Reported Decision : 64 ATR 44 New South Wales Court of Appeal CITATION: CHIEF COMMISSIONER OF STATE REVENUE v HAYSON GROUP OF COMPANIES [2006] NSWCA 233 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 14 August 2006 JUDGMENT DATE: 23 August 2006 JUDGMENT OF: Hodgson JA at 1; Tobias JA at 6; Basten JA at 21 DECISION: (1) Appeal allowed; (2) (a) Set aside the order made by the Appeal Panel of the Administrative Decisions Tribunal on 31 October 2005 and; (b) in lieu thereof order that the decision of the Tribunal made on 1 July 2005, setting aside the determination of the Chief Commissioner of State Revenue to disallow the objection, be set aside; (3) Order the Respondent to pay the Appellant's costs of the appeal in this Court. CATCHWORDS: TAXES AND DUTIES – statutory interpretation – Parking Space Levy Act 1992 (NSW): ss 9, 13, 15 – whether levy was payable for a parking space which did not exist on 1 July of the year in which liability was said to arise Administrative Decisions Tribunal Act 1997 (NSW), ss 88, 120 LEGISLATION CITED: Interpretation Act 1987 (NSW), ss 33, 34 Parking Spaces Levy Act 1992 (NSW), ss 2, 3, 3A, 6, 6A, 7, 9, 11, 13, 15, 31, cl 1 of Schedule 1 Taxation Administration Act, ss 3, 4, 8, 9, 14, 86, 91, 96 Brayson Motors Pty Ltd (in liq) v Commissioner of Taxation (Cth) (1985) 156 CLR 651 Chief Commissioner of State Revenue v Hayson Group of Companies Pty Ltd [2005] NSWADT AP 51 Deputy Federal Commissioner of Taxation (SA) v Ellis & Clark Ltd (1934) 52 CLR 85 CASES CITED: Hayson Group of Companies Pty Ltd v Chief Commissioner of State Revenue [2005] NSWADT 146 Hunter Resources Ltd v Melville (1988) 164 CLR 234 Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) [2002] NSWCA 351 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 Ward v Commissioner of Police (1998) 80 FCR 427 PARTIES: Chief Commissioner of State Revenue - Appellant Hayson Group of Companies Pty Ltd - Respondent FILE NUMBER(S): CA 40909/05 COUNSEL: Mr J.E. Marshall SC/Mr I. Mescher - Appellant Mr S. Gageler SC/Mr M. Richmond - Respondent SOLICITORS: I. V. Knight, Crown Solicitor - Appellant Harris & Company - Respondent LOWER COURT JURISDICTION: Administrative Decisions Tribunal Appeal Panel LOWER COURT FILE NUMBER(S): ADT 059050 LOWER COURT JUDICIAL OFFICER: K.P. O'Connor DCJ, M. Hole (Judicial Member), C. Bennett (Non-Judicial Member) LOWER COURT DATE OF DECISION: 31 October 2005 LOWER COURT MEDIUM NEUTRAL CITATION: Chief Commissioner of State Revenue v Hayson Group of Comapnies Pty Ltd [2005] NSWADTAP 51 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40909/05 ADTAP 059050 HODGSON JA TOBIAS JA BASTEN JA 23 August 2006 CHIEF COMMISSIONER OF STATE REVENUE v HAYSON GROUP OF COMPANIES PTY LTD The Respondent, Hayson Groups Pty Ltd, was the owner of a premise in Pyrmont from 6 June 2003, which had a parking station. The parking station closed on 30 April 2004 and there were no parking spaces on the premises on 1 July 2004. The issue on appeal was whether a levy under the Parking Space Levy Act 1992 (NSW) was payable in respect of a parking space which did not exist on 1 July of the year in which liability was said to arise. The Appeal Panel of the Administration Decisions Tribunal held that no levy was payable as "the space" referred to in s 9(1) of the Parking Space Levy Act needed to exist at two times, namely on 1 July of the new financial year and at any time during the previous financial year. The Commissioner of State Revenue appealed against that decision. Held per Basten JA (Hodgson and Tobias JJA agreeing) 1. Except in cases where the Act itself provides that its operation may be varied by a regulation, the scope and operation of the statute cannot be determined by reference to regulations made under it: at [37]. Hunter Resources Ltd v Melville (1988) 164 CLR 234, applied; Deputy Federal Commissioner of Taxation (SA) v Ellis & Clark Ltd (1934) 52 CLR 85, distinguished 2. The operation of Schedule 1 of the Parking Space Levy Act resulted in the imposition of a retrospective tax in the first year of operation. There is no principle which prevents the imposition of a retrospective tax; the operation of the particular law must be determined in accordance with its own language: at [43]. Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) [2002] NSWCA 351, applied. 3. Reading the statute as a whole, its intention is to impose a levy, calculable according to the period for which a parking space existed in the previous financial year, on the owner of the premises on 1 July of the following financial year: at [47]. 4. A construction which avoids giving the Parking Space Levy Act a retrospective operation is unpersuasive because it relies upon transitional provisions operating in the first year only, to the exclusion of the general provision relation to adjustment of the levy with respect to the previous financial year contained in s 13. Secondly, to impose that approach on the assessment of liability in subsequent years will create anomalies. Thirdly, it denies the clear indications in clause 1 of the Schedule itself, and in ss 13 and 15, that the Act was intended to subject the owner of premises on 1 July in a particular year to lability for a levy based upon parking spaces existing in the previous year, whether or not they also existed in 1 July of the year the levy was imposed: at [47]. 