step in their production or distribution (Bolton v. Madsen [11] ) it is entirely realistic that importance should be attached to the distinction to which I have referred, constitutional limits of revenue-raising power being fixed by reference to the particular character which an impost bears, it necessarily follows that a feature of that impost relevant to that character will be an important determinant of validity. Moreover, since s. 90 denies to the States only those imposts of a particular character, it is to be expected that imposts especially designed so as to lack that character will be resorted to; this is no more than the consequence of delimiting legislative capacity by reference to a particular class of impost identifiable by particular characteristics. 1. (1974) 130 C.L.R. 177. 2. (1963) 110 C.L.R. 264, at p. 271. In relying upon s. 92 the plaintiff seeks to establish two distinct grounds upon which it may be said itself to be engaged in interstate trade, the one involving the system of refinery exchange, which is a feature of the Australian oil marketing scene, the other concerned with particular instances said to involve trading across State borders. Both have been considered in detail in the reasons for judgment of Mason J. and I agree with his conclusion that in neither instance is there made out any relevant example of interstate trade. The plaintiff has accordingly failed to establish the existence of interstate trade engaged in by it and which is burdened by the present legislation; nor, for that matter, has another's interstate trade been shown to be so burdened as relevantly to burden the plaintiff's own interstate trade. It is not open to the plaintiff to ask of the Court that it should assume some hypothetical set of circumstances involving an example of interstate trade, should determine that the legislation burdens that imagined trade in a manner offensive to s. 92, should then find that all the provisions of the legislation form an inseverable whole, and should by this means conclude that the plaintiff, engaged exclusively in intrastate trade, may nevertheless with impunity disregard that legislation. The principal, although not the sole, objection to such a course is that this Court would be being asked to declare legislation invalid as depriving interstate trade of the freedom guaranteed by s. 92 without any evidence that the legislation in fact does so. In truth there may exist no instances whatever of any burdening of interstate trade in consequence of this legislation, and thus no infringement of s. 92. It would be wrong that in those circumstances the legislation should be thus struck down. The objection rests not so much upon any lack of standing or interest on the part of the plaintiff as upon the absence of any evidence that the legislation in any way offends s. 92. The importance of a sound evidentiary basis in cases to which s. 92 is sought to be applied has been emphasized in the past. Instances are provided by Chapman v. Suttie, per Dixon C.J., [12] and Tamar Trading Co. Pty. Ltd. v. Pilkington, per Barwick C.J. [13] . No mere unsupported hypothesis should be substituted for proved or agreed fact and thus become the ground for decision. 1. (1963) 110 C.L.R., at p. 325. 2. (1968) 117 C.L.R. 353, at p. 358. I would allow the demurrer and dismiss the action. Mason J. In Dennis Hotels Pty. Ltd. v. Victoria [14] the Court decided, by majority, that the liquor licensing fee imposed by s. 19 (1) (a) of the Licensing Acts Vict. was not a duty of excise. The amount payable for the licence was calculated not by reference to sales of liquor in the period for which the license was granted, but by reference to sales during a period ending before the date of the application for the grant or renewal of the licence. On the other hand, the fee imposed for a temporary victualler's licence by s. 19 (1) (b) was held to be an excise. The amount of the fee payable for this licence was calculated by reference to liquor sold under the licence. As the reasons given by Fullagar J. differed from those given by other members of the Court for concluding that s. 19 (1) (a) imposed a duty of excise, it is difficult to extract a uniform principle from the majority judgments. 1. (1960) 104 C.L.R. 529. Later, in Bolton v. Madsen [15] the whole Court said: " for constitutional purposes duties of excise are taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers", and went on to say: It is not enough that Turner, the owner-carrier, could by a simple calculation determine the cost to him per bale of carrying his wool from his station to the wool store for sale. It is not enough because it is the criterion of liability that determines whether or not a tax is a duty of excise. The tax is a duty of excise only when it is imposed directly upon goods or, to put the same thing in another way, when it directly affects goods, and to establish no more than that its imposition has increased the cost of putting goods upon the market by a calculable amount falls short of establishing the directness of relation between the tax and the goods that is the essential characteristic of a duty of excise. 1. (1963) 110 C.L.R. 264, at p. 271. However, subsequent cases indicated that the criterion of liability enunciated in Bolton v. Madsen no longer commanded unqualified acceptance (see Anderson's Pty. Ltd. v. Victoria [16] ; Western Australia v. Hamersley Iron Pty. Ltd. [No. 1] [17] ; Western Australia v. Chamberlain Industries Pty. Ltd. [18] ). Then, in Dickenson's Arcade Pty. Ltd. v. Tasmania [19] the Court held that Pt III of the Tobacco Act 1972 Tas. did not impose an excise. Part III prohibited the retail sale of tobacco without a licence and imposed as a fee payable for the licence an amount calculated by reference to the value of tobacco handled by a retailer during the period of six months prior to the commencement of the licence. With the exception of McTiernan J., all the members of the Court regarded the licence fee as indistinguishable in any relevant respect from that imposed by s. 19 (1) (a) of the Licensing Acts in Dennis Hotels [20] . I indicated then that, although I accepted Dennis Hotels as an authoritative decision in relation to a licence fee having similar characteristics, I did not regard the majority judgments as expressing a principle that would necessarily govern all cases, in particular cases where a licence similarly calculated was imposed on the manufacture or production of goods. So in M. G. Kailis (1962) Pty. Ltd. v. Western Australia [21] , in which judgment was delivered on the same day as in Dickenson's Arcade [22] , I concluded that the licence fee payable for the processing of fish under the Fisheries Act W.A. was an excise. There the mode of calculation of the licence fee was, as I thought, though Menzies J. thought otherwise, indistinguishable from the s. 19 (1) (a) fee in Dennis Hotels and the fee in Dickenson's Arcade. But it was a fee payable in respect of the processing of fish, that is, in respect of manufacture and production, whereas in Dennis Hotels the fee payable was in respect of the sale of liquor and in Dickenson's Arcade in respect of the sale of tobacco. 1. (1964) 111 C.L.R. 353. 2. (1969) 120 C.L.R. 42. 3. (1970) 121 C.L.R. 1. 4. (1974) 130 C.L.R. 177. 5. (1960) 104 C.L.R. 529. 6. (1974) 130 C.L.R. 245. 7. (1974) 130 C.L.R. 177. The plaintiff's submission in the instant case, that Kailis' Case [21] overruled Dennis Hotels [20] and Dickenson's Arcade [22] , is plainly misconceived. What I have already said as to the circumstances in which Kailis' Case was decided and as to the nature of the tax there imposed is enough to dispose of that suggestion. But the answer to the submission does not stop at this point. The fact is that the three members of the majority in Kailis' Case each had different reasons for subscribing to the conclusion that the licence fee was an excise. McTiernan J. who dissented in Dickenson's Arcade in conformity with the view which he expressed in that case, held the fee to be an excise, whilst Menzies J., placing a different construction on the Fisheries Act W.A., considered that the licence fee was calculated by reference to the quantity of materials processed during the period for which the licence was held. 1. (1974) 130 C.L.R. 245. 2. (1960) 104 C.L.R. 529. 3. (1974) 130 C.L.R. 177. The question, then, as I see it, is whether the licence fee payable under the Business Franchise (Petroleum) Act, 1974 S.A. is distinguishable from the licence fees dealt with in Dickenson's Arcade [22] . If it is not distinguishable, then this Court has no alternative but to follow its earlier decisions. Had it not been for Dickenson's Arcade there may have been stronger reasons for taking a different course, but in the latter case the Court was invited to reconsider Dennis Hotels [23] . The Court rejected this invitation. 1. (1974) 130 C.L.R. 177. 2. (1960) 104 C.L.R. 529. Generally speaking, the Court should be slow to depart from its previous decisions, especially in constitutional cases where the overturning of past decisions may well disturb the justifiable assumptions on which legislative powers have been exercised by the Commonwealth and the States and on which financial appropriations, budget plans and administrative arrangements have been made by governments. This comment applies with more force to excise cases for, as a result of the contraction of the financial powers of the States in consequence of s. 105A of the Financial Agreement and the Uniform Tax Cases [24] , any expansion in the constitutional concept of excise has a marked effect on the capacity of the States to raise revenue for government. 1. (1942) 65 C.L.R. 373; (1957) 99 C.L.R. 575. Since Dennis Hotels [23] it has been accepted that liquor licensing fees calculated by reference to past sales are not an excise and the States have continued to rely on liquor licensing fees as an important source of revenue. Likewise, since Dickenson's Arcade [25] States have relied on tobacco licensing fees, similarly calculated, as an additional source of government revenue. It would, I think, lead to great uncertainty in government and commerce if the Court were now to hold that Dennis Hotels or Dickenson's Arcade was wrongly decided. Such a course would disturb legislative and financial arrangements made on the faith of the existing decisions of this Court. 1. (1960) 104 C.L.R. 529. 2. (1974) 130 C.L.R. 177. A departure from these decisions can be justified only in the event that the Court is convinced that they are wrong. Yet the inherent difficulty of determining what is an excise in the constitutional sense, a difficulty reflected in the shifts of opinion that have taken place in the judicial exposition of s. 92, makes it extremely hard to say that a particular decision is wrong, notwithstanding that the reasoning on which it is based may not appear to be persuasive. So far as the present problem is concerned, nothing has occurred since Dickenson's Arcade [25] , which was decided only two years ago, to suggest that it was wrongly decided. Nor, indeed, did the plaintiff's counsel so suggest, apart from submitting that it had been overruled by Kailis' Case [26] , a submission which, as I have said, was misconceived. There is, therefore, no basis for our refusing to follow Dickenson's Arcade if it transpires that the present case cannot be distinguished. 1. (1974) 130 C.L.R. 177. 2. (1974) 130 C.L.R. 245. In the present proceedings the plaintiff seeks a declaration that the South Australian Act of 1974 is invalid. The validity of the Act arises on a demurrer taken by the defendant to the further amended statement of claim. The Act of 1974 was repealed by the Business Franchises (Miscellaneous Provisions) Act (No. 61 of 1975) on 24th December 1975, but in its operation up to that date the Act of 1974 was amended in several respects by the same Act. What is in question between the parties is the application of the Act in its amended form to the plaintiff in the period of time before its repeal, in particular the validity of those provisions in the Act which required the plaintiff to hold a licence in order to carry on the business of selling petroleum products and to pay the prescribed fees for such a licence, it being acknowledged that the plaintiff did not hold a licence at any relevant time. Part III of the Act deals with "Licences". It commences with s. 11 (1) which, on and from 24th March 1975, prohibits a person from carrying on the business of selling petroleum products unless he is the holder of a licence. Upon conviction of an offence against s. 11 (1) a person is subjected to a penalty consisting of (a) such amount as is certified by the Commissioner as the amount by which the person has benefited financially through the non-payment of licence fees, and (b) a further amount not exceeding $1,000 fixed by the Court (s. 11 (1a)). The fee payable for a licence (except a class 7 licence with which we are not presently concerned) is (a) $500, and "(b) the prescribed percentage of the value of the quantity of petroleum products sold by the applicant during the relevant period reduced by the quantity of any petroleum product non-accountable in respect of that period". "Value" is defined by s. 4 as meaning the value attributed to a quantity of petroleum products pursuant to s. 16. This section enables the Minister by published notice to set out the basis upon which and the means by which a value shall be attributed to any quantity of petroleum products sold during the period specified in the notice. "The relevant period" is defined by s. 4 as meaning (a) in relation to a licence that is to be enforced during the first licence period—the financial year ending on 30th June 1974, and (b) in relation to a licence that is to be enforced during a subsequent licence period—the financial year ending on 30th June last preceding the commencement of the licence period. Section 14 makes provision for the quantity of any petroleum product that is to be non-accountable for the purpose of determining licence fees. Broadly speaking, it is that quantity of petroleum products which have been sold by the licensee to another licensee, less wastage, and is held for resale by him. There is in all this nothing to distinguish the licence fee from that which was dealt with in Dickenson's Arcade [27] . Although some attempt was made to suggest that the plaintiff was engaged in manufacturing operations in that it included one or more additives in the petroleum products which it obtained from refiners, the prohibition is against carrying on the business of selling petroleum products without a licence, that is against selling, not against manufacturing. The case is, therefore, governed by Dickenson's Arcade. 1. (1974) 130 C.L.R. 177. The Act was also attacked by the plaintiff on the ground that it contravened s. 92. This attack was put upon two grounds. In order to understand them it is necessary to say something of the allegations in the further amended statement of claim as they relate to the plaintiff's business and to the commercial arrangements which have been made governing the refining and distribution of petroleum products in Australia. The plaintiff carries on the business of selling and delivering "Golden Fleece" petroleum products throughout Australia. It obtains these products from refiners in Australia and by importation. They are transported by the plaintiff to various terminals, depots and outports and from there delivered to retail outlets and premises of consumers. The plaintiff supplies a chain of Golden Fleece service stations some of which are owned or operated by it. The refining, distribution and marketing of petroleum products (except oils and greases) in Australia is carried out predominantly by nine companies (which include Esso Australia Pty. Ltd. ("Esso") and Mobil Oil Australia Ltd. ("Mobil")) all of which either themselves or through related companies operate refineries or have access by way of processing agreements to refinery production in this country. The refineries are situate in various States. The bulk of petroleum products sold in Australia are produced in these refineries. Each marketing company draws its supplies from the refinery most suitably located to the relevant marketing area, notwithstanding that the refinery is owned and operated by another marketing company and that supplies are delivered across State boundaries. The statement of claim then makes the following allegations: 14. The supply of petroleum products to the marketing companies from refineries over the production of which they have no control is obtained pursuant to a system known as "refinery exchange". 15. Refinery exchange is the selling and delivering by one marketer (the first marketer) in a State (the first State) of quantities and types of petroleum products being the output of a refinery controlled by the first marketer in the first State to a second marketer in consideration of that second marketer selling and delivering to the first marketer in another State like quantities and types of petroleum products being the output of a refinery controlled by the second marketer in that other State. 16. The essential purpose of the system of refinery exchange is to avoid transportation and other costs which would otherwise be incurred by a marketing company transporting petroleum products from a refinery controlled by that marketing company in one State to a marketing area in another State. The plaintiff asserts that it has a processing agreement with Australian Oil Refining Pty. Ltd. ("A.O.R.") whereby A.O.R. processes crude oil at its refinery at Kurnell in New South Wales supplied by the plaintiff into petroleum products. Sixty-three per cent of the petroleum products so processed by A.O.R. or the plaintiff are sold by the plaintiff to other marketing companies. These sales are referred to as "the exchange sales". In consideration for and dependent upon the plaintiff making the exchange sales, other marketing companies sell and deliver to the plaintiff in States other than New South Wales like quantities and types of petroleum products. These sales are referred to as "the exchange purchases". The plaintiff then alleges that the exchange sales and the exchange purchases involve "the preparation of projections of the quantity type and place of product demands, communications in various forms, the taking of accounts and the movements of credits and debits between and among the marketing companies" throughout Australia (par. 22). The plaintiff further alleges that sales made to the plaintiff by Mobil and Esso from their Port Stanvac refinery in South Australia as part of the exchange purchases are delivered by Mobil or Esso or are transported by the plaintiff from Port Stanvac to various distribution points situate within South Australia, Victoria, Tasmania and New South Wales (pars 24 and 25). On the basis of these allegations the plaintiff's first submission was that the overall arrangement between the marketing companies ("the system of refinery exchange") set up a refinery pool or oil bank whose establishment and exploitation involved the making of communications and of debits and credits across State boundaries with the consequence that the plaintiff and the marketing companies were engaged in interstate trade and commerce in the same fashion as the trading banks were held to be so engaged in the Bank Nationalization Case [28] . The submission misconceives both the character of the overall arrangement as it is pleaded (par. 15) and the basis on which it was decided that the trading banks were engaged in interstate trade. 