Cachia and Commissioner of Taxation

[2008] AATA 363

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 363

ADMINISTRATIVE APPEALS TRIBUNAL      )

) No.  NT 2006/0366

TAXATION APPEALS DIVISION		)
Re		SAVIOUR CACHIA

Applicant

And COMMISSIONER OF TAXATION  

Respondent

DECISION

Tribunal Senior Member M D Allen

Date4 March 2008

PlaceSydney

Decision I direct the Registrar of the Tribunal remove this matter from the list of matters to be heard by the Tribunal, as the Applicant has failed to pay the fee required by Regulation 19AA of the Administrative Appeals Tribunal Regulations 1976.

..................[sgd]......................

M D Allen
  Senior Member

CATCHWORDS     

JURISDICTION – applicant waived right to an amount in excess of fee payable in taxation division bringing himself within jurisdiction of small taxation claims tribunal – fee dependent upon amount of tax in dispute – amount of tax in dispute not less than determined amount – applicant not willing to pay taxation division fee – matter removed from list of matters to be heard by tribunal

LEGISLATION

Administrative Appeals Tribunal Act 1975 sections 24AA, 24AC, 24AD and 43

Administrative Appeals Tribunal Regulations 1976 regulation 19AA

Law and Justice Legislation Amendment Act 1997

Taxation Administration Act 1953 sections 14ZZ and 14ZZK

CASE LAW

Federal Commissioner of Taxation v Dalco (1989-90) 168 CLR 614

REASONS FOR DECISION

4 March 2008  Senior Member M D Allen

1.     On 4 March 2008, I directed that the Registrar of the Tribunal remove this matter from the list of matters to be heard by the Tribunal, as the Applicant had failed to pay the fee required by Regulation 19AA of the Administrative Appeals Tribunal Regulations 1976.

2. At the time, I gave extempore reasons for my decision. Although my direction is on an interlocutory matter, and I am not required by section 43 of the Administrative Appeals Tribunal Act 1975 to give written reasons for my decision, the Applicant had requested written reasons. These are those reasons.

3.     On 19 September 2006, the Applicant lodged, with the Sydney Registry of the Tribunal, an application to review a decision made by the Commissioner of Taxation.

4.     In that application for review, the Applicant described the decision regarding which review was sought as:

a)“The Australian Taxation Office, for the year ending 2005, disallowed my objection against its decision to disallow my deduction for legal expenses of $15,914. 

b)The Australian Taxation Office, for the year ending 2005, disallowed my claim for compensation for my financial loss due to its lateness in issuing me my tax-refund that was due to me because of excessive ATO tax withholdings”.

5.     The Applicant further requested in his application for review, that the matter be dealt within the Small Taxation Claims Tribunal stating:

“I seek an ‘in principle’ ruling by the STCT without specifying an amount of money.  Alternatively, I waive my right to an amount in excess of $5,000 so as to vest jurisdiction in the STCT.” 

6.     The Small Taxation Claims Tribunal was created by the Law and Justice Legislation Amendment Act 1997, which inserted Part IIIAA into the AAT Act. Section 24AC AAT Act states:

“(1)subject to section 24AD if an application is made for the review of a relevant taxation decision, and

(a)     either:

(i)     the application states the amount that the Applicant considers

to be the amount of tax in dispute and the amount so stated is less than the determined amounts; or

(ii)the application does not state as mentioned in subparagraph (i) but before the start of the hearing of the application, the Applicant notifies the Tribunal in writing of the amount that the Applicant considers to be the amount of tax in dispute, and the amount so notified is less than the determined amount; or

(aa)the decision relates to an application made by the Applicant under section 340-5 in Schedule 1 to the Taxation Administration Act 1953; or

(b)the decision is a decision refusing a request for an extension of time;

the Taxation Appeals Division, when hearing and determining the application, is to be known as the Small Taxation Claims Tribunal. 

(2)A notification maybe given to the Tribunal under subparagraph (1)(a)(ii) in respect of any application for the review of a relevant taxation decision, whether the application was made before, or is made after, the commencement of this section.

