Charara v Commissioner of Taxation [2009] NSWSC 730

New South Wales Supreme Court

CITATION : Charara v Commissioner of Taxation [2009] NSWSC 730

HEARING DATE(S) : 30/07/09, 31/07/09

JUDGMENT DATE : 19 August 2009

JUDGMENT OF : Forster J at 1

DECISION : See paragraphs 51 and 52 of judgment.

CATCHWORDS : A New Tax System (Goods and Services Tax) Act - Commissioner refunds GST as claimed in BAS - subsequent audit by Commissioner results in disallowance of entitlement to refunds - disallowed amounts, penalties and general interest charges debited to taxpayer's Running Balance Account, but no amounts repaid by taxpayer - negotiations leading to Deed of Settlement - amended assessments issued - penalties and general interest charges remitted and the disallowed amounts adjusted - remittances and adjustments credited to Running Balance Account taking balance into credit - net credit balance paid to taxpayer - Held: taxpayer not entitled to any further interest.

A New Tax System (Goods and Services Tax) Act 1999 LEGISLATION CITED : Taxation Administration Act (1953) Taxation (Interest On Overpayments and Early Payments) Act 1983

CATEGORY : Principal judgment

PARTIES : Plaintiff: Jamal Charara Defendant: Commissioner of Taxation

FILE NUMBER(S) : SC 1039/09

COUNSEL : Plaintiff: Jamal Charara (In person) Defendant: S.A.Sirtes

SOLICITORS : Plaintiff: Jamal Charara (In person) Defendant: Bronwyn McNeil, Clayton Utz Lawyers

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

FORSTER J

WEDNESDAY, 19 AUGUST 2009

(1039/09) JAMAL CHARARA v COMMISSIONER OF TAXATION JUDGMENT 1 HIS HONOUR: The plaintiff is the assignee pursuant to an assignment made on 9 July 2007 ("the Assignment") under which Media Press Computer Supplies Pty Ltd ("MP") assigned to Mr Charara all of its rights and entitlements in respect of any debts or other claims that MP had against the defendant, the Commissioner for Taxation ("the Commissioner"). The validity and effectiveness of the Assignment is in dispute, as is Mr Charara's standing to make the various claims the subject of these proceedings. 2 By his Summons filed on 7 January 2009 Mr Charara seeks various declarations and orders for the payment to him (in his capacity as MP's assignee) of various amounts in respect of which he claims that MP has been underpaid, together with interest thereon. 3 The Commissioner disputes Mr Charara's entitlement to the amounts in question. 4 Mr Charara's claims can be conveniently divided as relating to two periods. The first period relates to claims made in respect of ten Business Activity Statements ("BAS") lodged by MP pursuant to the requirements of the A New Tax System (Goods and Services Tax) Act 1999 for the ten quarters from the quarter commencing on 1 July 2000 to the quarter commencing on 1 April 2002, both inclusive. As originally pleaded, the second period related to BAS's lodged by MP in respect of five other quarters, being the quarter commencing on 1 April 2003 and the four consecutive quarters from the quarter commencing on 1 April 2005 and ending with the quarter commencing on 1 January 2006, again both inclusive. However, Mr Charara has abandoned his claim in relation to the last-mentioned four consecutive quarters, thus limiting his claim for the second period to the BAS lodged by MP for the one quarter from 1 April 2003 to 30 June 2003. 5 I propose to deal with those two periods separately. The first period: 1 July 2000 to 31 December 2002 6 In respect of each of these ten quarters MP filed a BAS. In respect of eight of those quarters, MP claimed to be entitled to receive a refund. The Commissioner accepted those claims on a prima facie basis and credited the amounts claimed to MP's Running Balance Account ("RBA"). He then transferred those amounts by electronic funds transfers to MP's bank account. 7 The amounts refunded included, in respect of one of those eight BAS claims, a Delayed Refund Interest ("DRI") component which was payable pursuant to sections 12AA and 12AF of the Taxation (Interest On Overpayments and Early Payments) Act 1983 ("the IOP Act") which, so far as it is presently relevant, provide as follows: "12AA Entitlement to Interest for RBA Surpluses after Notification of BAS Amount