5. As the Respondent owned the premises on 1 July 2004, it will be liable to pay a levy in respect of any parking space which existed during the previous financial year, calculated for the period of its existence pursuant to s 13: at [48]. Held per Hodgson JA: 1. To the extent that there may be ambiguity in s 9 of the Parking Space Levy, arguments based on reasonableness of the operation of the Act do not assist the respondent as anomalies exist for both parties' construction. Sections 13 and 15 make it clear that the appellant's construction is the preferable one: at [5]. Held per Tobias JA: 1. It being accepted that s 9(1) of the Parking Space Levy was ambiguous, s 34(2)(e) of the Interpretation Act 1987 permitted consideration to be given to the explanatory note relating to the bill which noted that the levy was designed to "to be met ultimately by the occupier or users of" the relevant parking spaces. This seems to recognise that the levy payable on 1 September 1992 would not have been collected from users of the parking spaces in the previous financial year: at [14]–[16]. 2. The reference in the explanatory note to s 9 makes it clear that it was intended that the levy was payable by 1 September in each financial year in respect of each non-exempt off street parking space which existed during the previous financial year. There was no suggestion that that parking space must also exist on 1 July of the year in which the levy is payable: at [17]–[18]. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40909/05 ADTAP 059050 HODGSON JA TOBIAS JA BASTEN JA 23 August 2006 CHIEF COMMISSIONER OF STATE REVENUE v HAYSON GROUP OF COMPANIES PTY LTD Judgment 1 HODGSON JA: I agree with the orders proposed by Basten JA and with his reasons. I would add the following comments. 2 There is force in the respondent's submission to the effect that, on the construction contended for by the appellant, the transitional provisions of the Parking Spaces Levy Act 1992 can operate harshly. Basten JA has set out Schedule 1 of the Act; and s.6A of the Act is as follows: 6A Special provisions when Act extended to new area (1) This section applies to premises that become premises to which this Act applies as a result of the area in which they are located being prescribed by the regulations as a Category 1 area or Category 2 area. (2) When premises first become premises to which this Act applies after the commencement of this section, section 9 applies in respect of those premises as if the reference in section 9 (1) to "the previous financial year" were a reference to "the financial year commencing on that 1 July". This subsection applies only for the purposes of the first levy payable under this Act in respect of those premises. (3) The following provisions apply in respect of the levy ( the first levy ) for a parking space on premises that becomes payable on 1 September immediately following the date on which the premises first become premises to which this Act applies: (a) section 13 does not apply to that first levy, (b) if the parking space does not, or will not, exist as a parking space to which this Act applies for a part or all of the current financial year (the year commencing on 1 July immediately preceding that 1 September), the owner by whom the levy is payable may apply to the Chief Commissioner for an appropriate levy credit, (c) the appropriate levy credit is that proportion of the levy that corresponds to the portion of that current financial year for which the space does not, or will not, so exist (but no credit is to be allowed if the proportion is less than one twelfth), (d) once satisfied that grounds for a credit have been established, the Chief Commissioner must set the amount of the credit off against the sum of levies payable by the same owner under this Act, or refund part or all of the credit if the sum has been paid, (e) however, if during that current financial year a parking space does exist as a parking space to which this Act applies for that part of the year in respect of which a credit was allowed under this section, the Chief Commissioner may demand that an appropriate amount of levy be paid in respect of that part of the year, and that amount is due and recoverable as a levy payable under this Act. 3 Taxpayers may be expected to make provision for payment of the levy by charging higher parking fees; and on the appellant's construction, they can do this by having appropriately charged for parking during the previous financial year, this being the year by reference to which the levy is calculated. However, in the first year of operation of the Act in a particular area, a taxpayer does not have a previous financial year in which it collected parking fees set at a level to cover the payment of the levy; and in fact the amount of the levy is calculated with reference to usage in the current financial year. So in effect, on the appellant's construction, the levy for the first two years has to be met out of higher parking fees charged during just one year. 4 However, it is to be noted that s.6A does not apply in a case where a new parking station is opened in an area to which the Act already applies. In such a case, no levy is payable during the first financial year it is open. The first levy is payable in the following financial year, calculated with reference to the usage in the first financial year. On the respondent's construction, if the parking station closed before the end of the first financial year, no levy would be payable at all; and if in some later year the parking station closed at any time other than early in a financial year, there would be a significant period of use by reference to which no levy was payable. In my opinion, this consideration counts in favour of the appellant's construction, at least as strongly as the anomaly in relation to the first year of operation of the Act in a