Capital Duplicators Pty Ltd & Anor v Australian Capital Territory and Anor

.

• ~

IN THE HIGH COURT OF AUSTRALIA

Registry No CS of 1990
B e t w e e n -
CAPITAL DUPLICATORS PTY LTD
and LUHAZE ACT PTY LTD

Plaintiffs

and
AUSTRALIAN CAPITAL TERRITORY
and COMMISSIONER FOR
AUSTRALIAN CAPITAL TERRITORY
REVENUE

Defendants

Questions Reserved pursuant
to section 18 of the
Judiciary Act 1903

MASON CJ
BRENNAN J
DEANE J
DAWSON J

TOOHEY J
GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 21 APRIL 1993, AT 10.25 AM

(Continued from 20/4/93)

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MASON CJ: Yes, Mr Jackson.

MR JACKSON:
Your Honours, before moving on to deal with
submissions on the question of reopening may I
mention two matters: the first concerns my learned
friend Mr Bennett's application to amend to raise
questions dealing with the amending Act. In
relation to that, I have had a discussion with my

learned friend this morning. His amendments are
not yet in a form that is suitable for the Court.
We thought that subject to the Court a convenient
course might be if the matter were to be mentioned
when the Court resumes tomorrow morning, and if
there are any difficulties or any further arguments
that seek to be addressed on the question, then we
will put those arguments briefly in writing.
MASON CJ: Yes, that is acceptable, Mr Jackson.

MR JACKSON: Your Honours, in that regard I do not propose
to put any additional submissions orally about the
effect of the new Act, and any submissions we wish
to make will be made in writing. That is the first
thing.
The second thing concerns one matter.

Your Honour Justice Brennan at the end of the day
yesterday asked me a question dealing with the ability of a State to impose a tax relating to production in another State. Your Honour, I do
propose to deal with that in some further detail

having given some further consideration to it. I
wish to deal with it if I may at a rather later
point when I am dealing with the substance of the
matter.
Turning then to the question of the

appropriateness of reopening the earlier decisions
on section 90, may I seek to make a number of

points. The issue, of course, is one which is
constitutional. It is not simply a question of the
review of a previous decision of the Court on a
non-constitutional matter. Its importance is that
the resolution of the ambit of the prohibition in
section 90 defines the extent to which the States
and now, of course, the self-governing territories
as well are excluded absolutely from imposing
taxes, to put it shortly, on goods.
Your Honours, one of the results of the course

that has been adopted so far by the Court has been
that the revenue of the States has had to be made
up by very significant Commonwealth grants,
together with a number of other effects which are
discussed, as I intimated yesterday, in some
documents to which I wish to come which derived
from the Constitutional Commission which was

Capital(4) 90 21/4/93
established at the end of 1985, and which reported
finally in 1988.
The Constitutional Commission had a number of

advisory committees, one of which was the advisory
committee on trade and economic management and one
of the topics considered by that committee was the question whether it should be recommended that the
States have the power to impose duties of excise,
and in the course of arriving at its conclusions on
that topic the advisory committee discussed the
effect of the presence of section 90 and of the
effect of the decisions of the Court in relation to
it and, Your Honours, what I propose to do is to
take Your Honours, and I will do so as briefly as I
can, to some aspects of the report of the advisory
committee and then the report of the Constitutional
Commission itself, which considered similar issues
deriving from the committee's report.
Now, Your Honours, may I go first to the

report of the advisory committee of which
Your Honours have copies.

BRENNAN J: This is, "Report to the Constitution

Commission"?

MR JACKSON:

Yes, Your Honour; that is the advisory

committee's report. The members of the advisory
committee appear on the next page in the left
column and you will see the chairman of it was
Mr Justice Everett who, of course, had experience
both at a high political level as well as of a
judicial level.
Now, Your Honours, I wonder if I could go

first to page 8. The introductory pages are placed
there so Your Honours will see the whole content of
the report if Your Honours want to see something

else, but at page 8 there is a summary under the heading "Excise duties" of the recommendations of

the advisory committee. Now, Your Honours, I will
not take Your Honours particularly to the first
three paragraphs under that heading, but I would
invite Your Honours to read them, and then
Your Honours will see the view expressed by the
majority of the committee as being:
that opposition to the removal of the
prohibition -

that is in section 90 -
is not based on acceptable economic
propositions and that essentially there are
four reasons why the States should have access
to some excise duties.

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Now, Your Honours, may I pause at that point to say
that when they are speaking about excise duties,
they are speaking about excise duties within the
broad concepts which have been adopted by the Court
and that is a duty on goods, in effect, at any time
from production down to, but perhaps not including,
consumption.

BRENNAN J:	What are we looking at this for, Mr Jackson?
MR JACKSON:	Your Honour, what we are looking at it for is

to show a number of things. They go to the
question of whether it is appropriate for the Court
to reopen the previous decisions in relation to
section 90; that is the broad heading under which I
am dealing with the topic, and Your Honour, what I
am seeking to derive from it is a number of things:
one is - and Your Honour will see this, for
example, in the second noted paragraph at page 8,
the second dot beside it - that the approach taken
in the decisions has had the result that the
States - I am sorry, the third one - there are:
doubts and uncertainty in relation to the
powers of the States -

and also if one goes to the previous subparagraph,
the States have been forced:
to resort to avenues of taxation that are
regressive or otherwise undesirable -

and the point I am seeking to make from all that, Your Honour, is that those factors are ones which
are really of great importance in the Federation
and they are matters which should militate in
favour of the Court considering again the previous
decisions of the Court. That is the reason why I
am going to it, Your Honour.

BRENNAN J:

I must say that for myself I find these reasons

rather tenuous. In so far as there is doubt as to
the judicial interpretation, that would be, one
would think, a matter for this Court to consider
rather than looking to other people's opinions as
to the doubts that might be attendant upon the

judicial interpretations. As to the general
stringency which was the view of a majority only of
this committee, it seems, one has to think of what
other prospects there are for the raising of taxes:
the abolition of death duties by the States
themselves, for example. What does one do? It
says it is politically desirable, therefore we
should reconsider.

MR JACKSON:

No, Your Honour, what I am saying is this - and

I have so far only referred to a summary of it, and

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the matter is discussed rather more fully in the

passages to which I propose to come. But may I say
in relation to it that undoubtedly there are other
means available to the States to seek to raise
funds, but a point which is made in the report of
the Constitutional Commission itself, for example,
is simply the point that the wider interpretation
of the nature of duty of excise that has been taken
by the Court is one that has the result that the
States have become much more mendicant - and the
word is mine, not theirs - in relation to the
Commonwealth than might well have been the case.
The point that I am seeking to make in

relation to that is simply this, that if there are
two interpretations open, one of the
interpretations was the earlier one adopted by the
Court and and it did not have such an effect. The
other interpretation is one that has had that
effect. If the two versions are open, then it is
appropriate for the Court to consider again the
decision.
The Court may arrive at the same result, of

course, but it is appropriate for the Court to
consider it because, Your Honour, this is an area
of course where, in arriving at the views which

have been taken, the Court has expressed views
deriving from the Constitution, of course, but of
course in large measure they also derive from
perceptions about the effect of the provisions of
section 90 and the provisions around it.
The views that are expressed in the passages

which support, which are discussed in the advisory
committee's report, are ones which deal in part
with those topics also.
I have indicated to Your Honour the passage at

page 8. May I move from that to page 17. At
page 17, under the heading "Excise duties", the

discussion - Your Honours will see another
topic commences at page 151 in the major text of
reference to it at about point 8 on the page, which

the work. Your Honours will see, under the
heading, "Constitutional Provisions", there is a
summary of the effect of the decisions of the
Court.
Your Honours will see then, in the second heading on page 151, "Defects in the Present
Arrangements", and Your Honours will see, for
example, the second one there sets out the
provisions of section 90 and the Court's

interpretation has caused four problems. May I
refer to the second, third and fourth of them?

