Denver Chemical Manufacturing Co v Commissioner of Taxation [1949] HCA 25

High Court of Australia Dixon, McTiernan, Williams and Webb JJ. Denver Chemical Manufacturing Co v Commissioner of Taxation [1949] HCA 25

ORDER Appeal dismissed.

Cur. adv. vult.

The following judgments were delivered:—

July 29 Dixon J.

This proceeding is an appeal by a taxpayer from a decision of the Board of Appeal established under the Income Tax (Management) Act of New South Wales. The decision confirmed amended assessments for years of income ended on 30th June 1923 and 30th June of each succeeding year to 1934. The amendments were made on 2nd July 1941, that is, before the Income Tax Management Act 1941 came into operation.

Having regard to the date of the notices of objection and of the decisions of the commissioner thereon, the Act of 1941 operates in respect of procedure in the proceedings both before the Board of Appeal and in the courts. But the liability of the taxpayer to tax and the measurement of its income is governed by the earlier Acts. As to the years from 30th June 1923 to 30th June 1928, the substantive liability of the taxpayer is governed by the Act of 1912. As to the years 30th June 1928 to 30th June 1934, it is governed by the Act of 1928.

The taxpayer is incorporated in New York and is registered in New South Wales as a foreign company and at all material times it carried on business here under the direction of a branch manager. During the years under consideration the business consisted of the manufacture and sale of a preparation which is called "Antiphlogistine" and is used in the course of medical treatment. Ingredients for the manufacture of the commodity, or some of them, were imported from the United States of America by this foreign company. Presumably the company was controlled and administered from New York and, at all events, the circumstances are such that its residence for fiscal purposes would no doubt be considered to be abroad. The manufacturing operations were conducted in Sydney. Canvassers were sent to other States of the Commonwealth, but, according to the evidence, with negligible exceptions, no sales were actually made in the other States of the Commonwealth. Not only were nearly all sales made in New South Wales, but deliveries were made either to purchasers in New South Wales or else, I presume, to carriers to whom the goods were entrusted on behalf of the purchasers.