Anderson and Commissioner of Taxation

[2008] AATA 478

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 478

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/5540-42

TAXATION APPEALS DIVISION		)
Re		LESLIE ANDERSON

Applicant

And COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Mr A Sweidan, Senior Member

Date10 June 2008

PlacePerth

Decision The Tribunal dismisses the applicant’s application pursuant to s 42A (4) of the Administrative Appeals Tribunal Act 1975.

..........[sgd Mr A Sweidan]........

Senior Member

CATCHWORDS

Income Tax – whether respondent’s decision reviewable by Tribunal – administrative overpayment – no jurisdiction to review

LEGISLATION  

Taxation Administration Act 1953 – s.340-10;

Administrative appeals Tribunal Act 1975 s. 42A (4)

DECISION AND REASONS FOR DECISION

10 June 2008 Mr A Sweidan, Senior Member    

REASONS FOR DECISION (JURISDICTIONAL HEARING)

1. Respondent, by way of facsimile dated 20 February 2008, has made an application pursuant to s 42A (4) of the administrative Appeals Tribunal Act 1975 (“AAT Act 1975”) that these proceedings be dismissed for lack of jurisdiction.

2. The relevant provision of the AAT Act 1975 is s 42A (4) which provides:

“If:

(a) a person makes an application to the Tribunal for a review of a decision; and

(b)the person is unable to show, within such time as prescribed after being notified in writing by the Registrar or a Deputy Registrar that the decision does not appear to be reviewable by the Tribunal, that the decision is so reviewable;

The Tribunal may dismiss the application without proceeding to review the decision.”

3.      Respondent contends that the decision, the subject of the applicant’s application for review, is not reviewable by this Tribunal, and therefore the application should be dismissed without proceeding to review the decision.

BACKGROUND AS TO THE APPLICANT’S APPLICATION FOR RELEASE FROM TAXATION LIABILITIES

4. On 18 December 2006, the applicant submitted an application to the respondent to be released from particular taxation liabilities pursuant to section 340-5 of Schedule 1 of the Taxation Administration Act 1953 (“the TAA 1953”).

5.      In particular, the applicant sought release from the total amount of debt owing to the Commissioner, being $53,236.42.  The debt was comprised of income tax in the amount of $33,736.42 and an administrative overpayment said to be in the amount of $19,500.00.

6.      On 18 May 2007 the respondent granted release from the income tax portion of the liability in the amount of $33,736.42.  The applicant was advised of this outcome by way of letter on the same date.  The applicant was further advised that part of the debt remained owing in the amount of $19,500.00.

7.      It is the respondent’s position that a full release was granted in relation to those liabilities eligible for release and that the outstanding liability in respect of administrative overpayment does not fall within the relevant legislative provisions.

8.      The Commissioner concedes that his letter to the applicant dated 18 May 2007 was misleading.  Not only does it incorrectly refer to the amount of the outstanding debt being $19,500.00 (the correct amount is $19,163.00) but the letter limits the reasons for the decision to the issue of hardship.  The letter did not advise the applicant that the outstanding tax liability was ineligible for release.

9.      On 30 June 2007, the applicant objected to the respondent’s decision not to grant a release for the administrative overpayment portion of the tax debt.  The grounds relied upon in the applicant’s letter were based on hardship.

10.     On 10 October 2007, the respondent refused the applicant’s objection.  The applicant was advised of the decision by letter of the same date.  The applicant was advised that the administrative overpayment portion of the debt was ineligible for release.

11.     The Tribunal notes that at page 2 of the “Reasons for Decision” in the letter of 10 October 2007 there is an incorrect reference to a portion of the debt in the amount of $337 being eligible for release.  This was apparently an error based on the applicant still owing $19,500.00.  As noted above, the applicant only owed an amount of $19,163.00.  The Tribunal notes that the applicant has in fact been released from all of the eligible debt, for the reasons set out below.

12.     On 16 November 2007 the applicant lodged an application for review of the decision with the Tribunal.  The application in effect seeks release from the $19,163.00 debt which, as set out below, arises from an administrative overpayment.

WHY THE DECISION NOT TO GRANT RELEASE IS NOT CAPABLE OF BEING REVIEWED

13.     The Tribunal finds that the applicant has failed to show that the decision before the Tribunal is a decision capable of being reviewed and the applicant’s application for review should therefore be dismissed.

14.     The Tribunal may only exercise all the powers and discretion conferred by the relevant enactment on the person who made the decision.  It is the Tribunal’s view that the applicant is seeking release from a debt which cannot be the subject of release.  He is essentially asking the Tribunal to act outside the powers and discretion conferred on the original decision maker.

15. Division 340 of Schedule 1 of the TAA 1953 allows the Commissioner to grant an individual or the trustee of the estate of a deceased person, release from certain tax liabilities in whole or in part, if satisfying those liabilities would cause serious hardship.

16. Section 340-5 (1) provides that release, in whole or in part, can only be granted if section 340-10 applies to the liability.

17.     Section 340-10 sets out the types of liabilities in respect of which release can be granted.  The liabilities are:

(a)Income tax

(b)Fringe benefits tax;

(c)An instalment of fringe benefits tax;

(d)Medicare levy;

(e)Medicare levy surcharge;

(f)A PAYG instalment.

18.     The Tribunal is of the opinion that the types of specified liabilities for which release can be granted are explicit and exhaustive.  If the liability from which the tax payer is seeking release is not contained within section 340-10, then, in the Tribunal’s view, it is not possible for release from the liability to be granted.

19.     The power for the Commissioner to grant release from taxation liabilities is derived from the relevant parts of the legislation mentioned above.  The Commissioner, can therefore only grant release from the liabilities referred to in section 340-10.  It is clear that the Commissioner does not have an unfettered discretion to grant release from any type of taxation liability.

20.     In the Tribunal’s view it is clear that the taxation liability from which the applicant is seeking release arises from an administrative overpayment as set out below.  It is clearly not one of the taxation liabilities specifically provided for within the legislative framework.  The release provisions do not apply to amounts that have been incorrectly refunded or overpaid to a tax payer.

21.     On 9 August 1999 a notice of assessment for the financial year ended 30 June 1999 was issued to the applicant.  The assessment took into account tax credits of $19,163.98 and the result of the assessment was a credit amount of $19,166.98 which was refunded to the applicant by the Commissioner.

22.     Subsequently, a series of notices of amended assessments for the financial year ended 30 June 1999 were issued to the applicant.  However these subsequent notices of amended assessments, due to an accounting oversight, took into account tax credits of $19,163.98 but did not take into account the refund to the applicant.

23.     As a result, an administrative overpayment in the sum of $19,163.00 occurred because the applicant received not only the benefit of the tax credits but also the amount refunded.  On 23 November 2004 the respondent became aware of the accounting oversight and the applicant’s income tax account was debited in the amount of $19,163.00.

24.     The Tribunal accepts the respondent’s contentions that the debt, the subject of the review, is ineligible for release and it follows that the decision is not able to be reviewed.  The applicant has not shown any basis on which the decision is reviewable.  The Tribunal accordingly finds that the current application should be dismissed for lack of jurisdiction.

25.     The Tribunal notes that the applicant is able to seek to have the ineligible liability waived by applying to the Department of Finance and Deregulation.

DECISION

26. The Tribunal dismisses the applicant’s application under s 42A (4) of the Administrative Appeals Tribunal Act 1975.

I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member

Signed: ........[sgd Tracey Freeman]........
  Associate

Date of Hearing  30 April 2008
Date of Decision  10 June 2008
Applicant’s Representative      Self Represented

Respondent’s Representative  Mr A Johnson

Australian Taxation Office