1. (1948) 76 C.L.R. 1. In the Bank Nationalization Case it was held that the conduct of banking business involved the movement of money and of debits and credits across State boundaries. The majority in the High Court rejected the notion that debits and credits were extinguished and merely replaced by debits and credits in another State. Thus Rich and Williams JJ. said [29] : The banks are engaged in moving money or its equivalent bank credit about intra-State and inter-State for reward whether the movement is effected by the transfer of actual money in the shape of notes or coin from one place to another or by means of cheques or other documents or telegraphic transfers and subsequent debits and credits in customers' accounts. Dixon J. [30] , in reviewing the constituent elements of the business of the private banks stated that they necessarily included, inter alia, (a) the constant inter-State transmission of funds and transfer of credit; (b) constant business communication and intercourse among the States; (c) the regular use for the purposes of inter-State transactions of instruments of credit and of title to goods and their inter-State transmission; (d) the integration of inter-State banking transactions with the entire business of the bank to form a system spreading over the Commonwealth without regard to State lines. His Honour went on to say [31] : The contention made that what is commonly called a transmission of money or credit by a bank involves no movement, no interchange, nothing occurring across State lines, but merely the reduction of credit in one place and an increase in another, seems to substitute an analysis—and one of doubtful adequacy—belonging to monetary theory for the common understanding of the course business takes and the complexion which the law places upon it. But for myself I should think that if these interdependent and significant phenomena occurred in different States, involving, as they must, communication between the States, it would be enough. 1. (1948) 76 C.L.R., at p. 289. 2. (1948) 76 C.L.R., at p. 380. 3. (1948) 76 C.L.R., at p. 383. Here, however, neither the system of refinery exchange nor its execution contemplates the movement from one place to another or from one State to another of petroleum products, or for that matter the movement interstate of debits and credits. The system involves no more than that one marketing company, having control of a refinery output in one State, will sell and deliver from that output a quantity of petroleum products to another marketing company in consideration of that other marketing company, having control of refinery output in another State, selling and delivering a like quantity of petroleum products from that output to the first-mentioned marketing company. This arrangement does not call for the sale or delivery of any product across State boundaries. The sale and delivery in each instance is intrastate. It does not acquire an interstate flavour merely because the consideration for it is a like sale and delivery occurring wholly within the boundaries of another State. Accounts of the various transactions between the marketing companies are kept, but it is altogether too much to say that the debit and credit entries in these accounts are to be likened for relevant purposes to the debits and credits made by a bank in the course of the banker-customer relationship or that there is here involved a movement of credits across State lines in the sense in which it was held that banking involved such a movement. Indeed, the system of refinery exchange is far removed from the business of banking. If a parallel is to be sought it is more likely to be found in the business of insurance which was held in Hospital Provident Fund Pty. Ltd. v. Victoria [32] not to involve engagement in interstate trade and commerce. In that case Dixon C.J. said [33] : For a company to contract with a man that, in consideration of the latter making payments to it at any given place, the company will in a specified contingency make a payment to him at some other place is not to engage in inter-State commerce. Neither the making of the contract nor the performance of the contract by either side involves any step or dealing which of itself forms part of inter-State commerce even if a State line runs between the two places. If it is found necessary or convenient by either party to communicate with the other across a boundary between two States in the course of making the contract, that is an accidental feature which cannot make it an inter-State contract, although the sending of the communication itself will, of course, form an act of inter-State commerce or intercourse. In the same way, if either party finds it necessary to transmit money across such a boundary, so that he may make a payment in pursuance of the obligation of the contract, the transmission of the money will be an act of inter-State commerce, but that will not make the performance of the contract an inter-State transaction. His Honour went on to point out that the transmission of funds and the exchange of communications were no more than the incidents of the business [34] , a view also expressed by Fullagar J. [35] . 1. (1953) 87 C.L.R. 1. 2. (1953) 87 C.L.R., at pp. 14-15. 3. (1953) 87 C.L.R., at p. 18. 4. (1953) 87 C.L.R., at pp. 38-39. These observations demonstrate that communications made by the marketing companies in the execution of the system of refinery exchange across State boundaries are themselves entitled to the protection of s. 92, but enough has been said to show that the existence of these communications is not enough to endow the system of refinery exchange in the course of which they are made with the characteristics of interstate trade and commerce. In support of its case the plaintiff seized on an observation made by Rich and Williams JJ. in the Bank Nationalization Case where their Honours said [36] : "A contract between A in Sydney and B in Melbourne by which A agrees to deliver goods to B in Sydney in exchange for goods to be delivered by B to A in Melbourne is a transaction of trade and commerce among the States." With respect to their Honours, the example given is not an instance of interstate trade. The contract supposed does not call for the delivery of goods across a State boundary; it therefore does not involve interstate trade. Moreover, there is no importation or movement of goods from one State to another; consequently the goods do not enter interstate trade. That this is so is made clear in W. & A. McArthur Ltd. v. Queensland [37] where it was held that of the following transactions entered into by travellers in Queensland on behalf of the plaintiff, a Sydney company, "(1) they offer for sale goods of the descriptions sold by the plaintiff, to be delivered in Queensland; (2) they obtain offers to purchase goods of the descriptions sold by the plaintiff, and forward the offers to the plaintiff in Sydney, where they are accepted, and the goods are in fact despatched to the purchasers in Queensland; (3) they make agreements to sell goods of that description to be delivered in Queensland; and (4) they make agreements to sell goods of that description, stipulating that the goods are to be despatched from the plaintiff's warehouse in Sydney and delivered by plaintiff to purchasers in Queensland " [38] , only the fourth was held to be an example of interstate trade [39] . This view of the constitutional conception of interstate trade has been consistently maintained ever since (see Carter v. Potato Marketing Board [40] ; Chapman v. Suttie [41] ; Mikasa (N.S.W.) Pty. Ltd. v. Festival Stores [42] ; S.O.S. (Mowbray) Pty. Ltd. v. Mead [43] ; and North Eastern Dairy Co. Ltd. v. Dairy Industry Authority (N.S.W.) [44] ). 1. (1948) 74 C.L.R., at p. 289. 2. (1920) 28 C.L.R. 530. 3. (1920) 28 C.L.R., at p. 540. 4. (1920) 28 C.L.R., at pp. 559-560. 5. (1951) 84 C.L.R. 480. 6. (1963) 110 C.L.R. 321, at pp. 337, 341, 344. 7. (1972) 127 C.L.R. 617, at pp. 628, 639. 8. (1972) 124 C.L.R. 529. 9. (1975) 134 C.L.R. 559. Considered in this light pars 24 and 25 add nothing to the plaintiff's first submission. It is not suggested that the system of refinery exchange creates any contractual obligation to deliver petroleum products from the Port Stanvac refinery across State boundaries. Of course any such delivery would be protected by s. 92 but this is quite another matter and it lends no support to the plaintiff's general submission based on the system of refinery exchange. The plaintiff's second submission is founded on certain transactions which are pleaded in pars 28 to 30 of the amended statement of claim. The plaintiff submits that each group of transactions constitutes interstate trade and commerce. Paragraph 28 alleges that the plaintiff has carried on and intends to carry on at distribution points in South Australia the business of selling in that State petroleum products and delivering such products to purchasers resident in Victoria. The particulars which follow show that sales are made in South Australia to purchasers in Victoria and that deliveries of the products thus sold are made by the plaintiff and in one instance by a carrier from distribution points in South Australia to destinations in Victoria. There is, however, no allegation that the contracts of sale call for delivery across the border. Paragraph 29 alleges that the plaintiff has carried on the business of receiving orders for petroleum products from purchasers resident in South Australia and "pursuant to such orders delivering such petroleum products from Victoria into South Australia" where the products are sold to the purchasers. The particulars of this allegation indicate that the plaintiff received orders from its agent in Mount Gambier for petroleum products from purchasers in South Australia and that the plaintiff satisfied these orders by transporting petroleum products from Portland in Victoria either directly to the purchasers or to its agent at Mount Gambier who thereupon delivered or caused to be delivered the products to the purchasers. Here again there is no allegation that the contract called for delivery across a State border. The plaintiff would have been at liberty to satisfy the order by making a delivery from stocks in South Australia. Paragraph 30 alleges that the plaintiff receives orders for petroleum products from purchasers in South Australia and "pursuant to such orders delivers products from Broken Hill in New South Wales into South Australia" where the products are sold to the purchasers. The particulars indicate that deliveries are made by the plaintiff from Broken Hill to a destination in South Australia, but once again the paragraph and the particulars do not contain any allegation that the contract required the petroleum products to be delivered across a State border. It therefore follows that in my view on the allegations in the statement of claim the plaintiff has failed to make out that it is engaged in interstate trade or that the sales that it makes are sales made in the course of that trade. Although the plaintiff is not engaged in interstate trade it may have a sufficient interest to invoke s. 92 if it can show that the Act contravenes the section and that the application of the statute to interstate trade is inseverable from its application to intrastate trade. The first step in this argument is that s. 11 (1) is a provision which applies to sales made in the course of interstate trade—I do not accept the argument that in the context of s. 92 there is a material distinction between a prohibition against sale and a prohibition against carrying on the business of selling. Either prohibition, it seems to me, is a burden on interstate trade. The relevant prohibition is against the carrying on of the business of selling petroleum products without a licence. The Commissioner has a discretion to grant or refuse a licence, the criteria to be applied being left at large (s. 19). The licensing scheme cannot be justified as a regulation of the trade, for the legislation makes no attempt to prescribe or insist upon standards. Rather, the licensing system is a means of imposing and collecting a tax in the form of the licence fees which are prescribed by s. 14. That section makes no allowance, in calculating the amount of the licence fee payable, for quantities of petroleum products sold in the course of interstate trade. Consequently, it is my opinion that the Act, to the extent to which it applies to sales made in the course of that trade, contravenes s. 92, by prohibiting the carrying on of business which includes the making of such sales otherwise than as authorized by a licence for which fees are payable, the amount of the fee constituting a tax on the trade. Likewise, the penalty imposed by s. 11 (1a) is a tax on interstate trade to the extent to which it is capable of being imposed on a person in respect of sales made in the course of that trade otherwise than as authorized by a licence. The question, then, is whether the relevant provisions of the Act are capable of severance. The Act does not contain a reading down portion, although a reference to interstate trade is to be found in s. 4 (4). It is therefore necessary to look to s. 22a of the Acts Interpretation Act, 1915 S.A., as amended. It provides, so far as it is material: (1) Every Act and every provision of an Act shall be construed so as not to exceed the legislative power of the State. (2) Any Act or provision of an Act which, but for this section, would exceed the power of the State, shall nevertheless be a valid enactment to the extent to which it does not exceed that power. This section is not expressed so as to give the Act a distributive operation with respect to acts, matters, persons and things within legislative power; nevertheless it is sufficient in my opinion to enable s. 11 (1) to be read down so as to apply only to the business of selling petroleum products intrastate (see Cam & Sons Pty. Ltd. v. Chief Secretary (N.S.W.) [45] ; Wilcox Mofflin Ltd. v. New South Wales [46] ). I would therefore regard the prohibition contained in s. 11 (1) as capable of being severed so as to apply to the carrying on of the business of selling petroleum products otherwise than in the course of interstate trade. The prohibition contained in s. 13 should be similarly read down. 1. (1951) 84 C.L.R. 442. 2. (1952) 85 C.L.R. 488, at p. 523. The next question is whether the provisions in s. 14 respecting the payment of licence fees are also capable of severance. In my opinion they are. Once regard is had to s. 22a the Act should be given an operation which confines its application to intrastate trade. Conformably with this approach licence fees should be calculated by reference to the prescribed percentage of the value of the quantity of petroleum products sold by the applicant otherwise than in the course of interstate trade (s. 14 (2)). Likewise, in computing the quantity of petroleum products non-accountable in respect of a period, petroleum products sold in the course of interstate trade should be left out of account. In the result I would allow the demurrer and dismiss the suit. Jacobs J. The Business Franchise (Petroleum) Act, 1974-1975 S.A. provided by s. 11 that a person should not carry on the business of selling petroleum products unless he was the holder of a licence. The plaintiff carried on at the relevant time the business of selling petroleum products. The type of business carried on by it would under the Act have required a licence under class 5 or class 8 depending upon whether the addition of petroleum additives to petroleum products already manufactured constitutes the manufacture of a fresh petroleum product. A class 5 licence is defined in s. 4 (1) to mean— a licence that authorizes the licensee to carry on the business of selling petroleum products manufactured by him and petroleum products not manufactured by him and to sell them to other licensees or to persons who are not licensees, if, in the case of the sale of any petroleum product prescribed for the purposes of this class of licence to such a person, the quantity of that petroleum product is not less than the quantity of that petroleum product prescribed for that purpose: A class 8 licence is defined to mean— a licence that authorizes the licensee to carry on the business of selling petroleum products not manufactured by him and to sell them only to other licensees or to persons who are not licensees, if, in the case of the sale of any petroleum products prescribed for the purposes of this class of licence to such a person, the quantity of that petroleum product is not less than the quantity of that petroleum product prescribed for that purpose: The conditions for sale under these licences to persons who are not licensees deal with sales on a small scale and require no particular elaboration for the purposes of this case. It may be that the plaintiff which also conducted some service stations directly as part of its business would have required a class 9 licence which is defined to mean— a licence that authorizes the licensee to carry on at the premises specified in the licence the business of selling, at the premises specified in the licence, petroleum products not manufactured by him and not manufactured at those premises and to sell them only to persons who are not licensees .In fact the plaintiff had no licence at all during the relevant period when it made sales of petroleum products. Thereby it offended against the requirement of s. 11. The calculation of licence fees is provided for in s. 14. Fees are prescribed for each class of licence in (a) a lump sum and (b) "the prescribed percentage of the value of the quantity of petroleum products sold by the applicant during the relevant period reduced by the quantity of any petroleum product non-accountable in respect of that period". Section 14 (1) provides: 14. (1) A reference in this section to the quantity of any petroleum product non-accountable in respect of a relevant period in relation to which any part of a fee for a licence is assessed is a reference to the quantity, if any, of any petroleum product, being a petroleum product which was sold by that licensee to another licensee, whether or not during that period, and— (a) which was resold by that other licensee during that period; (b) which, in the opinion of the Commissioner, was wasted or lost by spillage, evaporation, theft or fire by that other licensee during that period; or (c) which at the end of that period was, in the opinion of the Commissioner, held for resale by that other licensee, reduced by the quantity, if any, of that petroleum product which was sold by the firstmentioned licensee to that other licensee and which at the end of the next preceding relevant period was, in the opinion of the Commissioner, held for resale by that other licensee. "Relevant period" is defined in s. 4 (1) to mean— (a) in relation to a licence that is to be in force during the first licence period—the financial year ending on the thirtieth day of June, 1974; and (b) in relation to a licence that is to be in force during a subsequent licence period—the financial year ending on the thirtieth day of June last preceding the commencement of that licence period: Broadly speaking, the effect of s. 14 (1) is that no licence fee other than the small lump sum is payable by a wholesale distributor of petroleum products if the sale and distribution of the products have been made at any time to retailers licensed under class 9 and the products have been resold by the retailer during the relevant period. The retailer, since he does not sell to a licensee but to the public, has no non-accountable quantity under s. 14 (1). The class 9 licensee thus is liable for a large licence fee, and any particular lot of petroleum products is only brought in once over all in the calculation of the licence fees payable for licences granted in any one licence year. The plaintiff claims that the whole Act is invalid because its purpose and effect is to set up a scheme for the collection