ACN 154 520 199 Pty Ltd and Commissioner of Taxation (Taxation)

This matter concerned an application by ACN 154 520 199 Pty Ltd (the Applicant) against a decision of the Commissioner of Taxation (the Respondent). The Applicant sought the production of certain internal legal advice held by the Respondent, relating to the application of specific provisions of the *A New Tax System (Goods and Services Tax) Act 1999* and the general power to remit penalties. The application was heard by Mrs J C Kelly, Senior Member, of the Administrative Appeals Tribunal.

The primary legal issue before the Tribunal was whether it had the power to compel the Respondent to produce internal legal advice, notwithstanding the claim of legal professional privilege. This involved considering the scope of the Tribunal's powers under section 37(2) of the *Administrative Appeals Tribunal Act 1975* (AAT Act), as modified by section 14ZZF of the *Taxation Administration Act 1963* (TAA), and how these provisions interacted with the doctrine of legal professional privilege. The Tribunal also had to determine the threshold for relevance required to justify the production of documents under these provisions.

The Tribunal reasoned that while section 37(2) of the AAT Act grants it a broad power to require the production of documents that "may be relevant" to a review, this power does not abrogate legal professional privilege. Citing established authority, the Tribunal held that documents subject to legal professional privilege would not be ordered for disclosure. The Tribunal adopted a stringent approach to relevance, requiring a "sufficient relationship" between the documents and the matters to be determined, and a capacity to "influence the determination of the proceedings," rather than a mere speculative possibility of relevance. The Tribunal also noted that section 14ZZF of the TAA narrowed the Commissioner's obligation to produce documents, requiring them to be considered "necessary to the review."

The Tribunal concluded that it would not order the production of the internal legal advice as it was subject to legal professional privilege. The Tribunal indicated that the Applicant could make a fresh application concerning other aspects of the review, particularly those related to Division 165 of the GST Act, which had not been adequately addressed during the hearing.