particular area counts against it. 5 Accordingly, to the extent that there may be ambiguity in s.9, arguments based on reasonableness of operation of the Act do not assist the respondent; and in my opinion, the provisions of ss.13 and 15 make it clear that the appellant's construction is the preferable one. 6 TOBIAS JA: I have had the benefit of reading in draft the judgments of Basten JA and Hodgson JA. I agree with the orders proposed by Basten JA and with his Honour's reasons and with the further comments of Hodgson JA. However, as the issue to be determined in the appeal is of obvious public importance, I wish to add a few observations of my own. 7 First, it is to be noted that s9(2) of the Parking Space Levy Act 1992 (the Act) provided that the first levy payable under the Act became payable on 1 September 1992. Second, that fact was reflected in the opening words of cl 1(1) of Schedule 1, being the transitional provisions relating to the levy payable in the first year of operation of the Act. 8 Third, in respect of that first year, it was not practicable to literally apply the provisions of s9(1) as it would have required the payment of the levy to be related to each parking space in existence at any time during the financial year ending 30 June 1992. This information would not have been known given that the Second Reading Speech of the Bill occurred on 7 May 1992, the Act received the Royal Assent on 18 May 1992 and commenced on 1 July 1992: see s2. 9 Fourth, and further to the preceding point, it may not have been possible for owners or operators of parking spaces in the financial year ending 30 June 1992 to have kept records as to whether those spaces existed for the whole or only part of that financial year with the consequence that it would not be possible to apply s13 in respect of the levy payable on 1 September 1992. 10 Fifth, the late introduction of the Bill towards the end of the financial year ending 30 June 1992 would also have made it difficult, if not impossible, to determine which, if any, parking spaces in existence prior to the end of that financial year were exempt within the meaning of s7(2) of the Act. Hence cl 1(1) of Schedule 1 operated as a surrogate s13 in respect of the first year of operation of the Act. 11 Sixth, as Basten JA points out in [44] of his judgment, cl 1(1) contemplates that a parking space may not exist as such for the whole of the financial year commencing on 1 July 1992. Accordingly, the owner who is mandated to pay the levy on or before 1 September 1992 may apply to the Chief Commissioner for an appropriate levy credit with respect to that space. In the meantime that owner is still required to pay the levy with respect to that space on or before that date. It must therefore follow that cl 1(1) posits the situation that that space existed on or prior to 30 June 1992 but did not exist on 1 July 1992. 12 Seventh, as Hodgson JA observes in [3] of his judgment, although an owner of premises to which the Act applied in the first year of its operation would not have had the opportunity in the financial year ending 30 June 1992 to collect parking fees set at a level to cover the payment of what was then a non-existent levy, that disadvantage may well have been reflected by the legislature in the gradation of the amount of the levy payable on 1 September within each financial year from 1992 onwards as provided in s11 of the Act. Thus, by virtue of s11(1) the levy was only $200 per parking space for the first five years of the Act's operation. It then doubled for the next three years and thereafter doubled again. 13 Eighth, although the owner may have been disadvantaged by being unable to collect the levy on parking spaces which existed during the financial year ending 30 June 1992, in a situation such as the present, (where the parking station ceased operation on 30 April 2004) on the respondent's construction of s9(1) no levy was payable on 1 September 2004 notwithstanding that the parking fees set in respect of parking spaces which existed throughout the year ending 30 June 2004 would have been collected during that year and would have reflected the levy per space as the amount was known because of s11. On the respondent's interpretation, that part of the fee representing the levy on the relevant space would be retained by the owner and would thus constitute a windfall given that according to the respondent, no levy was payable on 1 September 2004. 14 Ninth, it being accepted that s9(1) was ambiguous, s34(1) of the Interpretation Act 1987 permitted consideration to be given to material not forming part of the Act which was capable of assisting in the ascertainment of the meaning of that provision and which, by virtue of s34(2)(e), included any explanatory note relating to the Bill for the Act furnished to the members of either House of Parliament by a Minister or other member of Parliament introducing the Bill before the relevant provision was enacted. 15 In this respect, the Explanatory Note relating to the Bill as introduced into Parliament noted that the levy was designed "to be met ultimately by the occupiers or users of" the relevant parking spaces (emphasis added). 