of the fees and because the collection of those fees is the collection of duties within the meaning of s. 90 of the Constitution. The plaintiff submits that it is entitled so to claim even though, not having been licensed, it never became liable to pay licence fees. I think that this submission is correct but, whether or not that be so, the plaintiff has a sufficient interest to challenge the validity of those parts of the Act which impose fees for licences, particularly as under the 1975 amending Act the penalty for the breach of s. 11 is, in addition to a lump sum, such amount as is certified by the Commissioner of Stamps as the amount by which the convicted person has benefited financially through the non-payment of licence fees. The penalty thus becomes a mechanism for the collection of the impugned fees. The principle of stare decisis has a particularly important application in a field such as the limits of the taxing powers of the States. The difficult and delicate balance between the Commonwealth and the States on fiscal matters may be currently being preserved upon the basis of decisions previously given by this Court. A previous decision of this Court should not be overruled unless the Court is convinced not only that it was wrongly decided but that adherence to the decision is leading to social, economic or political consequences which cannot be tolerated by the nation, consequences perhaps not foreseen when the decision was given. The fact that the consequences of decisions in constitutional cases cannot be readily altered by the legislature must result in a willingness, when necessary, to review a previous decision but on the other hand there must be a reluctance so to do unless circumstances compel such a review. The principle of stare decisis, however, falls only to be applied within the limits of the principle itself. It is trite law that any case is only authority for what it actually decides. A case is not authority for the process of reasoning or the multitude of processes of reasoning which may appear in the reasons for judgment. It is a necessary part of the practice whereby reasons for decision are expressed that general principles should be formulated and expressed and such formulations by a process of reasoning, particularly, a process of reasoning agreed on by a majority of the Court may provide a most compellingly persuasive precedent for the decision of a case where the facts, or, as frequently happens in constitutional cases, the impugned laws are different; but they do not govern the decision of the later case. If the earlier case is to be distinguished, the point or points of distinction must be relevant to the subject matter upon which the Court has given its decision, and the reasons for choosing to distinguish rather than to follow the earlier decision must be explored so that the course which is emerging in development of a principle, great or small, can be the better predicted. That is the path to certainty in the law through the principle of stare decisis. There can be no certainty or predictability in the course of decision if the area of choice is not recognized and explored or if the process of choice is elided. At the same time it must be borne in mind that the area of choice is seldom large and the choice itself seldom radical. Not to bear this in mind is no less an error than a failure to recognize the process of choice itself. No provision of the Constitution can be absolutely defined in the sense that there can be an exhaustive epexegesis which as a binding formula can be applied to any set of facts or circumstances or to impugned legislation. I am aware as I write that my intention may be misunderstood and that, if I do not reiterate the contrary, it may be said that my approach would lead to vagueness, uncertainty and a chance that the Constitution would fall to be applied in accordance with individual predilections ungoverned by authority. I intend exactly the opposite. The judicial process requires that the inevitable choices which fall to be made by judges be confined within the limits which training, tradition, respect for the opinions of other members of the Court, past and present, and the ordinary intellectual processes of argument impose. But the process is inductive; it is not deductive from a generalization made in an earlier case. I would say that particularly is this so when the generalization is an epexegesis upon the words of the Constitution. I have been minded to elaborate on the nature of precedent because I believe that it assists in an approach to the present case. I do not think that any of the actual decisions upon s. 90 conflict with each other but there are considerable divergencies in the reasoning expressed for the decisions. I propose therefore to look at the decisions on s. 90 for what they decided. In Peterswald v. Bartley [47] it was held that brewers' licence fees payable under a statute which provided that every brewer should have a licence to carry on the business of brewing, and that the licence should be granted to a particular person in respect of particular premises and that the fee was a flat fee, were not a duty of excise within the meaning of s. 90. It was thereby necessarily decided that "duties of excise" within s. 90 did not have the same meaning as the term "excise duty" as that term was used in England where a brewer's licence fee would be described as an excise duty. However, the decision is strictly only an authority in respect of licences (a) which provide for the carrying on of the business on particular premises and (b) where the amount of the licence fee does not depend upon the quantity or value of beer manufactured. It did not necessarily decide that a duty of excise was a tax on goods but the reasoning ex converso the English use of the word would powerfully support such a proposition. It certainly did not decide on what goods either in respect of kind or stage of creation, distribution or consumption the duty had to be a tax before it could be described as a duty of excise. 1. (1904) 1 C.L.R. 497. In The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia [48] it was held that a statute of the State of South Australia imposing a tax on a vendor of motor spirit calculated at the rate of three pence for every gallon of motor spirit sold by him within the State was invalid under s. 90. It was necessarily held that such a tax was a duty of customs or a duty of excise within the meaning of those words in s. 90. It was also held that a tax imposed on any person who used any motor spirit in excess of a certain quantity which he has purchased or obtained outside the State of South Australia for the purpose of propelling any motor vehicle on any street or road within the State calculated at the rate of three pence per gallon of motor spirit so purchased or obtained or so used was invalid but no majority of the members of the Court determined that this tax was invalid by virtue of s. 90 of the Constitution. That question therefore remained undecided. There was a difference of opinion whether a tax on goods not produced or manufactured in the State was a duty of customs or a duty of excise but it was unnecessary to determine this question because if all other conditions were satisfied the tax would be either a duty of customs or a duty of excise and s. 90 applies indifferently to both. 1. (1926) 38 C.L.R. 408. The Commonwealth Oil Refineries Case [48] also decides that a tax may be a s. 90 duty even though it be imposed on a vendor personally if it is imposed at a rate calculated on the quantity of goods sold. It did not decide that every tax imposed on a vendor at a rate calculated on the quantity of goods sold was a s. 90 duty because that question did not arise for decision. But it was decided that a tax could be a s. 90 duty if it was calculated on the quantity of goods sold provided at least that the sale was the first sale after manufacture, production or importation. 1. (1926) 38 C.L.R. 408. In John Fairfax & Sons Ltd. v. New South Wales [49] it was held that a statute imposing a tax of one halfpenny upon each copy of a newspaper published in editions of more than 15,000 copies in New South Wales and issued for sale and actually sold was a s. 90 duty. The tax not being on imported goods, it therefore decided that the tax was a duty of excise and is therefore authority for the proposition that a tax on goods produced or manufactured in a State is a duty of excise when the tax is calculated by reference to the goods produced or manufactured and then sold. 1. (1927) 39 C.L.R. 139. In Crothers v. Sheil [50] it was held that a statute providing for a compulsory acquisition by a board of milk, a sale thereof, a payment for the compulsory acquisition on the basis of a notified minimum price and payment, out of the difference between the minimum price on acquisition and the price on sale, of expenditure incurred in treatment, carriage, distribution and sale, and the costs, charges and expenses of administration by the board and the provision of a sinking fund in respect of the principal and interest on any loan raised by the board, did not infringe s. 90 by imposing a duty of excise. 1. (1933) 49 C.L.R. 399. In Attorney-General (N.S.W.) v. Homebush Flour Mills Ltd. [51] it was held that a statute providing for the compulsory acquisition of flour from an owner at a fair and reasonable price as fixed by a committee, for the resale of the flour, and for a first right in that prior owner to purchase the flour in his possession, which had been compulsorily acquired, at a standard price fixed by the Governor, imposed a duty of excise in respect of the difference between the price at which the flour was acquired and the price at which it was resold to the prior owner. The case is authority for the proposition that a duty of excise need not necessarily be imposed in the form of a direct compulsory levy or tax. 1. (1937) 56 C.L.R. 390. In Hartley v. Walsh [52] there were dicta by the majority that a levy upon the owners of any registered packing shed in a sum determined by a board not exceeding an amount equal to 1/32 per penny per pound of the value of the dried fruits sold or forwarded for sale from the packing shed in the preceding year by way of contribution towards the expenditure of the Victorian Dried Fruits Board was not a duty of excise. I refer to these dicta because of the discussion of this case in later cases. 