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Your Honours, the matter referred to at the top of page 152 is something that, undoubtedly,
does occur. Now, Your Honours, it is one answer to
say that, of course, that will be resolved on every
occasion by the Court, but if the position is that
the nature of the test that has been applied, is a
test that is productive of constitutional
challenge, rather than one that is not, then that,
we would submit, is a factor militating in favour
of a reconsideration of the test.
Your Honours, at page 152, may I refer particularly to the headings, "Increased taxation",
"Economic management", and "Uniform national
taxation policy", where what members of the
committee are there doing is setting the

contentions one side and the other. And also
Your Honours will see the heading, "Disruption to
Commonwealth tariff policy", on page 153 where the
same approach is being taken.
One then goes to page 159 where the committee

sets out its view under the heading, "Excise: The
Committee's View". In the fourth line under that heading, it says:
In the opinion of this majority, the present
situation is patently unsatisfactory.

It refers to it contributing:
substantially to the endemic problem of
vertical fiscal imbalance -

and the other matters, Your Honours, there referred
to in that paragraph.
Your Honours, one goes then to page 160 and

the passage to which I refer particularly is the
passage at page 160 commencing in the second-last

paragraph on the page where it says "The Committee
was more concerned with three other objections".
Now, Your Honours will see those objections are
dealt with at the bottom of that page and
throughout the next page and Your Honours will see
that the discussion there is really concerned with
matters that have been adopted in various judgments of members of the Court to support the wider notion of the duty of excise.
Finally, Your Honours, in relation to the

Committee's report, may I refer to page 162 where
the Committee said that its recommendation - and,
Your Honours, this is immediately above the heading
"Recommendation" - was that there should be a power
to impose consumption taxes as in the States of the
United States.

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Your Honours, that was the report of the advisory committee and the matter then went to the
Constitutional Commission itself. In its final
report set out at page 28, a summary of its
recommendations, Your Honours, at about three-
quarters of the way down the page you will see a
two line paragraph which says:
We recommend that the States be empowered to
levy excise duties, by omitting the words 'and
of excise' from section 90.
Your Honour, that is in the opening part of

the report, the Summary of Recommendations. When one comes to the body of the report, the relevant
pages, the page numbered 820 under the heading
State Excise Duties, Your Honours will see at
paragraph 11.242 it said - the recommendation is
there set out again and the reasoning in support of
that, Your Honours, appears in the succeeding

paragraphs. May I refer to paragraphs 11.246
through to 11.250 -

MASON CJ:	We do not seem to have that, Mr Jackson.
MR JACKSON:	I am sorry, Your Honour, what there should be

in the pages Your Honour has consists of, first, a
cover sheet; secondly, some pages that are headed
"Summary of Recommendations from the Final Report

of the Constitutional Commission". They should be
pages numbered 1, 28 and 29.

MASON CJ: Well, we do not have that.

MCHUGH J:	I do.
MASON CJ:	Oh yes, 28 and 29.
MR JACKSON:	Your Honour, immediately following those should

be a page numbered 820.

MASON CJ: Yes, 820 and then 821.
MR JACKSON:	Yes, and the part I was at was paragraph 11.242

on page 820.

BRENNAN J:	I think we might have a different page 820.
MASON CJ:	I have only got continuation and then a little

(c) paragraph: "imposing, with the consent of both
Houses of the Parliament". It obviously is a draft
of some kind.

MR JACKSON:

Yes.

Your Honour, I am sorry to have to

inquire but do Your Honours have any pages that
have the paragraph numbers 11 and about 240?.

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MASON CJ:	No.
MR JACKSON:	Your Honours, I am distressed at that.
MASON CJ:	On 823 I have a paragraph numbered 11. "The

Constitution is altered by repealing section 89."
But that is not what you are referring to.

McHUGH J:

I have got page 28 which says "Chapter 11.

The

National Economy".

MR JACKSON:

Yes.

Your Honour, page 28 is part of the

summary at the start.
Your Honours, I will have copies given to the

Court as soon as I can, but may I seek to indicate
the points that are made in the relevant paragraphs
as briefly as possible.
First of all, paragraphs 11.245 to 11.250 seek

to summarize the present legal constitutional
position. It is then said, in paragraph 11.251
what are the issues that arise in relation to
section 90 and they are said to be three: the
meaning and object; the effect on the States and,
in particular, on their ability to exercise their
constitutional functions; and, thirdly, the
protection the section gives to federal policies
relating to national economic management by fiscal
means.
Now, Your Honours, the points that are made,

first of all in relation to the effect of the
decisions, is this, that the decisions have
produced much uncertainty about what constitutes an
excise duty and they express the view, with which
members of the Court might not agree, that the
decisions do not indicate any clear purpose in

depriving the States of the power. They refer to
the fact that the decisions enable the courts to

levy by indirect and circuitous means what, to the
average person, is to a sales tax, while apparently
denying the States the direct power to levy a sales
tax. They speak of the undesirability of there
being devices for drafting.
They go on to say, in paragraph (b), that

there are many types of taxes that are denied to
the States by section 90, and they discuss those to
some extent, but they say that, as a practical
matter, the States were, in 1942, deprived of the ability to levy income tax and they have not done
so since then.
They speak of the States being reimbursed for

the loss of income tax pursuant to section 96, but
then go on to say that the absence of a State

Capital(4) 96 21/4/93
income tax, combined with the lack of power to levy
various forms of indirect tax under section 90, has
led to the result that the Commonwealth raises far
more than is required for its own purposes, while
the States raise far less than they need. It is
this situation that constitutes the financial
vertical imbalance.
They speak of the difference being made up by

section 96 and then go on to say, at page 825, that
while a situation of fiscal vertical imbalance and
federal grants to States exists in most federal
countries, the degree of imbalance is far greater
in Australia than in any other country, which they
go on to elaborate upon.
They then speak of the main arguments against

giving - identify the main arguments against giving the States the power to levy excise duties and they proceed to set out, in paragraph 11.266, the
reasons for their recommendation. Essentially,
they are these, that:
The States cannot be expected to plan their
Budgets if important taxes remain subject to
constitutional doubt ..... in respect of fees to
carry on a business, the judicial decisions
have forced the States to impose taxes by

technical and devious means. The distinctions
drawn in the area have no social or economic
justification.

And they go on to elaborate upon that. At
paragraph 11.267, Your Honours, they say, in
relation to the question of policy, that:
not only does a high fiscal imbalance impair
the functioning of the State as an independent
unit of the federation, it tends to sap at

least some of the duties of responsibility and
sound decision-making that are the
concomitants of governmental control. This in
turn severs the link between policy making and
electoral control.
May I just say this, Your Honours, that that

feature - that is, that the increased need to rely
on grants is one that contributes to a situation
where, in a sense, the States become less willing
to change it because it is no doubt politically
more acceptable to be able to say, "Well, we didn't
do very well at the Heads of Government meetings",
rather than to be in a position of taking the
political responsibility for imposing taxation and,
Your Honours, one can perhaps see that manifested
in the enthusiasm with which some of the States in

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the present case want or do not want to change the
current system.

McHUGH J: But, Mr Jackson, I would have thought, reading

this report very quickly, that it rather favoured
the judiciary maintaining the status quo rather
than attempting by judicial decision to do
something different from what has been done. For
example, the majority of the committee are not in
favour of the States having power to impose taxes

on the production of goods. They are more in
favour of a consumption tax which is open, is it
not, under the existing authorities? And the
committee declares that it does not say that State

taxation of goods is not capable of interfering
with some national economic policies.