16 As the Explanatory Note stated that the levy would first fall due in the financial year 1992/1993 and for that year would be fixed at $200 per parking space, it is clear that the levy payable for that year would "ultimately" be met by users of the spaces after 1 July 1992 or subsequently. In other words, the Explanatory Note seems to recognise that the levy payable on 1 September 1992 would not have been collected from users of the parking spaces in the previous financial year. 17 Tenth, and in my opinion critically, the Explanatory Note refers to cl 9 of the Bill in the following terms: " Clause 9 is the central provision imposing, in the first instance on owners, the obligation to pay by 1 September each financial year a levy for each off-street parking space which was not exempt during the previous financial year." 18 The respondent submitted that that was an inaccurate summary of cl 9. However, I cannot detect any basis for that submission given the ambiguity of the provision. The Explanatory Note makes it clear, in my opinion, that it was intended that the levy was payable by 1 September in each financial year in respect of each non-exempt off-street parking space which existed during the previous financial year. There was no suggestion that that parking space must also exist on 1 July of the year in which the levy is payable. 19 Finally, the Explanatory Note referred to cl 1 of Schedule 1 as providing for pro-rata credits of levies which applied in the first year of operation of the proposed Act if a parking space became exempt during 1992/1993. The Note continues in these terms: "this will mean that although that financial year's levy is expressed to be based on what was a parking space to which the proposed Act applied during the previous financial year, 1991-1992 will in fact be only an initial guide for the assessment of the levy payable by 1 September in 1992." 20 This explanation of cl 1 of Schedule 1 is, in my opinion, entirely consistent with the Notes explanation of cl 9, which, together with the other factors to which I have referred, serve to confirm that the appellant's construction of s9(1) should be accepted. It is for these additional reasons that I agree with the orders proposed by Basten JA. 21 BASTEN JA: This appeal turns on the proper construction of s 9(1) of the Parking Space Levy Act 1992 (NSW). That section provides: 9 Levy (1) The owner, as at 1 July in a financial year, of premises to which this Act applies must, unless exempt, pay a levy to the Chief Commission on or before 1 September in that financial year for each parking space on the premises if the space existed as a parking space to which this Act applies at any time during the previous financial year. 22 The Respondent became the owner of premises at 380 Harris Street, Pyrmont, on 6 June 2003. It was the owner of those premises on 1 July 2004. 23 The building had been, or had included, a parking station when purchased by the Respondent. However, the parking station had been closed during the 2003-2004 financial year, so that the last date on which parking spaces were available on the premises was 30 April 2004. There were, therefore, no parking spaces on the premises on 1 July 2004. The question is whether the Respondent was liable to pay a levy on 1 September 2004. 24 There was no suggestion that the Respondent was "exempt", for the purposes of s 9(1). The issue was whether the levy was payable in respect of a parking space if that parking space did not exist on 1 July of the year in which liability was said to arise. 25 The Respondent's argument, which had been successful before the Administrative Decisions Tribunal, was that "the space" referred to in s 9(1) needed to exist at two times, namely on 1 July of the new financial year and at any time during the previous financial year. There was no dispute as to the second element; the issue was whether the reference to a "parking space on the premises" imposed a requirement that the parking space be on the premises, as at 1 July. The Respondent argued that the reference to "each parking space on the premises" involved both a temporal and a locational element. The temporal element required that each parking space be identified as existing on 1 July. The second limb of the provision then asked if "the space", meaning that identified on 1 July, "existed" at a time in the previous financial year. Counsel conceded that, had the section referred to "each parking space on the premises [which] existed … at any time during the previous financial year", the meaning may have been different. 26 The Respondent says that, properly understood, the Act creates a liability in one financial year, calculated by reference to business undertaken in the previous year. In doing so, the Act follows a well-worn path: rather than being seen as imposing a tax on past activities, it should be understood as a tax on current activities, calculated according to the state of affairs which existed in the preceding financial year. To construe it otherwise would be to give it a retrospective operation, and such an interpretation should not be adopted in the absence of a clearly expressed intention to that effect. 27 It is clear that s 9 imposes a levy on a parking space which existed during the previous financial year, even though it did not exist for the whole of that financial year. Section 13 makes provision for spaces which existed for part of a year, in the following terms: 13 Parking spaces that exist for part of year The amount of levy payable on 1 September in a financial year after 1992 for each parking space to which this Act applies which existed for only part of the previous financial year is that proportion of the amount of levy determined in respect of the financial year which corresponds to the portion of the previous financial year for which the space existed as a parking space to which this Act applies. 