1. (1937) 57 C.L.R. 372. In Matthews v. Chicory Marketing Board (Vict.) [53] it was held that a levy on producers of £1 for every half acre of land planted with chicory during a prior annual period where the statute provided that the proceeds of the levy should be applied in payment of expenses, in repayment of advances to a board, in effecting insurances and in work directed to the improvement of the quality of the commodity was a duty of excise within the meaning of s. 90. It was thereby decided that a tax, in order to be a duty of excise, need not necessarily be imposed on goods already in existence or in a relationship to the quantity or value of goods produced which can be precisely ascertained. It was also decided that the disposition of the proceeds of the tax in the way provided in the statute did not give validity. 1. (1938) 60 C.L.R. 263. In Hopper v. Egg and Egg Pulp Marketing Board (Vict.) [54] , the legislation was in relevant respects similar to the milk legislation in Crothers v. Sheil [55] which was applied and the levy was held not to be a duty of excise. 1. (1939) 61 C.L.R. 665. 2. (1933) 49 C.L.R. 399. In Parton v. Milk Board (Vict.) [56] a statutory provision imposing upon a dairyman (other than the owner of a milk shop), and empowering a board to determine the amount of, a levy in a sum not exceeding one farthing per gallon of milk sold by him was held invalid as imposing a duty of excise within s. 90. "Dairyman" was defined to mean the owner of a dairy within the metropolis and "dairy" was defined to mean inter alia any premises (not being solely a dairy farm or factory) where milk was kept for sale. The case decided that a tax upon goods at the point of sale as well as at the point of production or manufacture could be and was in that case a duty of excise. 1. (1949) 80 C.L.R. 229. In Browns Transport Pty. Ltd. v. Kropp [57] a statute which required vehicles for the carriage of passengers or goods to be licensed and enabled a licence fee to be fixed at an amount per centum of the gross revenue derived by the licensee from the carrying on of the service authorized by the licence was held not to provide for the imposition of a duty of excise. The decision is authority for the proposition that a tax calculated upon the revenue earned from such a service as the carriage of goods is not a tax upon the goods carried. It did not decide that a tax calculated upon the quantity or value of goods carried was not a duty of excise. 1. (1958) 100 C.L.R. 117. In Dennis Hotels Pty. Ltd. v. Victoria [58] it was held that a licence fee payable in respect of a victualler's licence for the conduct of an hotel on certain premises, where the licence fee was calculated as a percentage of the gross amount paid or payable for all liquor which during the twelve months ended on the last day of June preceding the date of application for the grant or renewal of the licence was purchased for the premises was not a duty of excise. It was also held that a licence fee for a temporary victualler's licence enabling the holder of an annual victualler's licence in respect of certain premises to sell liquor at an agricultural show, at a regatta and at any of a number of other specified temporary amusements or games where the licence fee was a small sum per day in respect of each booth, stall, bar or place from which liquor would be sold and a further fee calculated as a percentage of the gross amount paid or payable for all liquor purchased for sale or disposal under such licence was a duty of excise. The decision is authority for the proposition that a licence fee in respect of a licence for the sale of alcoholic beverages at particular premises is not a duty of excise where the licence fee is calculated as a percentage of the purchase price of liquor purchased for sale at those premises at least where the percentage is calculated on the purchase price of liquor purchased for sale at those premises during a period preceding the period for which the licence is granted. The decision is also authority for the proposition that a licence fee where (a) the licence does not license sale at premises of the licensee but licenses sale at a public place of amusement on a particular occasion and (b) the licence fee is calculated on the value of liquor purchased for sale under that licence is a duty of excise. 1. (1960) 104 C.L.R. 529. In Swift Australian Co. (Pty.) Ltd. v. Boyd Parkinson [59] it was held that a fee payable by the occupier of an abattoir or slaughter-house expressed to be for the purpose of defraying the expenses of inspection of meat for sale and of carrying the Act into effect calculated at one shilling per 1001b of broken up carcase of beef where the fee was payable into Consolidated Revenue was a duty of excise. 1. (1962) 108 C.L.R. 189. In Bolton v. Madsen [60] it was held that the use of a vehicle for the carriage of wool by the owner of the wool who was also the charterer of the vehicle without a permit having been issued to him to carry the wool on the vehicle where a fee was payable for the permit and where the fee demanded was 3d. per ton per mile on the registered carrying capacity of the vehicle was validly made an offence. It was also held that the imposition of a charge of double the fee which would have been payable for such a permit when the wool was carried without a permit was not the imposition of a duty of excise. It did not decide that a fee calculated on the quantity of wool carried was not a duty of excise. 1. (1963) 110 C.L.R. 264. In Anderson's Pty. Ltd. v. Victoria [61] it was held that a duty, to be collected by stamping of the instrument or by payment to the Controller of Stamps in the case of approved vendors, in respect of hire purchase agreements where the duty was fixed at the rate of two per cent of the "purchase price" (as defined) of the goods, defined as the total amount payable under the agreement less the deposit and interest, insurance and other charges, and where the preparation of an instrument by the vendor was made compulsory and where the vendor was forbidden to add the amount of the duty to any amount payable by the purchaser of the goods was not a duty of excise. 1. (1964) 111 C.L.R. 353. In Harper v. Victoria [62] it was held that a fee payable to a board expressed to be and in fact for the grading, testing, marking and stamping of eggs by the board or a person, including a producer of the eggs, authorized by the board, where the sale of eggs which had not been graded, tested, marked and stamped was forbidden and made an offence, and where the fees did not pass from the board into Consolidated Revenue but were included in the funds of the board from whose surplus final payments would be made to egg producers, was not a duty of excise. 1. (1966) 114 C.L.R. 361. In Western Australia v. Chamberlain Industries Pty. Ltd. [63] and in Victoria v. I.A.C. (Wholesale) Pty. Ltd. [63] it was held that a stamp duty (so called in the statute) payable on any instrument of receipt of moneys representing payment of the wholesale price of new goods sold and either manufactured (Chamberlain) or not manufactured (I.A.C.) by the trader where the tender of an instrument of receipt was made compulsory and where a trader could elect in lieu of issuing receipts to pay the stamp duty after submission of a statement of total amounts received by the trader, was a duty of excise within the meaning of s. 90. 1. (1970) 121 C.L.R. 1. 2. (1970) 121 C.L.R. 1. In Dickenson's Arcade Pty. Ltd. v. Tasmania [64] it was held that a fee payable for a licence to sell tobacco by retail on designated premises where the statute required a person selling tobacco by retail to be licensed so to do on the premises in which the selling takes place and where the fee was to be calculated (with stated minimum) at a rate of thirty per cent of the average value over a period of twelve months expiring six months prior to the commencement of the period of the licence at retail values of tobacco handled in the retail business on the premises during that period, was not a duty within the meaning of s. 90. It was also held that a tax imposed on a person for consuming tobacco, the amount thereof being calculated on the value of tobacco consumed according to the usual retail price was not a duty within the meaning of s. 90. 1. (1974) 130 C.L.R. 177. In M. G. Kailis (1962) Pty. Ltd. v. Western Australia [65] a fee payable in respect of a fish processor's licence where the statute required a licence to be held by any person operating a processing establishment in respect of that processing establishment and where the fee was calculated at a percentage of the gross amount of the value of fish caught, and the moneys paid or payable for fish purchased, for processing in the processing establishment during the period (presumably the period of a year) ending 30th June next preceding the commencement of the licence period and where the fee in the case of an establishment not in operation during the prior period was such amount as the Minister might fix having regard to his estimate of the probable extent of the annual catches and purchases of fish for processing in the establishment, was held to be a duty of excise within the meaning of s. 90. 1. (1974) 130 C.L.R. 245. It appears to me that the following propositions have been established by the authorities. A duty of excise under s. 90 is a tax on goods: Peterswald v. Bartley [66] . The goods taxed may be primary production: Matthews v. Chicory Marketing Board (Vict.) [67] ; Parton v. Milk Board (Vict.) [68] ; or manufactured goods: John Fairfax & Sons Ltd. v. New South Wales [69] . The fact that the tax is payable personally by a nominated person—producer, manufacturer, vendor or purchaser (other than ultimate consumer), does not prevent the tax being a tax on goods: passim. The goods do not have to be in existence at the time the tax is calculated: Matthews v. Chicory Marketing Board (Vict.) [70] and a sum payable may be a tax on goods if it is so in substance though not in form: Commonwealth Oil Refineries Case [71] ; Homebush Flour Mills Case [72] ; Matthews v. Chicory Marketing Board (Vict.) [73] . However, although every duty of excise is a tax on or in relation to or in respect of goods, not every tax on or in relation to or in respect of goods is a duty of excise. A tax imposed on a consumer in respect of the ultimate consumption of goods is not a duty under s. 90: Dickenson's Arcade Pty. Ltd. v. Tasmania [74] . A tax imposed on goods simply in relation to their ownership or use is not a duty of excise: Browns Transport Pty. Ltd. v. Kropp [75] ; Bolton v. Madsen [76] . A tax on goods which is a duty of excise may be one imposed in relation to their production: Matthews v. Chicory Marketing Board (Vict.) [73] ; M. G. Kailis (1962) Pty. Ltd. v. Western Australia [77] ; or to their manufacture or processing: Homebush Flour Mills Case [72] ; Swift Australian Co. (Pty.) Ltd. v. Boyd Parkinson [78] ; or to their first sale after production or manufacture: Commonwealth Oil Refineries Case [71] ; John Fairfax & Sons Ltd. v. New South Wales [79] ; or to their subsequent sale: Parton v. Milk Board (Vict.) [80] ; Victoria v. I.A.C. (Wholesale) Pty. Ltd. [81] . A sum payable for services provided in respect of the goods themselves is not a tax: Harper v. Victoria [82] ; but a sum levied in respect of goods where services to be given are not wholly in respect of the goods is a tax on goods and is a duty of excise even where the proceeds are payable to a body providing services to the industry in which the goods are produced: Matthews v. Chicory Marketing Board (Vict.) [83] ; a fortiori where the proceeds are payable into Consolidated Revenue: Swift Australian Co. (Pty.) Ltd. v. Boyd Parkinson [84] . 1. (1904) 1 C.L.R. 497. 2. (1938) 60 C.L.R. 263. 3. (1949) 80 C.L.R. 229. 4. (1927) 39 C.L.R. 139. 5. (1938) 60 C.L.R. 263. 6. (1926) 38 C.L.R. 408. 7. (1937) 56 C.L.R. 390. 8. (1938) 60 C.L.R. 263. 9. (1974) 130 C.L.R. 177. 10. (1958) 100 C.L.R. 117. 11. (1963) 110 C.L.R. 264. 12. (1938) 60 C.L.R. 263. 13. (1974) 130 C.L.R. 245. 14. (1937) 56 C.L.R. 390. 15. (1962) 108 C.L.R. 189. 16. (1926) 38 C.L.R. 408. 17. (1927) 39 C.L.R. 139. 18. (1949) 80 C.L.R. 229. 19. (1970) 121 C.L.R. 1. 20. (1966) 114 C.L.R. 361. 21. (1938) 60 C.L.R. 263. 22. (1962) 108 C.L.R. 189. Where the goods are compulsorily acquired and the difference between the price paid for the acquisition and the price on resale is allocated to payment of costs incurred in respect of the goods and other costs of the acquiring authority, the difference is not a tax and is therefore not a duty of excise: Crothers v. Sheil [85] . Contrast the case where the substance was not an acquisition but a mechanism for the recovery of a tax on the product: Homebush Flour Mills Case [86] . 1. (1933) 49 C.L.R. 399. 2. (1937) 56 C.L.R. 390. A duty payable on the stamping of an instrument for the hire purchase of goods is not necessarily a tax on goods even though the duty is calculated on the purchase price of the goods and the making of an instrument of purchase is compulsory: Anderson's Pty. Ltd. v. Victoria [87] but a duty payable on receipts is a duty of excise at least in the circumstances which existed in Western Australia v. Chamberlain Industries Pty. Ltd. [88] . See also Victoria v. I.A.C. (Wholesale) Pty. Ltd. [88] . 1. (1964) 111 C.L.R. 353. 2. (1970) 121 C.L.R. 1. 3. (1970) 121 C.L.R. 1. A fee for a licence to carry goods by road is not a duty of excise at least where the fee is calculated on the gross revenue earned from the service of carrying the goods: Browns Transport Pty. Ltd. v. Kropp [89] ; or where the fee is calculated on the registered carrying capacity of the vehicle: Bolton v. Madsen [90] . 1. (1958) 100 C.L.R. 117. 2. (1963) 110 C.L.R. 264. A fee for a licence to carry on a business of manufacturing goods for sale is not a duty of excise at least where the fee is calculated in a manner unrelated to the value or quantity of the goods manufactured: Peterswald v. Bartley [91] . Where the licence fee is calculated as a percentage of the price of goods purchased the fee may be a duty of excise: M. G. Kailis (1962) Pty. Ltd. v. Western Australia [92] ; but is not necessarily so where the goods are purchased for resale: Dennis Hotels Pty. Ltd. v. Victoria [93] ; Dickenson's Arcade Pty. Ltd. v. Tasmania [94] . The fact that the fee is calculated as a percentage of the value of production or the price of goods purchased during a period preceding the period for which the licence is granted does not necessarily prevent the tax being a duty of excise. At least it will not do so where the producer or purchaser produces or purchases the goods for the purpose of processing: M. G. Kailis (1962) Pty. Ltd. v. Western Australia [92] . 1. (1904) 1 C.L.R. 497. 2. (1974) 130 C.L.R. 245. 3. (1960) 104 C.L.R. 529. 4. (1974) 130 C.L.R. 177. 5. (1974) 130 C.L.R. 245. Where the fee is for a licence to conduct on particular premises the business of selling by retail to the public in unrestricted quantities a product containing a drug and where the fee for the licence in respect of a following period is calculated upon the turnover of the product at the licensed premises during a preceding period, the fee is not a duty of customs or excise within the meaning of s. 90: Dickenson's Arcade Pty. Ltd. v. Tasmania [94] . 1. (1974) 130 C.L.R. 177. It appears to me that there is a coherent pattern of decision. It is complex but it could hardly be expected to be otherwise. The general nature of the pattern is one which gives a fairly narrow meaning to the word "excise". Nevertheless the fact that the Constitution expressly forbids the States to impose duties of excise has been carried into effect. One of the factors of difficulty which may be said to lie behind the pattern is that it does not appear clearly from the Constitution itself or otherwise why the Constitution did in such absolute terms forbid the States to impose such duties. Another factor is that the balance of revenue sources to government has changed dramatically over the years since federation. I would not deny that these factors have in varying degrees influenced decisions but the fact remains that the States cannot impose excise duties. Any fundamental re-definition of excise which would reverse the course of decision would only institute another generalization from which it would be sought to have later decisions deductively determined. That is not the judicial process. The pattern which has emerged is not comprehensive and it could not be expected, within a pattern of a limited number of decisions, to be so. From the course of decision there can be discerned in the pattern the necessity to examine the characteristic of an excise duty which makes it not only a tax on commodities in their course between manufacture or production and the ultimate consumption of the commodity or its product but a tax which has as its basis or nature or as the criterion of the liability to pay it the fact that it is a commodity. This basis or nature or this criterion of liability may be found in various factors, e.g. the indirectness of the tax, the fact that the amount thereof can or will be incorporated in the price of the commodity, the fact that the liability is imposed on the taking of a step in the course of the commodity from manufacture or production to consumption. However, it appears to me that no single or simple statement of this characteristic can be definitive. Therefore there are and probably always will be questions still undecided. One such question is whether, and if so, in what circumstances, a tax on ownership will or may be a duty of excise. Another area of decision which will continue to be filled out in the future is when a tax is in substance, though not in form, a duty of excise. The question when a duty on an instrument may be a duty of excise will probably require elaboration. In all these areas a more detailed pattern will emerge. I would, however, point out that although the pattern of decision is still coherent it is showing signs of strain or distortion. On the one side there is the pressure of the decisions which have invalidated levies even where the legislature's expressed purpose was the creation of a fund devoted to the rationalization and improvement of the industry on whose production the levy has been sought to be imposed. On the other side there is a "bulge" whereby taxes in some circumstances at least can lawfully be raised by licence fees calculated by reference to the value or quantity of turnover in a commercial activity even though the purpose of the tax is unrelated to any purpose of rationalization or improvement of the industry reflected in that commercial activity. This, I think, is a danger signal. The part of the pattern with which the present case is concerned is that in respect of licences to carry on business where the licence fee is to be calculated as a percentage of the price of goods. The question which of the factors stated in the above propositions on this aspect are factors essential to a conclusion that a licence fee calculated on quantity or value of goods is not a duty of excise and the question whether the presence in legislation of other and, if so, what other factors can or may lead to a contrary conclusion are the questions which fall to be considered