Bonnell v Commissioner of Taxation

In the case of Bonnell v Commissioner of Taxation, the appellant, who is the taxpayer, sought to challenge a notice of amended assessment issued by the respondent, the Commissioner of Taxation. The notice disallowed a $5 million deduction claimed by the taxpayer for the year of income ended 30 June 1999, and resulted in additional tax, penalty and interest being imposed. The taxpayer contended that the decision not to remit the additional tax was invalid due to alleged procedural flaws and bad faith. The court was required to determine the validity of the notice of amended assessment and whether the decision not to remit the additional tax was made lawfully.

The court found that even if the decision not to remit additional tax was made in bad faith, it would only mean that the $606,250 tax may not be due and payable. The notice of amended assessment remained effective in creating a liability to pay other amounts and was therefore valid to that extent. The court concluded that the taxpayer was not entitled to an order that the notice of amended assessment be set aside in its entirety. The court found no error in the primary judge's dismissal of the proceeding and dismissed the appeal. The court also dismissed the respondent's cross-appeal and motion for leave to appeal from a prior order.

The court ordered that the appellant's appeal be dismissed and the respondent's cross-appeal and motion be also dismissed. The appellant was ordered to pay the respondent's costs. The court's decision upheld the validity of the notice of amended assessment and the decision not to remit the additional tax, finding no reasonable prospect of the taxpayer successfully prosecuting the proceeding.