28 A parking space may exist during part only of a financial year in three circumstances. The first arises where it existed prior to the previous financial year, but ceased to exist during that financial year. The second arises where the parking space was both created and ceased to exist during the previous financial year. The third arises where the parking space was created during the previous financial year and continued to exist on 1 July of the current financial year. On the Respondent's contention, a parking space which existed for the whole of the previous financial year, but ceased to exist on the last day, would not be subject to a levy in the current financial year, because it would not exist on 1 July of the current year. A parking space which was created and terminated within a financial year would never be the subject of a levy. A parking space which was created on 1 January and existed for the whole of a calendar year would be subject to a levy for the first six months of its existence, but not for the second six months. 29 On this approach, the only purpose of s 13 would be to provide a proportionate reduction in the amount of the levy in relation to a space created during one financial year, which continued into the next, there being no levy for a space which did not continue to exist, at least on 1 July of the following financial year. On the Appellant's approach, the space did not need to exist on 1 July of the following financial year and the levy would be payable in relation to all parking spaces, for the period during which they existed, whether they existed on 1 July of the following financial year or not. The Appellant says that the latter is the more rational approach: the question is whether it is the approach reflected in the statutory language. 30 The Appellant also placed reliance upon s 15 of the Act which provides as follows: 15 Returns The owner, as at 1 July in a financial year, of premises on which there is or was during the previous financial year a parking space to which this Act applies must, unless exempt, furnish a return to the Chief Commissioner on or before 1 September in that financial year. (The reference in the last line to "that financial year" must be a reference to the financial year referred to in the first line, and not the previous financial year.) 31 This provision, the Appellant contended, was inconsistent with a construction of s 9(1) which resulted in a levy being imposed only in respect of an owner of premises on which a parking space existed as at 1 July of the year in which the liability arose. If that construction were correct, there would be no purpose in requiring the owner of premises on which there "was" a parking space during the previous financial year to file a return, because, on the hypothesis, the owner was not liable for a levy. By way of answer, the Respondent accepted that there would be a "nil return" but that the provision was merely procedural and could not govern the scope of s 9(1). 32 The word "return" is not defined in the Parking Space Levy Act, but is no doubt intended, broadly speaking, to constitute a record of information relevant to the assessment of a liability to pay the levy imposed by the Act. It is at least curious that Parliament should require a person previously subject to the levy to file a return for a year in which it is not so subject. Furthermore, the Act is to be read together with the Taxation Administration Act 1996 (NSW): s 3A of the Parking Space Levy Act. The Taxation Administration Act does have a definition of "return", in s 3, which reads as follows: return means a return, statement, application, report or other record that: (a) is required or authorised under a taxation law to be lodged by a person with the Chief Commissioner or a specified person, and (b) is liable to tax or records matters in respect of which there is or may be a tax liability. (The phrase "taxation laws" is defined in s 4 to include the Parking Space Levy Act .) The definition of "return" is by no means determinative, but it gives some weight to the argument that a return is not required in respect of matters for which there is, in law, no tax liability. Accordingly, these procedural provisions give some limited support to the view that a tax liability could arise under s 9(1) of the Parking Space Levy Act , even though there were no parking spaces on the premises on 1 July of a particular year. 33 One possible means of resolving the question is to ask whether premises are "premises to which the Act applies", if on a particular day, they do not contain a parking space. However, pursuant to s 6, the Act applies "to premises within a Category 1 area", which includes the City of Sydney. Thus the Act applies to the premises in question, which are within the City of Sydney, whether or not there are parking spaces on the premises at a particular time. 34 The Act applies both to premises and to parking spaces. Thus s 7(1) provides that the Act applies "to a parking space on premises to which this Act applies, other than an exempt parking space". That section does not resolve the question as it, like s 9(1), is ambiguous as to whether the parking space to which it refers must exist at a particular time, and if so whether that time is the time at which the levy is payable. 35 The Respondent sought to derive some assistance in determining the scope, purpose and operation of the Act from the Parking Service Levy Regulation 1997 (NSW), made pursuant to s 31 of the Act. That course was legitimate, it was argued, because the purpose of the Act could be more precisely identified by reference to the scope of the exempt parking spaces, the categories of which were at least in part specified in accordance with the Regulation. 