MR JACKSON:

They say it is a question of degree,

Your Honour.

McHUGH J:

I know, but once that point is conceded it is

very difficult for this Court to start off afresh,
is it not?

MR JACKSON:

Not really, with respect, Your Honour.

The

burden of what is being said by the commission - it
is very difficult with Your Honours not having
that - is really this: that they are assuming the
existing situation, as it were, that is, a
situation with some doubt as to the position in
relation to consumption taxes, and with a number of
other areas perhaps that are on the edge of it.
In relation to that, what they say - and

Your Honour will bear in mind that they are dealing
with the situation of recommending should there be
change - and they say there should be change.
There should be change by there being the
conferring on the States of an ability to impose a

duty of excise.

McHUGH J: But coupled with a section Sl(a), or something,

was it not, or (l)(a), in which the Commonwealth
would have power to make laws setting aside State
laws which interfered with national policies.

MR JACKSON: That is one of their recommendations, but that

was a view - and this is a point I was going to
mention when I come to the commission report - the
commission itself said that that, in a particular
area, is one that may be fine if it is introduced,
but it is really unnecessary because as a matter of
reality you do not need to have a power of that
kind because of the ability of the Commonwealth in

any event to use its other powers. I am not
strictly talking about legal powers; to use its

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other powers in the field to discourage taxation in
appropriate cases.

McHUGH J:

I am sorry to interrupt you for the moment, but I

would like to hear you at some stage on the power
of the Commonwealth to set aside State taxes which

interfere. I know that in Hematite two Justices
said the Commonwealth has the power. Speaking for
myself I have grave doubts about it.

MASON CJ:	I would like to hear you on that as well.
MR JACKSON:	Your Honour, I propose to say something about

that when I come to deal further with the question
that Justice Brennan asked me yesterday. There is
perhaps an area where at the edge of it it is

perhaps a little blurred. I would not seek to go
to the extent of saying, for example, that the
Commonwealth can legislate in circumstances where
it has no legislation at all in place of its own on
a cognate topic simply to prevent State legislation
on the topic.

MASON CJ: That, I think, was the view that

Chief Justice Gibbs and I expressed in Hematite.
On reflection, I doubt myself whether it is
correct.

MR JACKSON:

Your Honour, I do not seek to go as far as

that, but it is a particular area which has not in
a sense been much examined. That is why I say
there may be an edge to it which depends on
particular cases, but may I deal with that a little
later.
Your Honours, the point I was seeking to make

is that if one goes to the particular paragraphs to
which I will give Your Honours a reference for the moment in the remainder of this report, it becomes

apparent, we would submit, that it is appropriate for the Court, for the reasons there set out, to give further consideration to the appropriateness
of the current test.
May I refer Your Honours to paragraphs 11.268

through to 11.275 and also paragraphs 11.279 and
11.281. In particular, in paragraph 11.275 what is
said is this:
We have considered whether the omission of
excise duties ..... should be coupled with a
recommendation that the Parliament have
express legislative power to exempt persons

from the payment of State excise duties. We
have decided against such a recommendation.
We believe that the Commonwealth has
sufficient overall power in relation to

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borrowing, taxation and other financial
matters to ensure that State revenue laws do
not impede federal policy. Despite imposition
of excise duties by the States, the
Commonwealth would ..... remain the major tax

gatherer. The States will still be the
recipients of large federal grants. These
facts, together with its own powers over banking and overseas trade and financial
transactions, will ensure its power to control
State borrowings and to influence State
Budgets. All this results in a degree of actual power that, in our view, makes
unnecessary any express legal power (other
than that which already exists) to override
State excise duties.
Your Honours, what has happened in relation to the
documents that Your Honours have is that the
commission issued two reports; a first report, then

a final report. The pages Your Honours have been
given apparently come from the first report rather
than the final report. The report I was referring
to was the final report and we will get
Your Honours copies of that; I apologize again.
Your Honours, whatever might be the position in relation to non-constitutional issues or to
perhaps less important constitutional issues, in a
case such as this, we would submit, where the issue
is of importance, the Court should reconsider the

matter. I will not go to the detail of the cases,
but may I give Your Honours a reference of course
to Queensland v The Commonwealth, (1977)
139 CLR 585 at pages 593 per Chief Justice Barwick

and 610 per Justice Murphy. Your Honours will
recall that in Cole v Whitfield, the reasons for
judgment of the Court in that case record the fact
that members of the Court expressed their own views
on section 92 over many years in effect. That is

(1988) 165 CLR 360 at page 384. In the passage
commencing on the third line on the page,
Your Honours say:
Over the years the Court has moved uneasily between one interpretation and
another in its endeavours to solve the
problems thrown up by the necessity to apply
the very general language of the section to a
wide variety of legislative and factual
situations.

Then the shifts are referred to and at about
point 6 on the page:

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In more recent years various members of the Court have declined to accept and apply the
criterion of operation formula.
And, Your Honours, that is simply an example of an
area of constitutional interpretation where members
of the Court have felt the obligation to apply

their own views. And Your Honours, the functions
of a member of the Court, in this regard, were
referred to very recently by Your Honour
Justice Deane in Stevens v Head, (1993) 112 ALR 7, at page 27, where Your Honour put it, if I might

say so with respect, very elegantly. Your Honour
said at about line 23:
There are, however, weighty statements of
authority which support the proposition that,
in matters of fundamental constitutional
importance, the members of this court are obliged to adhere to what they see as the requirements of the Constitution of which the
court is both a creature and the custodian.

Your Honours, the issue, we would submit, is one which is really of fundamental importance so far as
the position of the States is concerned and, of
course, until the earlier decision in this case it
had not generally been supposed that the
self-governing territories were prohibited for
imposing duties of excise and, Your Honours, the
Australian Capital Territory, of course, if I might
raise a small cri de coeur, has never been heard by
the Court on the question of the meaning of the
duty of excise.
Now, Your Honours, what we would submit also

is that a feature which has become apparent is that
the interpretations of section 90, which have been
adopted, have brought the court to, or perhaps

close to, a situation which we would submit is comparable to that obtaining in Cole v Whitfield,
165 CLR 360, where Your Honours observed in that
case, in a passage which goes from page 384 about
point 2 to page 385 about point 3 - to the effect
that there was now no settled interpretation of
section 92 and that that was a matter which was
germane to the question of reopening, and may I
refer Your Honours to the passage, page 384 point 2
through to 385 about point 3.

Now, Your Honours, the issue as to the correct interpretation of section 90 was also adverted to
by members of the Court in Philip Morris v
Commissioner of Business Franchises, 167 CLR 399.

May I take Your Honours, very quickly, to the references in the various reasons for judgment.

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At page 425, in the joint judgment of
Your Honour the Chief Justice and Justice Deane,
commencing at about point 4, Your Honours will see
the passage:
For this reason efforts have been made to
elucidate the meaning of the text by reference
to what has been seen as the constitutional
purpose ..... The quest for a constitutional
purpose has proved to be almost as contentious
as the quest for a meaning of the text has
been elusive. In the result the absence of a
judicial consensus -

et cetera.
Your Honours, at page 443, about half-way down

the page, Your Honour Justice Brennan referred to
the fact - at about point 4 - that:
the problem -

that is, whether Dennis Hotels should be
reconsidered -
has proved to be more difficult than it then -

meaning at the start of that case and the
immediately succeeding case -
appeared.

