Balnaves, P.J. v Deputy Commissioner of Taxation

[1985] FCA 317

.

C.ATCHWOF..I?~

ADMINISTRATIVE LAW - 1 u d l c ~ a . l revlew - decrsron of Deputy

Cammissloner of Taxat lon - declslon not t o rernstate z i r rangements

w l t h tax agent for lcdgment of income tax r e t u r n s or ialiure t o

gr3nt such re lns ta tement - oblectlon tn competency - whether

declsion made under zin enactm8s:lt.

PETER JOHN EALNAVES, v.

DEPUTY COMMI.BS-IJNER OF TAXAZ-IQI

-,

No. G14 of 1985

Respondent

ADELAIDE	FORSTD., LT.
11 MAY 1985

THE COURT ORDERS THAT:

1. The appllcatlon be dismlssed.

2. The applicant pay to the respondent Its costs of the

appllcat-- 7 nn.

3 . The in]unction granted on the 35th day of March 1955 be

discharged 9s from this day.

N o t e : Settlement and entry of orders 1 s dealt with in Order 36 of

the Federal Court Rules.

IN-THE FEDERAL COURT OF AUSTEALIA 1

No. G14 of 1985

GENERAL DIVISION \

'IEASONS .FPg. JIJDGMEI\IT

CQ-FF: Forster J.

The applicant, a chartered accountant, registered a5 a

tax auent for some twelve years, seeks a revlew pursuant to the

Admlnistratlve Declslons !-;l-ud-l.c-lal Revlew! -....Ac.t of a decislon of the Deputy Commlssioner of Taxatlon communlcated to the appllcant by letter dated 7 February 1985 that no reinstatement of

arrangements to lodge income tax returns beyond 31 December 1984

would be ,?ranted to hlm, cr. in the alternative, the fallure of the resporxient to -?rant the said relnstatement. The revlew 1s

souGht on the qrounds set out In s.5(l)(a), 5(l)(e), 5(l)(f),

5(l)(h), 5l2)(a), 5(2)(b), 5(2)(c), 5(2)(d), 5(2)(f), 5(2)(g) and

5(2)(]) of the Admlnlstratlve Decisions (Judicial Review) Act.

I..

An oblection to the ccmpetency of the appllcation was

lodged by the respondent on ?ne grounds -

"1. The declzlons referred to In the applization were

not declslons to whlch the Act applled wlthin the

meanlng of the Act.

2. The declslons referred to In the appllcatlon were

not made under	an enactment	xlthm the meanlng of
the Act".

I heitrd first the ob]ectlon to competency and dismlssed

the appllcatlon as belng incompetent because the derlslons

complained GC were not made under ar. enactment, that 1 s to say,

the -me Tax Assessment Act 1936-1984. I sald that I would

give wrltten reasons later which I now do.

In order that the matter may be understood it is

necessary to describe the arrangements made by the Commlssioner

of Taxation with tax agents.

Section 161 of the Income Tax Assessment Act requlres

every person, lf requlred by the Commissioner, by notlce

publlrhed in the Gazette, to furnish wlthin the time speclfled in

the notice an 1ncOme tax return. It 1 s common ground that the

time speclfied in the notlce with respect to the flnanclal year

1983-1584 1s 31 Auuust l584 and ha5 been the same in each year

for quite a conslderable time. In order to spread the burden of preparlng income tax returns over a period longer than the two

3 .

months from 30 June to 31 August and also to ease the

admlnlstrative burden In the Taxatlon irfflce, the Commissioner

each year enters into arrangements with tax agents for the

lodging of returns, whlch arrangements have the effect of

spreading the preparatlon of Income tax return5 and also ci the

consequent assessments of tax, over a longer perlod.

In June each year the Commrssloner issues a circular to

tax agents settlnq out the arrangements for the lodgment of

:ncome tax returns. In the circular Issued 13 June 1994, a copy

of whlch was tendered, ~t is said that lodgment of returns wlll

be permitted undzr one of two alternative programmes - the

Standard Lodgment Trcgramme or the Alternatlve Lodgment

Programme. It is common ground that the Standard Lodgment

Programme was applicable to the appllcant.

The Standard Lodgment Programme requlres that fifty per cent of the returns to be lodged by an agent must be lodged by 31

October 1984, slxty per cent by 30 November 1994 and 70 per cent by 31 December 1994, 80 per cent by 31 January 1985, 90 per cent by 29 February 1935 and 100 per cent by 31 March 1485. The

agent 1 s required by the circular to notify the Cornmissloner of

addltlons to and deletlens from the llst of cllents whose income

tax returns he wlll be lodglng In order that the agent's lodgment

performance In terms of percentages may be assessed. The Commlssioner regards 31 December as a key date for the programme.

