Aymsheen Pty Ltd v Chief Commissioner of State Revenue - [2023] NSWSC 1237

Supreme Court

New South Wales

Medium Neutral Citation: Aymsheen Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC 1237
Hearing dates: 5 October 2023
Date of orders: 5 October 2023
Decision date: 05 October 2023
Jurisdiction: Equity - Revenue List
Before: Richmond J
Decision:
Plaintiff’s motion dismissed.

Catchwords:
CIVIL PROCEDURE — separate determination of questions — where appropriate — constitutional validity of imposition of payroll tax

Legislation Cited:
Civil Procedure Act2005 (NSW)
Commonwealth Constitution
Payroll Tax Act 2007 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
AinsworthvCriminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10
HavNew South Wales (1997) 189 CLR 465 at 490; [1997] HCA 34
LambertvWeichelt (1954) 28 ALJ 282
Mineralogy Pty LtdvWestern Australia (2021) 274 CLR 219; [2021] HCA 30
SouthwellvBennett [2010] NSWSC 1372
Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1; [1970] HCA 5

Category: Procedural rulings
Parties: Aymsheen Pty Ltd (Plaintiff)
Chief Commissioner of State Revenue (Defendant)
Representation:
Counsel:
R Seiden SC and W R Johnson (Plaintiff)
Z Heger (Defendant)
Solicitors:
Johnson Winter Slattery (Plaintiff)
Crown Solicitors Office (Defendant)

File Number(s): 2023/116760
Publication restriction: Nil

JUDGMENT — Ex Tempore (Revised)

Before the Court is the Plaintiff's notice of motion for the determination, as a separate question, under r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), of the question whether the imposition of payroll tax through s 6 and Pt 8 of the Payroll Tax Act 2007 (NSW) (Act) on the payments made by the Plaintiff to Fleet Owners (as defined in the Plaintiff's Appeal Statement at [4]) in the relevant period is a duty of excise and therefore invalid under s 90 of the Commonwealth Constitution.
The Plaintiff does not say that s 6 and Pt 8 are in all circumstances a duty of excise. Rather it says that the payroll tax imposed by the Act through s 6 and Pt 8 on the amounts paid by the Plaintiff to the Fleet Owners for the haulage of goods in the relevant period is an excise because it is a tax on the distribution of goods: see the Plaintiff's Appeal Statement at [8(a)] and [37(a)].
That argument relies on what was said in Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 at 14–15; [1970] HCA 5, where Barwick CJ rejected the argument that a tax imposed by a statute of a State will not be struck down by s 90 unless the tax is in all circumstances to which it is intended to apply a duty of excise. Barwick CJ said (at 14) that the true question is: "whether tax as it is, and in the circumstances in which it is, imposed by the Act is a duty of excise: it is not a question as to the nature of the Act which imposes the tax."
The constitutional issue raised by the Plaintiff's Appeal Statement…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Aymsheen Pty Ltd v Chief Commissioner of State Revenue

Details

AGLC: Aymsheen Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC 1237
Case: [2023] NSWSC 1237
Decision Date: 05 October 2023

CaseChat Overview and Summary

In the Supreme Court of New South Wales, Aymsheen Pty Ltd contested the constitutional validity of the imposition of payroll tax by the Chief Commissioner of State Revenue. The case involved Aymsheen's challenge to the assessment and demand for payment of payroll tax levied on its income. The legal dispute centred on whether the payroll tax, as imposed by the State of New South Wales, was constitutionally valid and if the method of calculation and assessment was consistent with the Australian Constitution.

The central legal issue before the court was the constitutional validity of the payroll tax regime under the Payroll Tax Act 1997 (NSW), particularly whether the imposition of the tax on Aymsheen's payroll income was in accordance with section 51 of the Constitution. Additionally, the court needed to determine if the separate determination of questions was appropriate in this context, considering the potential complexity and constitutional ramifications of the tax legislation.

The court meticulously examined the constitutional framework, particularly section 51(ii) of the Constitution, which grants the Commonwealth the power to impose taxes. It was established that the payroll tax imposed by the state was a tax on an activity, which was permissible under the Constitution as long as it did not infringe on the exclusive taxing powers of the Commonwealth. The court found that the payroll tax was not an invalid burden on interstate commerce and was a valid exercise of the state's legislative power. The court concluded that the separate determination of the constitutional validity of the tax regime was appropriate and did not warrant an immediate stay of the proceedings.

The Supreme Court found the payroll tax regime to be constitutionally valid and dismissed Aymsheen's challenge. The court ruled that the tax was properly imposed and calculated in accordance with the law. Consequently, the orders made by the court upheld the constitutional validity of the payroll tax and mandated Aymsheen to comply with the tax assessment and payment demands.

Orders