And Your Honour said, at about point 6:

Whether the time has come when a review of the
cases decided under s 90 should be
undertaken ..... is a question which is not now
to be answered.

passage which commences at point 9 on the page - Your Honour Justice Dawson, at page 471, in a
and Your Honour's reasons, relevantly, go through
to page 474, at about point 3, where Your Honour discussed the cases which had occurred and said,
particularly, at the bottom of page 473, that:
Perhaps the basic error was to depart

from the limited conception of an excise duty
which the Court laid down in Peterswald v
Bartley.

And it is clear enough, we would submit, with
respect, from Your Honour's reasons, that
Your Honour was certainly giving consideration to
the appropriateness, in the appropriate case, of
the Court reconsidering the issue.

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At page 477, at about point 8, in a passage

which goes through to page 481, about point 2,
Your Honours Justices Toohey and Gaudron refer, for
example, at the top of page 478, to the fact that:
There has not been complete unanimity in

the view that the goods which may attract a duty of excise prohibited bys 90 are goods
produced or manufactured in Australia.

Your Honours discuss, at page 479, in the paragraph
commencing at about point 4:
There is much to be said for the view

that the text of the Constitution favours the
identification of goods -

et cetera. And then, Your Honours, going through
to page 481, at about point 2, it is clear again,
we would submit, that Your Honours' views are ones
which are of such a nature that make it appropriate
for the Court to give further consideration to the

question. Then at page 488, Your Honour
Justice McHugh, at about point 2 on the page,
referred to the fact that it might be tempting to
think that there should be a review of the whole
matter by the Court.
Now, Your Honours, a real practical difficulty

which exists with the current tests, whatever
exactly it may be, is that it does leave the States
and, of course, now the self-governing territories
in a position where their ability to tax is
constantly subject to attack and the attack, of its
nature, is one which is likely to keep nipping away
at their ability.
When I say, ttconstantly subject to attacktt,

what I mean is this, that if there were to be a
test of the nature which we would suggest, it is
one which is, of its nature, fairly clear in
application. That is not quite so, with respect,
of the current test when one looks to the fact
that, of their nature, they are ones which can be
applied either by the use of a criterion of
liability test or by the use of a test involving
the substance of the law.
Now, if one does that, the difficulties are created in every case of trying to identify whether
a particular law is or is not within the
prohibition.

BRENNAN J: What do you understand the present test to be

that is open to that criticism?

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MR JACKSON:

Your Honour, in this regard, that the present

test seems to be one that says that a duty or a tax
which is imposed in relation to goods, and by some
reference to goods, whether it be in relation to
their production, manufacture, distribution or any
dealing, let us say, perhaps prior to consumption,
is a tax which is a duty of excise if it satisfies
one of two tests, one test being, if on its face it
is imposed in such a way as to satisfy that
characteristic; the other is, if its effect is to
impose such a tax.
Now, Your Honour, what that means is that

there will always be questions on the fringe,
whether particular taxes do in substance, have that

effect. The question of looking at the Act on the

face of this, is perhaps not so difficult. The
test of looking at the substance of it will always
be one that gives rise to questions about whether
in substance something does or does not have the

effect. Now, Your Honour, the way in which the
current - - -

BRENNAN J:

But the effect that you have spoken of is an

effect which you express in terms of, "in relation
to". Is that the test?

MR JACKSON: Well, Your Honour, those are the words I used,

but the test has been expressed in various ways and
the fact of there being different methods of
expression of them, is itself something that gives
rise to potential difficulty. If the test is, are
they imposed on goods, it may be one thing, but
perhaps that comes to no more than a synonym for,
"in relation to" or "in respect of".
Now, there are no doubt differing views as to

the ambit of those terms, which no doubt have an
elasticity about them and, Your Honour, it is very
difficult to say precisely what they mean in a

particular case. But if you add to that the fact
that the current tests seem to be tests which
require one to look, not at the actual operation of
the tax in particular cases but also at the
tendency, one then has a combination of a tendency
assumed by the Court, but a tendency which is
gathered from what is said in some way to be the
substantive effect of the - - -

BRENNAN J:

What is the case which supports the tendency

test?

MR JACKSON:

Your Honour, it is the passage from

Chief Justice Barwick - and I will just find it in
a moment - but it is cited by Your Honour the

Chief Justice in, I think, Philip Morris. What the
Chief Justice has picked up is something from an

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earlier decision in the Privy Council. It is at
page 431 of Philip Morris, 167 CLR. Your Honour
will see in the first new paragraph on that page
the statement:
A theoretical justification for the view

appears in the judgment of -

Your Honours, the passage that is then quoted is
from Chief Justice Barwick in Chamberlain
Industries, and you will see that he says:
But there is no warrant, in my opinion, to
require it to be established in any particular
case that the tax in question will in fact so
bear on manufacture or production. Its
relevant effect will be presumed: it is enough
that the impost -

et cetera.

BRENNAN J: His Honour's reference there to "so bear on

manufacture or production" takes you back to the
rate or level at which they are manufactured or
produced, does it not?

MR JACKSON:	Your Honour, I think that is right, yes.
BRENNAN J:	I may be reading it wrongly, but I do not read

that as saying that this is a duty of excise if a
tax tends to affect a rate of manufacture or
production.

MR JACKSON: Perhaps I am misunderstanding what Your Honour

is putting to me, but what I was seeking to say was
that - and I was referring to this in answer to
what Your Honour put to me, and that was the
question: where was the difficulty with the current

test. I said one of the difficulties with the
current test was that it involved in some cases a

combination of two things which might well - and I
did not actually use these words - have some
antithetical notion about them, one being that the
thing one has to look at is what appears in that
passage to which I have just referred, which is
that one does not look to see that the tax will in
fact bear on production or manufacture in terms of
rate and level, but at the same time one is looking
to see, on the substance test, what the substance
of a particular law is.

BRENNAN J: If one looks at the substance, does one not look

to see that it is a tax on goods at any stage of
their distribution?

MR JACKSON:

Your Honour, of course.

It is always a

question of identifying what the substance is. I

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am sorry: there is always a question of
identifying what one is looking for and then define
whether something does it in substance or
otherwise. But so far as the substance is
concerned, the question is what is the nature of

the tax. The current view seems to be -
Your Honour, I do not mean to put it offensively in
saying it that way, but the current view of the
Court seems to be that the tax is one which is a
tax which either in form or in substance is imposed
on goods in that stage.
The point I am seeking to make is this, that

if one is looking to see whether a tax in fact is
of that kind, even though on its face it purports
nc~ to be, that that is a question which can be
somewhat confused by taking into account the fact
that one does not have to look to see, apparently,

that the tax in question will in fact so bear. The
two tests seem not to sit together, with respect,
terribly well.
Your Honours, I should also refer to page 436,

at about point 7, where Your Honours the
Chief Justice and Justice Deane also used the
expression of the tax having a general tendency.
That appears in the sentence commencing, "In the
end the reason why" .

MASON CJ:

What page was this?

MR JACKSON:

Page 436, Your Honour, about point 7.

May I

also refer at page 473 in the same case to the
passage - and, Your Honours, I am moving to a
slightly different thing, but in support again of
the application to reopen the earlier cases, to the
view expressed by Your Honour Justice Dawson at
page 473 where Your Honour referred, at point 5
through to about point 7, to the fact that if taxes
are to be treated as duties of excise because they

indirectly add to costs, why do you not take into
account payroll taxes and taxes on industrial land.
And I would refer also to the observation of
Your Honour in the next paragraph quoted from
Gosford Meats.
So, Your Honours, those are the submissions we

would seek to make in relation to the question
whether the earlier questions should be

reconsidered. Your Honours, what I propose to do
now is to move to the substantive argument we would
seek to present on the question of duty of excise,
if the Court were of that view.
Your Honours, moving to that topic, may I say

a number of things by way of introduction. The
first is simply this, that a number of matters will

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be dealt with by other persons advancing arguments
on the issue and I do not want to cover other

ground. So, Your Honours, my argument, I hope,
will be somewhat shorter than otherwise it might
be, but the first thing I would seek to say is that
the first introductory matter is this, that we
would say that it is clear that at the time of
Federation the term "excise" had a meaning which
was capable - and we would emphasize the word
"capable" - of referring to a range of imposts and
taxes and licence fees and they were imposts and
taxes and licence fees that were a number of quite
separate species. But the genus, such as it was,
into which they fell seems to have been determined
by two features, and I am speaking about the term
broadly.
One feature was that in England they were

taxes, et cetera, which had been administered by
the persons having the responsibility for the
administration of excise duties proper, as we would
call them; the other being that they were inland
taxes, that is, they were not duties on the import
or export of goods.

What we will seek to demonstrate,

Your Honours, is that whilst that might have been
the broad meaning of "excise", particularly
overseas, the term was used in the Constitution in
a significantly narrower sense, and the narrower
sense in which it was used was that in which it was
already used by the Australian legislatures of the
time. That was as being a duty imposed on the
manufacturer or producer of goods in the
jurisdiction imposing the duties.

McHUGH J:

If you adopt that test it means that it is all a

matter of form, does it not? I mean, the States
could just evade the prohibition by imposing a tax

one level down the chain.

MR JACKSON:

Could I say, with respect, that is not quite

right. What I seek to say is really two things.
The way in which we would put it is that of its
nature a duty of excise for the purposes of
section 90 is a duty which is imposed on particular
people, that is, the producer or manufacturer of
goods. That is the essential nature of it, and
because of that, the range of taxes that fall
within the concept inevitably are to be determined
by a question which involves an element of form if one describes "form" as meaning the identification
of the person on whom the tax falls. That
undoubtedly reduces the extent to which one can
say, "Well, the whole thing is a question of
substance and you look at what it does and see what
distils from the boiling beaker".

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Your Honour, there is, however, yet a question of substance which remains in it.

The tax has to
be of that kind for it to be a duty of excise, but
it may be the duties that are imposed on persons
who are producers or manufacturers are not
expressed in such a way as to make it apparent that
they are duties which are duties of excise, but in substance, if I can use that expression, they are. So there is an area where one looks at the
substance - - -

DAWSON J:

Can you give an example? For instance, where a

sales tax was imposed upon locally manufactured
goods, you would say that is directed at production
and manufacturing?

MR JACKSON:

Yes. example, a large levy was imposed on someone who

Your Honour, circumstances where, for

was a producer - Hematite, for example. A case of
the nature of Hematite might well be one that one
sees a tax imposed on a person who is a producer
and manufacturer, but not expressed in a way that
would rely on that as a criterion.

McHUGH J: Well, what about a pay roll tax affecting

producers and manufacturers?

MR JACKSON:

Your Honour, I do not wish not to answer, but

it just depends a bit - if Your Honour puts it that
one takes a pay roll tax that was expressed to be
only - - -

McHUGH J:	On manufacturers.
MR JACKSON:	Yes, Your Honour, it may well be a duty of

excise.

MASON CJ:

What is the point of so confining the prohibition?

MR JACKSON:

Could I say two things about that.

The first

is this - and it really leads me on to what I was
about to say next, as it were - that -

MASON CJ:. Well, ignore my question and just continue.

MR JACKSON:

I would not very willingly do that.

I would

hope not to do so very obviously. Your Honour,
could I say this, that the reason for it being
necessary to be able to identify what laws fall
within the description of duties of excise comes

from a number of things. The first is this, that
one sees that in terms of section 90, for example,
it said, in its second paragraph, that:
On the imposition of uniform duties of customs
all laws of the several States imposing duties

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of customs or of excise ..... shall cease to
have effect -
and fees which would fit within the broader description of duties of excise but not within the
and the laws of the colonies, at the time of taxes
narrower ones. It was essential to have a
conception of - I will come to the detail of that a
little later - a duty of excise which was one which
enabled identification of the laws and parts of
laws which were to cease to have effect immediately
upon Federation. That is the first thing.
The second thing was this, Your Honours, that

the terms of section 90, of course, are that
section 90 is not a grant of power, it is a
provision which is a denial to the States of
legislative power, and it denies to the States a
species of legislative power, namely the power to
tax, which lies, in a sense, at the heart of the
powers of the polity. And, Your Honours, every
consideration of convenience, we would submit,
using "convenience" in the context which I have
just mentioned, would suggest that the meaning to
be given to such a term should be both clear and,

we would submit, fixed. And, Your Honours, it
should possess those characteristics because it is
a denial of power.
Your Honours, in that regard, we would submit

that the observations of Your Honour the
Chief Justice in Attorney-General (Viet); Ex Parte
Black v The Commonwealth, (1981) 146 CLR 559 at
page 614, are germane. Your Honour there drew a distinction between a grant of legislative power
and a denial of it and, at the bottom of page 614,
Your Honour said:

Although in some circumstances it is
permissible to construe a grant of legislative
power so as to apply it to things and events
corning into existence and unforeseen at the
time of the making of the Constitution, so
that the operation of the relevant grant of
power in the Constitution enlarges or expands,
a constitutional prohibition must be applied
in accordance with the meaning which it had in
1900. As a prohibition is a restriction on
the exercise of power there is no reason for
enlarging its scope of operation beyond the
mischief to which it was directed ascertained
in accordance with the meaning of the
prohibition at the time when the Constitution
was enacted.

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And then Your Honour went on to deal with the
particular prohibition.
Your Honours, I do not wish to suggest that

the observations that Your Honour made there were
directed to the particular case, of course, nor
that they might not have a different application in
respect of particular prohibitions but, in our
submission, they are apposite to a prohibition such

as that which is found in section 90. They are
apposite because section 90 does no more in terms
than to deny to the States a legislative power, and
every reason of convenience, we would submit, would
submit that the meaning of that term should be
fixed and clear.
Your Honour Justice Dawson referred also to

terms maintaining their meaning in Street v Bar
Association of Queensland, (1989) 168 CLR 461 at
page 538. It is a passage that I suppose really
commences at the bottom of page 537, about point 8,
and goes through to page 538, about point 9.
Your Honour said at about point 3 on page 538:
What matters more than the terminology is

the principle which lies behind it and that
has never been doubted. It is that the limits
within which a constitutional prescription
operates do not change, however much changing
circumstances may allow it to be applied to
new situations.

Your Honours, I now have 10 copies of the final
report of the Constitutional Commission. Perhaps I

can hand those to Your Honours. I do not propose
to refer to them immediately, although I will come
back to one passage a little later.
Your Honours, the third matter we would wish

to mention is this, that the need to have a clear
identification of what are duties of excise derives

not only from section 90, but of course in a
slightly different context appears in section 55
where Commonwealth duties which satisfy the test
must be dealt with parliamentarily in a particular
way. It is necessary to separate out laws which
impose duties of excise.
I mentioned in answer to Your Honour

Justice McHugh a moment ago that in order to
determine what is the substance for which one is
looking, one has to see what is the matter one is

seeking to identify. Your Honours, that is
referred to by Your Honour Justice Dawson in Philip

Morris, 167 CLR 473, about point 2. Your Honour
there said, we would submit correctly, that a
criticism about the criterion of liability test:

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has force if it is possible to identify the
substance which ought to prevail.
Now, Your Honours, could I turn then to the
next matter with which I wish to deal and it is
this: it is that we would say that one of the
matters that supports the notion that the term
"duty of excise" had the meaning for which we
contend, was the usage clearly attributed to the
term in the laws of the colonies immediately prior
to Federation and there was - when the term "duty
of excise" was used, it was a term that was used to
apply to duties on the producer or manufacturer of
goods within the jurisdiction. And, Your Honours,
it is a case where it is used for that purpose and
only for that purpose and whatever might have been
the possible wider view of the term, in popular
usage or in political usage, when one came to
expressions such as laws imposing duties of excise,
the legislative usage was clear, as were the laws
that satisfied that test that came to an end by the
operation of the second paragraph of section 90.
Now, Your Honours, have been given a bundle of

legislation. May I go first to the legislation of

New South Wales. We have given you the legislation
of the various colonies. Your Honours will also
have, in a sense for later reference, a document
which contains a short summary of the relevant
provisions to which I am about to refer. Could I
speak first of all about New South Wales? First of
all in relation to tobacco. The relevant enactment

was the Tobacco Act of 1884. By section 4 of that
Act it imposed on tobacco manufactured in any
tobacco factory licensed under this Act duties
which the Act described as being "excise duties"
and Your Honours will see in section 4 that it used
the expression "the excise duties following" and it
seems clear from the terms of the Act, and I would

refer particularly to sections 2, 3 and 13 of the
Act, that it was referring, hardly surprisingly, to tobacco manufactured in New South Wales.
Your Honours, the excise duty contemplated by

the provision was calculated by reference to the

quantity of tobacco manufactured. The Act however
imposed also other fees. First there was:
an annual fee ..... payable by the proprietor or
occupier of every licensed tobacco factory -

That was provided for by section 5, and
Your Honours will see that it was, in 1884, not a
light fee; it was an annual fee not to exceed two
hundred and fifty pounds as the licence fee for
having a tobacco factory. There was also a licence
fee for the right to sell tobacco and Your Honours

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will see that in section 7, and that was a
relatively small fee, but there was a fee for the

right to sell tobacco by any person. But the fees
other than the duty of excise, described as such in
section 4, were not described as duties of excise.
The usage of the term "excise duty" was

continued by section 1 of the Act which immediately
followed, which was the Act increasing the duty,
that is the 1887 Act, and that Act described the
duty as:
an excise duty upon tobacco manufactured.

Your Honours, that was tobacco. So far as beer was
concerned, a duty, again described as an "excise
duty", was imposed by the Beer Duty Act of 1887, on
the brewers of all beer brewed within
New South Wales and sold or removed for consumption
at a rate of, I think, threepence per gallon.
Your Honours will see that in section 7 of the Act
and you will see that duty described in the section
itself, at the bottom of the page, as being an
"excise duty of threepence per gallon" and the long
title to the Act, described it as being an Act for
the imposition of an excise duty on beer in New
South Wales.
Your Honours, in relation to spirits, the relevant Act was the Spirit Duties Act 1847 and
section 1 of that Act imposed duties on spirits
distilled in New South Wales at a particular rate

per gallon distilled. Your Honours will see, in
the old form of drafting of Acts, the first section
immediately joins on the preamble and it is about
half-way through that.
Now, the rate of duty was altered on a number

of occasions through to 1887. The duty was not in
the Acts which imposed it, described by name as an

excise duty, but it was recognized as being such,
or being of that character, by the Act which was
brought into force in preparation for Federation.
That was the Excise Reduction Act 1900.
And the Excise Reduction Act in section 2,
referred to reducing:
the excise duties then payable -

on, amongst other things -
spirits manufactured ..... in New South Wales -

and Your Honours will see the short title and the

long title to the Act. Your Honours, that was the
position in New South Wales. In Victoria - - -

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BRENNAN J:

Mr Jackson, before you leave that, I notice that

in some of those Acts there is a reference to what
I take to be the point of imposition of the taxes

being on entry for home consumption. Does that
have anything to say as to the nature of the tax?

MR JACKSON: Well, not really, Your Honour.

BRENNAN J: It is the same term as is used in Customs

legislation.

MR JACKSON:

Yes.

Your Honour, the same term, with respect,

is used in - one sees in Commonwealth excise
legislation too, I think. It is in one of imposing
duties strictly, and - - -

BRENNAN J: Yes.

MR JACKSON:

Your Honour, what often tended to be the case,

one sees, is that the duty was not payable on goods

that were to be exported from the State. So that
not all goods - I am sorry, I am putting it very
badly. What I am seeking to say is this: the
excise duty was a duty on goods that were produced
or manufactured in the State. Not all such goods
were the subject of the particular duties, because
the duty was intended to apply to those that were
to be consumed in the State.
Now, Your Honour, no doubt it was a case where

the power was not,in effect, exhausted, although I
appreciate I am talking on a slightly different
topic. But the type of duty was one imposed on
goods that were manufactured for home consumption.

BRENNAN J: Really, I suppose, the point of my question was,

if you have customs duties being expressed as being
payable on the importation of goods, and they are
payable on entry for home consumption, and you have

excise duties imposed in the same terms, then have
you exhausted the duties which are exigible with respect to goods intended for consumption within the jurisdiction?

MR JACKSON:

Your Honour, if one is talking about customs

duty the answer is probably yes, if one leaves

aside exemptions, but generally speaking, yes. One
has to bear in mind, of course, that one is not
affecting the ambit of Commonwealth power in the
context in which the issue arises.

BRENNAN J: It is only a matter of understanding, as I

understand your argument at the moment, what was
the meaning of "excise" at the time of Federation.

MR JACKSON:

Yes.

Now, could I move then to Victoria.

The

relevant enactment - - -

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MASON CJ:

Mr Jackson, I do not know whether it is necessary

for us to go through all these in detail. We have
your summary and you are going to provide us with
the appropriate legislation.

MR JACKSON:

Your Honours have the legislation and the

summary to it. I had gone to New South Wales to
demonstrate what seemed to be the broader scope of
it, and I did not intend to go through them one by
one.

MASON CJ:

I thought as we had been through New South Wales

in a little detail that would be sufficient,
together with your summary, and if we wanted to we
could check the other legislation.

MR JACKSON:

Your Honour, the point that we seek to make

from them is that if one looks at them, one does
see the constant use, and indeed the only use of
the term "excise duties" or "duties of excise" in
the statutes, of the colonies as being duties of
the kind to which I have referred, that is, duties
imposed on the producer or manufacturer of goods in
respect of goods produced or manufactured within
the jurisdiction. One does see in the various
enactments there being, and indeed by the same
enactment in many cases, fees imposed upon
producers and manufacturers which are fees which

are described as licence fees or other fees. One
sees duties or taxes being imposed upon persons
other than the producer or manufacturer, but
imposed at the same time in respect of - to use the
term if I may - in respect of goods. But,
Your Honours, none of those things other than the
first class of duty to which I referred was
described as being a duty of excise.
It is interesting to note as one looks through

the statutes that in respect of the various
statutes when one sees the term "excise duty" used

capital D, as obviously something that was regarded it is very often set out in the heading, capital E, as having a common parliamentary and legislative
meaning at the time in Australia.
Could I refer Your Honours also to the next

aspect to which I would go, and that is, that the
view that "excise" had a meaning of that kind was
referred to also in the views of contemporary
writers who had been concerned with the

Constitution. Your Honours have been referred
already, I think, to a part of Quick and Garran in
"Annotated Constitution of the Australian
Commonwealth", at pages 837 to 838, there dealing
with section 90. But there is also, Your Honours,
a further observation on the topic at page 854 when
dealing with section 92. At the bottom of page