36 Support for that approach was sought in comments of Dixon J in Deputy Federal Commissioner of Taxation (SA) v Ellis & Clark Ltd (1934) 52 CLR 85 at 89. However, it is doubtful whether his Honour's comments provide support for such a proposition. The unusual context may be appreciated from the following passage: "Because of some apprehension as to the possible effect of sec. 55 of the Constitution on its validity, if the sales tax legislation were enacted in one assessment Act and one taxing Act, it was passed in the form of nine separate machinery statutes and nine separate taxing Acts. They constitute, however, a single legislative scheme to the complete operation of which all are necessary, and they should be construed together. Moreover, the legislation depends in a remarkable degree upon the regulations made under the power which it confers on the Executive. Without the regulations, not only is it unworkable, but the expression of legislative policy is so inadequate as almost to be unintelligible." 37 It is trite law that, except in cases where the Act itself provides that its operation may be varied by regulation, the scope and operation of the statute cannot be determined by reference to regulations made under it: see Hunter Resources Ltd v Melville (1988) 164 CLR 234 at 244 (Mason CJ and Gaudron J), where their Honours stated in emphatic terms: "Of course it is not permissible to interpret the statute by reference to the regulations". I would treat with caution any attempt to derive a different principle from a remark made by Mason J in argument in Brayson Motors Pty Ltd (In liq) v Commissioner of Taxation (Cth) (1985) 156 CLR 651 at 652. In any event, the context was precisely that dealt with by Dixon J in Ellis & Clark Ltd ; cf Moore J in Ward v Commissioner of Police (1998) 80 FCR 427 at 437E. 38 The legislative circumstances identified by Dixon J in Ellis & Clark do not provide fertile ground from which to derive a significant exception to the general principle of statutory construction which denies reliance upon subordinate legislation as a basis for construing the Act. Although, it was suggested that a different principle might apply in relation to determining the purpose of the statute and thus, indirectly, its construction, there is no principled basis for drawing such a distinction, especially given the importance of the legislative purpose in construing the statutory language: see Interpretation Act 1987 (NSW), s 33. Furthermore, a question might arise as to how reliance was to be placed on the instrument to which the Court was taken, which post-dated the Act by five years; at best reference should have been made to the similar contemporaneous Parking Space Levy Regulation 1992. 39 The objects of the Parking Space Levy Act are expressly stated in s 3 as being to "discourage car use in business districts" and to finance the development of infrastructure to "encourage the use of public transport". A levy on parking spaces might well be a blunt instrument for achieving those purposes if there were no exceptions. Significant exceptions are contained in s 7 of the Act, which may be supplemented by the Regulations: s 7(3). Neither the scope of the Regulations, nor their manner of operation, gives significant assistance in determining the purpose of the Act. 40 The Respondent also sought to gain support for its approach from the transitional provisions under Schedule 1 and s 6A, dealing with circumstances where the Act applied to premises for the first time. These provisions suggested, so the Respondent argued, that the levy was calculable, not on the period for which the parking space existed during the previous financial year, but for the period during which it existed in the current financial year. The general transitional provision, clause 1 of Schedule 1, provides as follows: 1 Credit on levy payable in first year of operation of Act (1) If a parking space in respect of which a levy is payable on or before 1 September 1992 does not, or will not, exist as a parking space to which this Act applies for a part or all of the financial year commencing on 1 July 1992, the owner by whom the levy is payable may apply to the Chief Commissioner for an appropriate levy credit. (2) The appropriate levy credit is that proportion of the levy which corresponds to the portion of the financial year for which the space does not, or will not, so exist. However, no credit is to be allowed if the proportion is less than one twelfth. (3) Once satisfied that grounds for a credit have been established, the Chief Commissioner must set the amount of the credit off against the sum of levies payable by the same owner under this Act, or refund part or all of the credit if the sum has been paid. (4) However, if during the financial year commencing on 1 July 1992 a parking space does exist as a parking space to which this Act applies for that part of the year in respect of which a credit was allowed under this clause, the Commissioner may demand that an appropriate amount of levy be paid in respect of that part of the year. (5) Such amount is due and recoverable in accordance with section 10. 