Commissioner of Taxation (Cth) v Jack Zinader Pty Ltd [1949] HCA 42

High Court of Australia Dixon, Williams and Webb JJ. Commissioner of Taxation (Cth) v Jack Zinader Pty Ltd [1949] HCA 42

ORDER Question answered in the affirmative. Judgment for the plaintiff for £311 2s. 1d. with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Sept. 27 Dixon J.

The question for our decision is whether fur coats, stoles, capes and collars formed by remodelling fur garments are, for the purposes of the Sales Tax Assessment Act (No. 1) 1930-1942, goods manufactured and sold.

Section 17 of that Act provides that sales tax shall be levied and paid upon the sale value of goods manufactured in Australia by a taxpayer and sold by him. Section 17A imposes upon a transaction by which one person manufactures goods for another out of that other's material the artificial character of a sale. The section provides that where goods are manufactured for a person wholly or in part out of materials supplied by him the manufacturer of the goods shall for the purposes of the Act be deemed to have sold the goods to the first-mentioned person, at the time of their delivery to him for the amount charged to him by the manufacturer in respect of those goods. Section 18 (1) (c) makes the amount so charged the sale value of the goods for the purposes of the Act. That, however, is subject to s. 18 (5A) and Part IIIa. of the regulations which together operate to reduce the sale value. The word "manufacture" is defined by s. 3 (1) (b) to include the combination of parts or ingredients whereby an article or substance is formed which is commercially distinct from those parts, subject to a qualification that is not in point.

The taxpayer in the present case, a company which is the defendant in the action, carries on business in Sydney as a furrier and repairs and remodels fur garments. The company is registered under the Act as a manufacturer.