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854, under the heading "Excise Duties",
Your Honours will see, particularly, at about point
8 or 9 on the page, the authors say:
In our notes to section 90 the various
meanings of "excise" have been referred to,
the first and original one being that in which

it was restricted to duties on the manufacture
and production of commodities in the State,
whilst in another sense it has been extended
to cover a host of additional imposts such as

licences and so on. The bulk of authorities
in favour of the limited connotation of the
term, and if that view be correct the States
of the Commonwealth will retain -

et cetera.
Your Honours, also, in Inglis Clarke, who had been at, I think, the 1891 convention, referred in
his "Studies in Constitutional Law", 1905 at
page 185 - I understand Your Honours do not have
copies of that, and we will arrange for some to be
given to Your Honours - but in the first new
paragraph on page 185 where, after referring to the
fact that the word "excise" had been used in
English legislation to cover many varieties of
taxation, then referred without any adverse comment
to the decision of the Court in Peterswald v
Bartley.
Your Honours, could I come then to the terms

of the Constitution itself and what we would submit
is that the terms of it which refer to duties of
excise are most consonant, we would submit, with
the interpretation for which we contend than with a
rather wider view.
Your Honours, going first to section 51,

duties of excise, of course, and customs, are
within the power under section 51(ii) but,
Your Honours, it is unnecessary, for the purposes
of that provision, to identify specifically any

more about them. When one comes to section 55, of
course, the need to be able to identify them as
such becomes apparent and, Your Honours, it is a
condition of validity that one would be able to
identify what is a law which is a duty of excise.
The next provision which touches the issues is

section 69 which provided, in its last paragraph,
that:
the departments of customs and excise in each
State shall become transferred to the
Commonwealth on its establishment.

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Your Honours, that expression, "the departments of
customs and excise", is one which, I suppose, could
have comprehended, really, one of two things, one
being, whatever was the department that had the
name "customs and excise" in any State, whatever
may be the subject-matter that it administered; the
other being that it was the departments or the
members of those departments, to the extent to
which they administered laws imposing duties of
customs and duties of excise.
Your Honours, there is a note which I can give

Your Honours in the first edition of
Harrison Moore, The Constitution of the
Commonwealth, 1902, in which, at page 195, having
referred to section 69, he says in note 1 on that
page:
It should, of course, be understood that
nothing more is transferred than what relates

to customs, excise, and bounties. The Customs
Acts of the Colonies and the Departments of Customs deal with many matters which are quite outside duties of customs; these things, and executive and legislative powers of the States
over them, are of course unaffected.

Your Honours, it is the note at the bottom of the
first page of text I have given Your Honours.
Your Honours, similarly, we would submit, when one
comes to section 85(i), one sees what property of
the State passed to the Commonwealth.
Your Honours, in sections 86 and 87, one sees again the need to be able to identify what laws
satisfied the test of being duties of customs and
excise at the time of Federation and, Your Honours,
one had to look to see, for example, what was the
net revenue from such duties.

Your Honours, if one goes then to section 90

itself, there are several features that may be

noted about it. One is - which I have mentioned
already - its terms, or the terms of the second
paragraph of it, made it essential that it be
possible at the time when uniform duties came into
force to identify or to be able to identify exactly
which laws satisfied the description of "laws of a
State imposing duties of excise".
Your Honours, the second feature is that the context in which the reference to duties of excise
is found is one which is a context of production,
import and export - and I would refer Your Honours

to the words of the two paragraphs. In section 93
one sees the term, the meaning of the term "duties
of excise", finding a practical expression, we

Capital(4) 116 21/4/93
would submit. That is, "duties of excise paid on
goods produced or manufactured in a State".
Your Honours, section 93 proceeds to determine

which States shall have the benefit of them in the
accounting which is required by the combined effect

of sections 93(ii) and 89. We would invite
Your Honours to note particularly in section 93(i)
the use of the expression "and afterwards", and it
seems to be contemplating that there will be:
duties of excise paid on goods produced or
manufactured in the State and afterwards
passing into another State for consumption -

It is possible, of course, to say that one view of it is that the term "and afterwards" is
simply looking to the question whether the passing
into another State happens, of course as it
inevitably would have to happen, after production

or manufacture. It seems to add very little to it.
What seems to be contemplated is the broad concept that goods will be produced or manufactured in one
State for the operation of the provision, there will be duties of excise paid in that State and
then the question is which of the States will have
the benefit of it, and it is the State where the
consumption is going to take place.
What we would say then is that if one looks at

the earlier decisions on section 90 they confirm,
we would submit with respect, that the provision at
Federation had the meaning for which we contend.
May I take Your Honours first, and I will endeavour
to do so as briefly as I can, to Peterswald v
Bartley, (1904) 1 CLR 497.

BRENNAN J:

Mr Jackson, before you go to that, if you pardon

my delaying you, there is an ambiguity, is there

not, in speaking about duties of excise in this
sense that, prior to Federation, what would now be
Commonwealth duties of excise were then State
duties of customs. Goods that were manufactured in
one State and imported into another for consumption
within the latter State were dealt with as imported

goods subject to customs duty. When section 93,
for example, is speaking of duties of customs
charge and so forth, and duties of excise paid,
there it seems to suggest that they are speaking
about goods which are produced out of the State and
goods which are produced in the State.

MR JACKSON:

The "duties of customs" seems to be goods

imported into a State, probably from overseas,
Your Honour.

BRENNAN J:

Maybe from overseas, maybe from another State.

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MR JACKSON: It is possible, yes, Your Honour.

BRENNAN J:

So that when we are speaking about duties of

excise in the sense of what was abolished at
Federation - - -

MR JACKSON:

I am sorry, Your Honour, might

I say something.

It would seem likely, if one looks at section 93,
it applies after the imposition of uniform duties
of customs.

BRENNAN J: Yes, which were external to the Australian

mainland.

MR JACKSON:

Yes, because of section 92, amongst other

things.

BRENNAN J: Because of?

MR JACKSON:

Your Honour, one would have section 92, for

example. I am sorry, I am not putting it
very - - -

BRENNAN J: Is the imposition of duties of customs

impositioned by the Commonwealth, is it not, of
duties of customs into Australia?

MR JACKSON:	Yes, Your Honour.
BRENNAN J:	Then what is cut out are all border duties of

customs and State duties of excise on productions
within the State.

MR JACKSON:

Yes.

BRENNAN J: Are you construing "duties of excise" in

section 90 in the same way as 93(i), that is duties
on goods manufactured within the State?

MR JACKSON:

I am referring, Your Honour, to duties of excise. What I am doing with section 93(i) is

seeking to say that the usage of the term "duties
of excise paid on goods produced or manufactured in
a State" reflects the meaning of the term "duties

of excise". Your Honour, that is what I am seeking
to do with it, and to say that when one is talking
about a duty of excise, one is talking about a duty
which is imposed on the producer or manufacturer.
That is what I am seeking to do with it; nothing
really any more than that.
So what I am saying about it is that it does

reflect what we would put as the understanding of
the concept of a duty of excise at the time of
Federation. Could I just say something more in
relation to it - not in relation to what
Your Honour put to me, but one of our learned

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friends yesterday said of course you take no

account of it because its operation is spent. No

doubt. As a matter of history its operation is now
spent, but if one looks to the Constitution to try
to find some guidance as to the meaning of the term
"duty of excise", it is the place that does provide
some.
Your Honours, I was about to move to

Peterswald v Bartley, (1904) 1 CLR 497. The nature
of the case appears at the bottom of 497 and the
top of 498. Bartley had been charged with carrying
on business as a brewer without a licence under the