(3)Subject to section 24AD, if subparagraph (1)(a)(ii) applies, the Applicant is entitled to a refund of so much of the application fee paid as exceeds the lower application fees.  Section 24AD AAT Act then provides subsection (1) if;

(a)an application is before the Small Taxation Claims Tribunal under paragraph 24AC(1)(a); and

(b)the Tribunal considers that the amount of tax in dispute is not less than the determined amount;

the tribunal may make an order declaring subsection 24AC(1) is not to apply.

(4)  If such an order is made:

(a)the Taxation Appeals Division when hearing and determining the application, is not to be known as the Small Taxation Claims Tribunal; and

(b)The Tribunal must not proceed to hear and determine the application until the Applicant pays an additional fee in respect of the application equal to the difference between the standard application fee and the lower application fees; and

(c)If the additional fee is not paid within the period directed by the Tribunal or, if no such direction is given, within the prescribed period, the Tribunal may dismiss the application …”

“The phrase “determined amount” is defined in s 24AA AAT Act as meaning:

(a)subject to paragraph (b) - $5,000; or

(b)if a higher amount is determined by the Regulations – the higher amount.”

7. Section 14ZZ of the Taxation Administration Act 1953 states:

“If the person is dissatisfied with the Commissioner’s objection decision (including a decision under paragraph 14ZY(1A)(b) to make a different private ruling), the person may:

(a)if the decision is both a reviewable objection decision and an appealable objection decision – either:

(i)     apply to the Tribunal for review of the decision; or

(ii)     appeal to the Federal Court against the decision; or

(b)if the decision is a reviewable objection decision (other than an appealable objection decision) – apply to the Tribunal for review of the decision; or

(c)if the decision is an appealable objection decision (other than a reviewable objection decision) – appeal to the Federal Court against the decision.

Whereas, s 14ZZK of the Administration Act states:

“On an application for review of a reviewable objection decision:

(a)the Applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and

(b)the Applicant has the burden of proving that:

(i)if the taxation decision concerned is an assessment (other than franking assessment) – the assessment is excessive; …”

8.     Pursuant to Regulation 19AA of the AAT Regulations, an application to the Tribunal in its Taxation Division in 2006 required a fee of $639.00, whereas an application to the Small Taxation Claims Tribunal was, again pursuant to Regulation 19AA, the sum of $64.00.

9. The filing fee required by the AAT Regulations, and by s 24AD AAT Act, is dependent upon the amount of tax in dispute.  In this matter, the objection decision which is disputed by the Applicant refers to an amount of $15,914.00, that is to say, an amount not less than the determined amount (namely $5,000.00).

10.   It is nothing to the point that the Applicant, in order to bring himself within the jurisdiction of the Small Taxation Claims Tribunal, states that he waives his right to an amount in excess of $5,000.00.  The amount in dispute is $15,914.00.

11. As pointed out in s 14ZZK of the Administration Act, the Applicant is required to prove that the assessment is excessive.

12.   In this matter, I have assumed from the application for review, that this is one of those cases as referred to by Brennan J (as he then was) in Federal Commissioner of Taxation v Dalco (1989-90) 168 CLR 614 at 625 “…where all the material facts are known and the amount of taxable income dependent upon the legal complexion of those facts” in which case, the legal expenses claimed by the Applicant would either be allowed either in full or in part for the objection decision affirmed.  Either way, the sum in dispute is not less than the determined amount, and the matter cannot be listed in the Small Taxation Claims Tribunal.

13.   For the above reasons, I made the direction set forth in paragraph 1 of these reasons for decision.

I certify that the 13 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen.

Signed:             [sgd]           .....................................................................................
  Mwela Kapapa, Associate

Date/s of Directions Hearing     4 March 2008 
Date of Decision  4 March 2008
Solicitor for the Applicant          Self-represented
Solicitor for the Respondent    ATO Legal Services Branch