Kot -v- Chief Commissioner of State Revenue [2002] NSWADT 38

CITATION: Kot -v- Chief Commissioner of State Revenue [2002] NSWADT 38 DIVISION: Revenue Division APPLICANT PARTIES: Theresa V Kot RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 016013 HEARING DATES: 13/02/2002 SUBMISSIONS CLOSED: 02/13/2002 DATE OF DECISION: 03/18/2002

BEFORE: Hole M - Judicial Member APPLICATION: Taxation Administration Act - liability to pay interest MATTER FOR DECISION: Principal matter LEGISLATION CITED : Land Tax Management Act 1956 Taxation Administration Act 1996 CASES CITED: APPLICANT REPRESENTATION: Theresa V Kot RESPONDENT Chief Commisioner of Statre Revenue ORDERS: 1. That the interest on late lodgment for the years 1996, 1997 and 1998 is payable by the Applicant; 2. That the Commissioner calculate and advise the Applicant within 28 days of the correct amount of interest payable in the circumstances which will be no more than $1,285.30.

1 The Applicant has applied for a review of the decision by the Commissioner in relation to properties that she has owned over a period of time. Prior to receiving a questionnaire from the Commissioner in 1998 the Applicant was unaware of her liability in respect of land tax. She promptly returned the form to the Commissioner when received and after considerable delay the Commissioner assessed the land tax payable by her over a period of 1991 to 1999. 2 During the period 1999 to the date of this Application, there has been considerable correspondence between the Applicant and the Commissioner which has established that she is liable to payment of various sums of land tax. The land tax has been paid and in some instances due to the correspondence between the Applicant and the Commissioner, there has been a refund of land tax. 3 The Commissioner initially assessed the Applicant and also assessed penalty tax and interest on late lodgment. The Commissioner used the discretion that the Commissioner has to remit the penalty tax on all years apart from the land tax years 1997 and 1998. 4 Since the date of lodgment of the Application, the Commissioner has further considered the matter under Division 1 of Part 10 of the Taxation Administration Act 1996 and has now remitted the penalty tax for the land tax years 1997 and 1998. 5 This has been intimated to the Applicant by way of a letter from the Commissioner dated 5 December 2001. 6 There is no doubt that the Applicant was not aware of a liability to pay land tax and over the period that she has been liable she has been attending to her various obligations including her considerable work and family obligations. 7 The Applicant received notices of valuation disclosing land value in respect of the property, these notices have not been produced to the Tribunal and it is noted that the information on those notices, although apparently drawing attention to the use of the certificate for rating and taxing authorities, there is no specific mention of the requirement to pay land tax. 8 The Applicant had not seen any material or educational program in relation to an obligation to pay land tax during the period prior to December 1998 when she received the Commissioner's land tax questionnaire. There is no doubt that if she had been aware of the possible liability to pay land tax that she would have taken the necessary steps to ensure that she complied with such a necessity. 9 The representative of the Commissioner submitted that the Commissioner engaged in advertising the necessity to pay land tax by way of education programs, brochures and pamphlets. He submitted that this information was not targeted at each individual citizen in New South Wales, that it was targeted towards professionals such as accountants and solicitors and organisations that may be involved in relation to land holdings. 10 The Applicant returned the December 1998 questionnaire promptly to the Department and there was considerable delay prior to any assessment being made and being returned to the Applicant. At this point of time the Commissioner proceeded to assess the land tax for the years 1991 through to 1998 inclusive and raised penalty tax and interest on late lodgement. As noted previously, as a result of the correspondence between the Applicant and the Commissioner, the Commissioner adjusted the assessments made to take into account the particular position of the Applicant, remitted penalty tax apart from the penalty tax imposed for the years 1997 and 1998 and raised interest on late payment for the years 1996, 1997 and 1998 land tax years. As noted the penalty tax has now been totally remitted in accordance with the letter dated 5 December 2001. 11 The Applicant submitted that she understands the commercial realty of the need to charge interest on unpaid monies and that the amount in the circumstances would be 4.89%. 12 The Applicant submitted that she is disadvantaged in relation to her lack of knowledge in terms of the manner in which submissions should be made to the Tribunal. The Applicant made clear and succinct submissions to the Tribunal and she provided comprehensive written submissions to the Tribunal which clearly show that she did not know of her liability in respect of land tax and that if she had known, she would have taken the appropriate action. She submitted that if the liability for land tax had been bought to her attention, then she would have complied with all of the necessary requirements, she also indicated that she had been in contact with an accountant. The Applicant made clear submissions in relation to the lack of information in the public domain and the insufficiency of the advertising by the Commissioner in respect of the public's liability. 13 The Applicant would not be the only person to find herself or himself in this position and for that reason the Commissioner has the ability to remit the penalty tax as the Commissioner has done in this instance. As a matter of public policy, the responsibility of the ownership of the property including the necessity to be assessed and pay rates and taxes on the property remains with the owner, this is a requirement of the Land Tax Management Act, 1996 which places the responsibility on a person who is or may be liable to pay land tax to furnish a return to the Commissioner to allow an assessment to be undertaken. 14 Having considered the submissions by the Applicant and those by the representative of the Commissioner and the relevant legislation, particularly Part 5 of the Taxation Administration Act, 1996 and taking into account that the Commissioner has remitted all penalty tax payable, and noting that in the event that the Applicant had been aware that land tax was assessable on the property there is no doubt that she would have completed a return and furnished it to the Commissioner at the appropriate time and noting that the interest rate assessed on late lodgement is 8.00% plus 4.89% I make the following orders: 1. That the interest on late lodgment for the years 1996, 1997 and 1998 is payable by the Applicant. 2. That the Commissioner calculate and advise the Applicant within 28 days of the correct amount of interest payable in the circumstances which will be no more than $1,285.30.