British American Tobacco Australia Ltd v Western Australia

British American Tobacco Australia Ltd (BAT) appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of Western Australia. The dispute concerned the recovery of licence fees paid by tobacco wholesalers and retailers to the State of Western Australia under laws that were subsequently found to be invalid by this Court as contravening section 90 of the Constitution, which reserves the exclusive power to impose duties of excise to the Commonwealth Parliament. The core of the matter was whether the State could retain these payments, which had been made under the erroneous assumption of the laws' validity.

The High Court was required to determine whether the State of Western Australia was entitled to retain licence fees collected under laws that had been constitutionally invalidated as duties of excise. This involved considering the fundamental principle that no tax can be levied without parliamentary authority and how this principle applies in the context of payments made under a mistake of law. The Court also had to address the applicability of State laws, such as the Crown Suits Act 1947 (WA) and the Limitation Act 1935 (WA), to actions brought against the State in federal jurisdiction, particularly those arising under section 76(i) of the Constitution.

The Court reasoned that the principle that the Crown cannot retain money it lacks authority to receive, particularly when paid by mistake as tax, is a fundamental aspect of public law and constitutionalism. This principle, derived from the Bill of Rights 1688 and reinforced by the Australian Constitution, dictates that the executive government requires valid parliamentary authority to levy taxes. The Court found that the Full Court of Western Australia had overlooked this starting point in its analysis. The appeal was allowed, and the orders of the Full Court were set aside, with the result that the appeal to the Full Court was dismissed.