The clrcular contalns the followlng paragraph In bold type -

4

" ( 3 ) The key date for both programmes is 31

December and the contrnuation of arrangements beyond 31 Decemher will depend on programme reyulrements being net at that date."

Another passage In bold type 1s -

"Where the 31 December programme requirements are

not met contlnuatlon of arrangemencs wlll only be

consldered where the clrcumstances could not have

been antlclpated by the agent and are not

clrcumstances whlch may reasonably be regar2ed a;

occurring In the normal course of business."

A t some tlme after 12 January 1985 the Commls=ioner

wrote to he applicant notifying hlm that bec3use of dlasatlsfacclon wlth hls lodgment performance rhe ertenslcn of

t m e beyond 31 Pecember l984 would nor; be granted. On 21

January 1985 the applicant requested reconslderatlon of the decision and on the same day had an intervlew wlth an o f f l c e r of

the Taxation Department. On 7 February 1585 the Actlng Deputy

Commlssioner wrote to the applicant informlng him that no relnstatement of arrangements to lodge returns beyond 31 December 1 5 P 4 had been granted ar.d that returns lodged after that date would be liable for additional tax for late lodgment.

Applicatlon may be made under the Admlnlstratlve

. Ijecislons __ ___ _. . . !Judlclal . . __. - . . - Review) - . .._ ___ - . Act --.- for an order of a revlew ,If a

declslon to whlch the Act applles (sec.5). Declsion to whlch

the Act applles 1s relevantly deflned as a declsion of an

admlnlstratlve character made under an enactment other than a

decislon Included In any of the classes of decisions set out in

schedule 1. An enactment for present purposes means an act

.

5.

other than the Commonwealth Places !Anallcatlon of Laws) Act 1 5 7 0

or The Northern Terrltorv (Self Government) Act 1578; an Ordinance of a Terrltory other than the Northern Terrrtory; o r an Instrument (lncludrng rules, regulations or by-laws) made under

such an Act or unr?er such an IOrdlnance. The only enaztment

under :lhlch it is arqued that the Impugned declslons were nade 15

the Inc.?me T&x-Assessment Act. If they were not made under that

Act ther. ttre:J are not declsions to whlch the Adminlstratlve

E.cc.is.lg-.s ..1Ju~tlri.~l._Ije.~e_w._Ac_t	applies and are not reviewable
Ender that Act.

I do not flnd lt necessary to declde whether or not the

decisions are declslons Included In any of the classec of

declslons set out in schedule 1. If they are such declslons

they are not decislons to whlch the Administrative Decl.sions

(Judicial Revlew) Act applies.

Sectlon 8 c.f the Income Tax Assessment Act provide5 that

the Commlssloner shall have the general administration of the

Act. It 1s argued by the applicant that since the Commissioner exlsts only pursuant to the Income Tax Assessment Act and Only acts offlclally because of that Act, then anythlng he does ~n an

offlclal cacaclty 1 s done under the Act. I do not accept this

argumen t .

The Income Tax Assessment Act nowhere gives express or

indeed lmpllclt power to the Commissloner to enter into

.

6.

arrangements wlth tax agents to spread the lodglng of Income tax

returns over a period longer than two months when he has caused to he published a notlce In the Gazette effectively requlrlng all returns to be lodged by 31 August - "There are many activitles In the ordlnarlr course of admlnlsterlng the affalrs of Government

that may be carrled ?n Lndependently of any statutory power

expressly or rmplledly authorlslng the partlcular actrvity",

M-cDonald Ftv Ltd V. Hamence ,1384) 5 2 A.L.R. 135 per Neaves J. at

141. It 15 not suggested that the admlnlcrrative arrangement made by ths Commlssloner wlch tax agents partly for thelr beneflt

and that of their cllents and partly to aid the smooth running of

the Taxation Department are In any sense beyond power even though there 1 s no speclfic or lmplled power given by the Income Tax

&p.es.sment Ast. It seems to me that the arrangements set out In

the circular to which I have referred were not made under the

enactment hut were made under an inherent power of the

Commlssioner to make adminlstrative arrangements alluded to by

Neaves J. in McDonald Ptv Ltd v. Hamence (supra) and by Fox J. in

rjIg&~.~ Faclflc Fty Limited V. Freeland	(1983) 5 2 A.L.R. 185 at
189.

The Commlssloner qf Taxation exists and has his bcin?

. under the Income Tax A5;sessment Act but It does not f o l l o w that

everythlng he does 1 s done "under that enactment". The

reasoning of the Full Court of thls Court in Australlan Natlonal

Universitv v. Burns (1982) 43 A.L.R. 25 1s of great asslstance.

7.

I certify that this and the 6 preceding pages are a true copy of the Reazonz f a r Judqment of Mr Juztice Forster.

Dated: 2 1 May 1335

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