Commissioner of Taxation v Myer Emporium Ltd [1986] HCA 13

High Court of Australia Dawson J. Commissioner of Taxation v Myer Emporium Ltd [1986] HCA 13

ORDER Order that the execution of the judgment of the Supreme Court dated 20 March 1985, save for the order for costs, be stayed until the hearing and determination of the appeal or further order. Costs of the appearances to be costs in the cause. Dawson J.

For the year of income ended 31 July 1981 the Commissioner of Taxation assessed the income of the taxpayer, The Myer Emporium Ltd., upon the basis that a sum of $45,370,000 received by it was income and not a capital receipt. Following an unsuccessful objection to the assessment, the taxpayer appealed to the Supreme Court of Victoria which on 20 March 1985 allowed the appeal and ordered that the Commissioner issue an amended assessment excluding from the taxable income of the taxpayer the amount of $45,370,000. It also ordered that the Commissioner pay the taxpayer's taxed costs of the appeal.

The Commissioner appealed against this judgment to the Full Court of the Federal Court of Australia which on 8 October 1985 dismissed the appeal. On 15 November 1985 the Commissioner was given special leave to appeal to this Court against the judgment of the Federal Court and an appeal was instituted on 28 November 1985.

The Commissioner seeks in this application to stay the order made by the Supreme Court pending the hearing and determination of the appeal in this Court. In order to appreciate the basis of the application, it is necessary to set out some of the history of the matter.

On 19 April 1982, the taxpayer's income tax was assessed in the sum of $34,512,508.78 for the year of income ended 31 July 1981, of which the sum of $20,870,200 was in respect of the sum of $45,370,000 which the taxpayer said was a capital receipt but which the Commissioner said was income. The taxpayer lodged its objection to the assessment on 17 May 1982 and requested an extension of time for payment of the tax upon the disputed amount pending the determination of the objection. The Deputy Commissioner of Taxation in Melbourne refused to grant any extension of time and advised the taxpayer that additional tax would accrue in accordance with s. 207 of the Income Tax Assessment Act 1936 Cth. He said, however, that no action would be taken to recover the tax pending the determination of the objection. Following further correspondence and discussion between the parties and after the disallowance of the objection, the Deputy Commissioner sent a letter dated 20 March 1984 to the taxpayer's accountants in which he said: