Cameron v Deputy Federal Commissioner of Taxation for Tasmania

Donald Norman Cameron appealed to the Supreme Court of Tasmania against income tax assessments made by the Deputy Federal Commissioner of Taxation for Tasmania for the financial years ending 30 June 1918 and 30 June 1919. The dispute centred on the inclusion of sums representing the excess value of live-stock owned at the end of each financial year over their value at the beginning of that year. Ewing J. of the Supreme Court of Tasmania stated a case for the opinion of the High Court of Australia.

The High Court was required to determine whether the excess value of live-stock should be taken into account in computing a grazier's income under section 14(a) of the *Income Tax Assessment Act 1915-1918*, and if so, how that value should be ascertained. Specifically, the Court had to consider the meaning of "value as prescribed" as introduced into the Act by a 1918 amendment, and the validity and applicability of regulations made under the Act, particularly Statutory Rule 1917, No. 280, and Statutory Rule 1918, No. 315.

The majority of the High Court, comprising Knox C.J., Isaacs, Gavan Duffy, and Rich JJ., held that the phrase "value as prescribed" in section 3 of the *Income Tax Assessment Act 1915-1918* meant an artificial or arbitrary sum to be deemed the value, rather than the true value ascertained in a prescribed manner. They further held that Statutory Rule 1918, No. 315, was invalid. Consequently, for the purpose of ascertaining the value of live-stock under section 14(a), the Commissioner could not rely on regulation 46 of Statutory Rule 1917, No. 280, as that regulation was inconsistent with the Act under which it was made and was not validated by the subsequent 1918 amendment. The Court found no other provision in the *Income Tax Assessment Act 1915-1918* that prescribed a value for live-stock.

Accordingly, the majority of the Court concluded that in ascertaining the income of a grazier under section 14(a), no sum could be taken into account in respect of the excess in value of live-stock owned at the end of the assessment year over its value at the beginning of that year. Starke J. dissented.