41 This provision is in some respects puzzling. Absent such a provision, it might have been difficult to argue that any levy was payable on 1 September 1992, because a parking space which existed during the previous financial year would not have been one to which the Act applied, prior to its commencement. Clause 1 does not in terms say that such a space is subject to the levy, but that appears to be intended. However, if the effect of the transitional provision is to make the levy payable in respect of such spaces, one might have expected it to be assessed for the portion of the previous financial year for which the parking space existed. Clause 1 assumes that a parking space which existed in the previous year may be one in respect of which a levy is payable on 1 September 1992, but allows a proportionate "credit", based not on the period of time for which the parking space did not exist in the previous financial year, but on the period for which it does not or will not exist during the financial year which commenced on 1 July 1992. 42 Clause 1 could be thought to act capriciously or arbitrarily in relation to a parking station which only opened on (say) 1 June 1992. So long as there was no variation in the number of parking spaces during the 1992-1993 financial year, no "credit" would be allowed under this provision for the fact that each parking space was available for only one month of the previous financial year. This, it was argued, gave support for the proposition that the tax was in fact being imposed for the year in which it was payable and, consistently with that approach, if the parking station closed down completely, or halved the number of parking spaces available, within the first year of operation, a proportionate credit would be allowed under Schedule 1, clause 1. Further, to avoid double taxation in the following year and each subsequent year, each subsequent assessment must also be treated as payable in respect of the existence of the parking space in the year of payment. Unfortunately, that gives rise to a further element of caprice, namely that a parking station that closed down on 2 July in any particular year would be liable to pay the levy for the full year even though no parking spaces existed after that date, because after the first year, the "credit" provided by clause 1 is inapplicable and the allowance under s 13, based on existence for a portion only of the previous year applies. 43 Despite the unwillingness of the Appellant to concede that his interpretation resulted in the imposition of a retrospective tax in the first year of operation, that was clearly its effect. However, there is no principle which prevents the imposition of a retrospective tax; the operation of the particular law must be determined in accordance with its own language: see, eg, Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) [2002] NSWCA 351; (2002) 51 ATR 320; [2002] ATC 5,015 at [146]-[148] (Spigelman CJ, Stein and Heydon JJA agreeing). If the result is to impose a tax on activities which took place or a state of affairs which existed before the legislation commenced, the courts must give effect to that intention. 44 Schedule 1, clause 1 is in fact consistent with the construction proposed by the Appellant. Thus, clause 1 posits as one basis for its operation that the parking space did not exist for "all of the financial year commencing on 1 July 1992": that must mean that it did not exist on 1 July 1992. Accordingly, where a parking space existed for part of the previous year, but had ceased to exist before the end of it (or on the last day), a "credit" will be available under clause 1. In that case no levy will be payable, not because the parking space needed to exist on 1 July 1992, but because the full year's credit will reduce the levy to zero. 45 On one view, the anomalous situation referred to at [42] above arises because s 13 did not apply in relation to the first financial year of the operation of the Act, but only on and from 1 September 1993. Whatever the reason for adopting that approach, it was apparently not inadvertent; when, in 2000, the Parliament came to make similar provision in relation to new areas to which the Act applied, it expressly withdrew the operation of s 13 in relation to the first levy and enacted a "credit" provision similar to Schedule 1, clause 1: see s 6A. 46 This case does not involve the transitional provisions and, accordingly, there is no need to determine the correct interpretation of clause 1 of Schedule 1, or of s 6A. The apparent anomalies referred to above limit their value in seeking to construe s 9(1). However, each is at least consistent with the view that a levy may be payable in respect of a particular year, even though the particular parking space did not exist in the year liability arose. 47 Seeking to read the statute as a whole, it would seem that its intention is to impose a levy, calculable according to the period for which a parking space existed in the previous financial year, on the owner of the premises on 1 July of the following financial year. There is no obvious reason why the continued existence of the parking space on the first day of the following financial year should be a precondition for liability in respect of the levy. The reason relied upon by the Respondent is that such a construction will avoid giving the Act a retrospective operation. However that approach is unpersuasive for three reasons. First, it relies upon transitional provisions operating in the first year only, to the exclusion of the general provision relating to adjustment of the levy with respect to the previous financial year, contained in s 13. Secondly, to impose that approach on the assessment of liability in subsequent years will create the anomalies noted at [28] above. Thirdly, it denies the clear indications in clause 1 itself, and in ss 13 and 15, that the Act was intended to subject the owner of premises on 1 July in a particular year to liability for a levy based upon parking spaces existing in the previous year, whether or not they also existed on 1 July of the year the levy was imposed. The construction proposed by the Appellant should be accepted. 