ACN 078 272 867 (In Liquidation) (Formerly Advance Finances Pty Limited) & Anor v Commissioner of Taxation & Anor; Binetter v Commissioner of Taxation & Anor

The applicants, ACN 078 272 867 (In Liquidation) (formerly Advance Finances Pty Limited) and Mr Binetter, appealed to the High Court of Australia against decisions of the Federal Court of Australia concerning their liability for certain taxes. The Commissioner of Taxation (the respondent) had issued assessments for income tax and goods and services tax (GST) against the applicants. The core of the dispute revolved around whether the applicants were entitled to claim certain deductions and credits, and whether the Commissioner's assessments were valid.

The High Court was required to determine several key legal issues. These included whether the applicants had discharged the onus of proof required to establish their entitlement to the claimed deductions and GST credits, particularly in circumstances where the underlying transactions were alleged to be part of a tax avoidance scheme. Furthermore, the Court had to consider the validity of the Commissioner's amended assessments and the application of relevant provisions of the *Income Tax Assessment Act 1936* (Cth) and the *A New Tax System (Goods and Services Tax) Act 1999* (Cth).

In his judgment, Heydon J applied established principles regarding the onus of proof in taxation matters, which rests with the taxpayer to demonstrate the validity of their claims. His Honour examined the evidence presented by the applicants and found it insufficient to substantiate the claimed deductions and GST credits, particularly in light of the Commissioner's evidence and arguments concerning the artificial nature of the transactions. The Court affirmed that taxpayers must demonstrate a genuine entitlement to deductions and credits, and that the Commissioner is entitled to issue amended assessments where original assessments are found to be incorrect. The appeals were dismissed.