in the present case. In particular, the question arises whether the further factor that the amount of the fee is adjustable as a consequence of the payment of an equivalent amount in respect of the product by another person dealing with the product in its course from production to ultimate consumption is a relevant factor. Where on an examination of the legislation as a whole it appears that the purpose of the licensing is the facilitation of the collection of the tax and not the control of commercial operations in respect of the product in its course from production to consumption, then at least the tax will be a duty of excise within the meaning of s. 90. Whether or not any particular piece of legislation should be so regarded cannot be deduced from a formula. The answer will depend on a consideration of the operation of the legislative provisions in the conditions of our society with which the Court is familiar and of which, if it be thought necessary in a particular case, the Court can be more particularly informed. Having examined the subject legislation I am not left in any doubt whatsoever that the licensing of the businesses is no more than a convenient mechanism for collecting the so-called licence fees. I say "so-called" because it seems to me that the effect of s. 14 (1) taken in conjunction with the provisions of s. 22 for adjustment of fees is that, except for the small lump sum payment, the scheme of the Act is that a sum of money calculated by reference to the quantity of petroleum products which has commenced its movement from production, manufacture or importation to ultimate consumption shall be paid to the State once, and once only, in the course of that movement. The licence fee in so far as it is calculated on the quantity of petroleum products is the collection at the end of any particular period of that "once only" sum calculated on sales made in that period. The liability to pay does not accrue from sale to sale in that period so that there is not the sanction that it may be recovered by action. Instead there is the sanction of a compulsory cessation of trade if it is not paid at the end of the period. Such an operation of the statute is the imposition of a tax on petroleum products. The legal effect is no different from what it would have been if the statute had without requiring any licence provided that no person should sell a petroleum product unless a tax had been paid or was due to be paid to the State (not necessarily by him but by someone) on all petroleum products sold by him during a specified preceding period. When the statute at the same time provides a mechanism whereby the tax can be collected, surely the tax is on the products of that preceding period. It has been submitted that the effect of this conclusion would be to overturn the course of past authority: Dennis Hotels Pty. Ltd. v. Victoria [95] ; Dickenson's Arcade Pty. Ltd. v. Tasmania [96] a course upon which the financial relationship between the States and the Commonwealth has come to depend. In my opinion the first of the above cases did not establish that a licence fee where the fee is calculated on trading in a prior period is in every case not a duty of excise. In view of M. G. Kailis (1962) Pty. Ltd. v. Western Australia [97] it cannot be said that Dickenson's Arcade Pty. Ltd. v. Tasmania [96] is authority for such a proposition. What has happened is that decisions that a licence fee is not necessarily a duty of excise where the amount of the fee is calculated on the basis of dealings in a commodity for a preceding period has been taken by the legislature to be a decision that a licence fee cannot be a duty of excise provided that the fee is so calculated. This has been treated as a so-called "logical" consequence and the State has chosen to pass legislation accordingly. So-called "logical" extensions of a past decision are seldom a sufficient ground for forecasting a future decision, because a regard only to the so-called logic fails to take account of the further factors which make the later case not merely an application but an extension of the earlier decision. Moreover, the financial relationship between the States and the Commonwealth has not come to depend on the course of decision of this Court in this respect. The attempted effectuation of the idea that by setting up a licensing system in respect of dealing in any commodity at all, the States can overcome the s. 90 embargo on imposition of excise duties is of comparatively recent origin. It must be curbed now before the Court is faced either with the virtual supersession of s. 90 or a need at some later time to cry halt. In my opinion the time is now. 1. (1960) 104 C.L.R. 529. 2. (1974) 130 C.L.R. 177. 3. (1974) 130 C.L.R. 245. 4. (1974) 130 C.L.R. 177. I am prepared to distinguish Dennis Hotels Pty. Ltd. v. Victoria [98] and Dickenson's Arcade Pty. Ltd. v. Tasmania [99] upon the ground that in both of them there was present in the impugned legislation a concatenation of factors—the nature of the product and the licensing of premises for the sale of the product—sufficient to enable it to be held that the calculation of the licence fee by reference to the value or quantity of the product dealt with in a preceding period was no more than a method of quantification of that licence fee and not a tax upon the product dealt with in the preceding period. I find it quite impossible to say that of legislation where the licence is no more than a mechanism for collection of a tax or levy on dealings in a product during a prior period. 1. (1960) 104 C.L.R. 529. 2. (1974) 130 C.L.R. 177. I would overrule the demurrer. Murphy J. The plaintiff claims: 1. that the licence fee requirements of the Business Franchise (Petroleum) Act 1974-1975 are an imposition of duties of excise contrary to s. 90 of the Constitution; 2. that they contravene the guarantee of freedom in s. 92 of the Constitution; and 3. that the requirements are invalid, either entirely or to the extent of the contravention. Section 90 of the Constitution. Section 90 prohibits State duties of excise by declaring that "On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive" and by declaring that all State laws imposing duties of customs or excise shall then cease to have effect. State duties of excise for the purposes of Ch. IV of the Constitution are taxes on goods produced or manufactured in the State (see s. 93). Of course the tax is payable by some person, but it is a tax imposed by reference to goods produced or manufactured (or to the production or manufacture of goods) within the State. Even if there were no s. 90 or s. 92, a State could not impose a tax simply on production or manufacture of goods outside the State. This is because of well-recognized limitations on the competence of a State to legislate about things or conduct outside its territory. (These limitations are consistent with the meaning of excise gathered from s. 93.) If a State imposes a tax (which except for s. 92, would be within its competence) on goods in or coming into the State which discriminates against those goods by reference to their production or manufacture outside, this would be a duty of customs prohibited by s. 92 (see Fox v. Robbins [1] ). 1. (1909) 8 C.L.R. 115. If it imposes a tax on goods without reference to their place of production or manufacture, for example, a sales tax or licence fee for sale or distribution, or a consumption tax which applies to all goods whether from inside or outside the State, this is not a customs duty (or similar charge) prohibited by s. 92 (see Fox v. Robbins; my judgment in Buck v. Bavone [2] ). Nor, despite the observation by Dixon C.J. in Dennis Hotels Pty. Ltd. v. Victoria [3] is such a tax a State duty of excise in respect of goods produced or manufactured within the State. A tax imposed (invalidly because of s. 90) by a State on production or manufacture of goods, must be one on production or manufacture within the State (because of the combined effect of s. 92 and the territorial limitations on the competence of the State) and must discriminate against such local production or manufacture. A non-discriminatory tax on sales or distribution or consumption is neither a duty of customs nor of excise. 1. (1976) 135 C.L.R. 110, at pp. 132-138. 2. (1960) 104 C.L.R. 529, at p. 540. Thus, goods produced or manufactured in any State may be sold, distributed or consumed in any other State on an equal basis of taxation with goods produced or manufactured in the other and all other States. A State may impose taxes on the sale or distribution or consumption of goods; if these do not discriminate between those produced or manufactured inside and those outside the State, neither s. 90 nor s. 92 is infringed. The Act involves no discrimination of this kind. The licence fee is not an excise. In my opinion it makes no difference whether the calculation of the licence fee is based upon transactions of a past financial year or on those of the current year. I do not regard the test in Dennis Hotels v. Victoria [4] and Dickenson's Arcade Pty. Ltd. v. Tasmania [5] as satisfactory for determining whether s. 90 of the Constitution applies. 1. (1960) 104 C.L.R. 529. 2. (1974) 130 C.L.R. 177. Section 92 of the Constitution. I accept that the relevant business activities of the plaintiff were largely part of trade and commerce among the States because they concerned more than one State (see Gibbons v. Ogden [6] ; Bank Nationalization Case [7] ). Because of the absence of adverse discrimination against that trade and commerce (see Fox v. Robbins [8] and for the reasons which I gave in Buck v. Bavone [9] ) the legislation does not contravene s. 92. 1. (1824) 9 Wheat 1 [6 Law Ed. 23]. 2. (1949) 79 C.L.R. 497; [1950] A.C. 235. 3. (1909) 8 C.L.R. 115. 4. (1976) 135 C.L.R., at pp. 132-138. The Business Franchise (Petroleum) Act 1974-1975 is valid. I would allow the demurrer and dismiss the action.