48 In the present case, the result is that the premises must be owned by the Respondent on 1 July 2004. As that condition is satisfied, the Respondent will be liable to pay a levy in respect of any parking space which existed during the previous financial year, calculated for the period of its existence, pursuant to s 13. Appropriate orders 49 For these reasons, the Appeal Panel of the Administrative Decisions Tribunal was in error in its construction of s 9(1) of the Parking Space Levy Act and in its consequent order dismissing the appeal to it: see Chief Commissioner of State Revenue v Hayson Group of Companies Pty Ltd [2005] NSWADT AP 51 at [28]. It was therefore in error in dismissing the appeal on that ground, which appears to have been the only issue in dispute before it: [2005] NSWADT AP 51 at [5]. The order of the Appeal Panel must be set aside; the question is what other consequential orders should be made. 50 In about September 2004, the Appellant made an assessment of the tax liability of the Respondent, for the purposes of the Parking Space Levy Act, pursuant to s 8(1) of the Taxation Administration Act. On 16 September 2004 a notice of assessment was issued pursuant to s 14(1) of that Act. The power of the taxpayer to object is conferred by s 86 of the Taxation Administration Act. On 9 November 2004, the solicitors for the Respondent objected to the assessment on the sole basis that, if no parking spaces existed on the premises on 1 July 2004, no liability arose to pay the levy. That ground was identified in the determination to disallow the objection, dated 10 December 2004, pursuant to s 91(1) of the Taxation Administration Act. That Act in turn provided for a review by the Administrative Decisions Tribunal, where "the taxpayer is dissatisfied with the Chief Commissioner's determination of the taxpayer's objection": s 96. 51 In the application to the Administrative Decisions Tribunal, the Respondent identified three reasons for the application for review, two of which encompassed the construction of s 9(1), but the third of which alleged that the calculation of the levy was incorrect. 52 In the reasons of the Tribunal at first instance, only the construction argument is identified as the issue in dispute: Hayson Group of Companies Pty Ltd v Chief Commissioner of State Revenue [2005] NSWADT 146 at [5]. The determination of that issue in a manner favourable to the present Respondent led Judge Block to set aside the decision under review. 53 Despite the foregoing history, the parties were in agreement in this Court that the liability of the Respondent required reassessment. During the course of the appeal to this Court, the position of the Chief Commissioner varied with respect to the appropriate orders, should he succeed. At one stage he suggested that it might be appropriate for this Court to make final orders in relation to the amount and liability of the levy, pursuant to powers conferred by s 120 of the Administrative Decisions Tribunal Act 1997 (NSW). However, the appeal to this Court is limited to a question of law. There is no material before this Court to do more than correct the error of law. In effect, the Chief Commissioner acknowledged that by his assertion that he himself could not make a proper assessment, without further information, to be provided by the Respondent. It is not necessary, therefore, to consider the proper limits of the powers of this Court when dealing with an appeal limited to a question of law: see Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at [38], the majority not determining the issue and at [69] (Kirby P). 54 It seems possible that the issue of principle having been determined, the parties may reach agreement as to the calculation. In any event, there was no suggestion that either the Tribunal at first instance, or the Appeal Panel, had any relevant material before it to make such a determination. Accordingly, there appears to be no point in remitting the matter to the Tribunal. The Chief Commissioner has power under s 9 of the Taxation Administration Act to make a reassessment of the tax liability of a taxpayer and it appears to be common ground that the power exists in the present case, even if the decision of the Chief Commissioner to reject the objection is upheld. 55 The final question in relation to the appropriate orders to be made concerns costs. The power of the Tribunal with respect to costs is dealt with in s 88 of the Administrative Decisions Tribunal Act. Pursuant to s 88(1), it must be satisfied that there are "special circumstances" warranting an award of costs. It does not appear that costs were awarded either at first instance or by the Appeal Panel in the present case. Nor is it suggested that any order should have been made, or should now be made with respect to costs before the Tribunal if the appeal to this Court succeeds. Costs in this Court should follow the event. 56 The appropriate orders are as follows: (1) Appeal allowed. (2) (a) Set aside the order made by the Appeal Panel of the Administrative Decisions Tribunal on 31 October 2005 and (b) in lieu thereof order that the decision of the Tribunal made on 1 July 2005, setting aside the determination of the Chief Commissioner of State Revenue to disallow the objection, be set aside. (3) Order the Respondent to pay the Appellant's costs of the appeal in this Court. ********** 24/08/2006 - Correcting name of Appellant and court below matter number - Paragraph(s) Coversheet and front page of judgment DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.