State Liquor Act. You will see at the top of the
page he said that the State Liquor Act provision
requiring brewers to be licensed had not survived
the corning into operation of section 90.
Your Honours, the discussion of the point with

which the Court is presently concerned commences at
page 505. At about point 7 on the page,
Your Honours will see that Chief Justice Griffith,
who was delivering the reasons of the Court, said:
The real question is whether such a licence
fee is a duty of excise -

He referred to the term "duties of excise" being

used in several sections of the Constitution. May
I invite Your Honours to read the remainder of that
page through to about half-way down page 506.
Your Honours will see half-way down 506 that
His Honour says:
The first thing that occurs to one on reading the words "duties of excise" in section 93, is that they are qualified by the addition of the
words "paid on goods produced or manufactured
in a State." There the term is evidently

stated, and is not used in the larger sense -
limited to duties of excise in the sense

and he referred then in the next sentence to the
fact that the supreme court had held and included
the larger range of things.
Now, throughout the remainder of that page and

at the top of the next page, His Honour dealt with
an example of the English statutes relating to
licences and then, at page 507 at about point 3 on
the page, said:
Of course, the consequences of such a decision are very various, for, if it is correct, the
power to impose licence fees on publicans, for
instance, has passed to the Commonwealth, as well as a large number of other fees, which,

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up to this time, have been thought to be
within the power of the State to impose.
Now, His Honour then looked at the provisions of
the Constitution and, Your Honours, could I just say that in relation to His Honour's observation
there, what is being suggested is that the decision
is in some way infected - perhaps that overstates
the word - by the pre-Engineer's case doctrines,
but could I just say, Your Honours, that the
observations made by His Honour at page 507 in the
paragraph commencing about the middle of the page,
do not seem very different at all from the
observations of all the members of the Court in,
for example, Seamen's Union of Australia v Utah
Development, which is a decision of a much later
page, to which I will take Your Honours shortly.
Now, His Honour then, at the bottom of the

page, said:
Now the term "duties of excise" does not

appear to have been used in the larger sense
in any of the legislative instruments cited
before us except in certain English Statutes.

Your Honours, could I just pause at that point to
say that in Philip Morris, at page 427, Your Honour
the Chief Justice referred to the fact that the
instruments were not identified by His Honour.
Your Honour, what we have done is to give the Court
what appear to be all the instances in which the
term "duties of excise" was used in statutes in the
various colonies in Australia prior to Federation.
His Honour at the bottom of the page goes on

to say that:
The word "excise" is, however, often used in

America -

with the larger meaning. And then he goes on to
say:
What then does the term "duties of excise"
mean in the Constitution -

He then quotes Quick and Garran at pages 837 and
838, dealing with the various meanings, and then
says at the top of page 509, about the third line:
That is, as far as we know, a correct

the term in England. With respect to the

historical statement of the use and growth of take notice of the sense in which it has been

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understood and used in the legislation of the
various States.
Now, Your Honours will see throughout that
paragraph - and, Your Honours, I will not read it
out - the view expressed that the word "excise" had
a distinct meaning in the popular mind, which, when
used in the Constitution, was used in connection
with the words "on goods produced or manufactured",
the conclusion is almost inevitable, and
Your Honours will see what he there refers to.
Now, Your Honours, at the start of the next paragraph and going to the third line on the top of
page 510, Your Honours will see that it is
recognized that there may be cases in which there
are taxes imposed which, in substance, can be
duties of excise, and Your Honours will see, at the
top of page 510:
it is important to consider, first of all,
what is the substance.

And that is a proposition similar to that advanced
by Your Honour Justice Dawson in the passage to
which I referred earlier.
Now, Your Honours will see also, half-way down

page 510, a reference to:
if a particular industry is one which exists
only by the permission of the State, the
forbidding of the carrying on of that industry
in that State is within the power of its
legislature, and they may impose upon it any
condition or restriction they think fit.

Now, Your Honours, one has to bear in mind, if one

is talking about any overall purpose, that there
are restrictions on the ability of the Commonwealth
to prohibit - I am sorry, I am putting it badly.
If one is looking at the position of the
Constitution with a view to endeavouring to find
some larger operation for section 90, one has to
bear in mind that both then and now it is possible
for the States to engage in a wide variety of
conduct which has the effect of inhibiting or
promoting the development of particular goods,
their manufacture and production. And,
Your Honours, the observation there made is not
very different from those made by the Court in the
Seamen's Union case, to which I will come.
If one goes then to page 512, Your Honours

will see, in the penultimate paragraph on the page,
His Honour refers to the:

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Rejecting, then, the larger view as to the meaning of the term "duties of excise".
Your Honours, could I just say, in relation to
that case, that it was one which was decided very
shortly after Federation and if one is looking to
see what the meaning of the term "duty of excise"
was then, we would submit it provides a very good
guide and it is one which reflects the legislative
usage.
Your Honours, could I also say that the notion

that States could not impose duties on goods at
stages after production of the goods does also seem
inconsistent with some dicta - admittedly dicta in
passing - of Justice Barton in Fox v Robbins,

8 CLR 115. The particular passage is a very brief
one, at the bottom of page 123 and the top of

page 124. Fox v Robbins, of course, is dealing
with section 92, but what His Honour said was this:
I must not for a moment be taken to cast

any doubt on the capacity of a State to tax,
together with its own products, goods produced
in other States, when brought into it for sale
or consumption. When the inter-state transit
is over and they have become part of the mass
of property within the State, any goods may be
taxed, no matter whence they have come. But -

and then he is referring to section 92 -

they must be taxed alike with all other such
goods in the State.
So His Honour specifically says he does not cast any doubt on the capacity of a State to tax goods
produced in other States, and he is speaking of
goods at a stage after production.

Your Honours, in The Commonwealth v South

Australia, (1926) 38 CLR 408, one sees a similar
approach, we would submit, being taken and,
Your Honours, I want to refer briefly to what was
said by Chief Justice Knox but also to some
observations of Justice Isaacs because,
Your Honours, one would have thought -
The Commonwealth v South Australia was a case
decided after the Engineer's case, and one would
have thought that if anyone was to raise some
observation about Peterswald v Bartley having been
affected by notions of the State reserve powers,
that Justice Isaacs would have done so.
Your Honours, could I go first to

Chief Justice Knox at page 419. At the bottom of
the page in the paragraph five lines from the

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bottom, he refers to the nature of the tax and
says:
In the ordinary course of events the first
seller ..... is the producer.

He refers to that again at the top of the next page
and goes on to say in the third and fourth lines:
In my opinion, such a tax is a duty of excise
within the meaning of the Constitution.

He refers to the usage of the term "duties of excise" in legislation prior to Federation.
Your Honours will see at about point 4, referring to such duties he says they were:
distinct from the annual licence fee ..... They
were payable on all tobacco manufactured in
Victoria on being entered for home
consumption, no duty being chargeable in
respect of tobacco exported.

At the bottom of the page he refers to Peterswald v

Bartley and he held it was a duty of excise. Then
if one goes from that to Justice Isaacs at
page 425, Your Honours will see under the heading
"Excise Duties" at about point 7 on the page, he
said the question was whether it was an excise
duty.
The Court was asked ..... to say that the view expressed ..... in Peterswald v Bartley was too narrow -

then Your Honours will see at page 426 down to
about point 4 there is a discussion of the wider
view of the term, and then at point 4 he says:

But if in fact unconnected with production and
imposed merely with respect to the sale of the
goods as existing articles of trade and
commerce, independently of the fact of their
local production, a licence or tax -

et cetera. Your Honours will see that he said at
about point 7 on the page:
I agree with the reasoning in Peterswald v
Bartley.

Your Honours, at page 430 at about point 8 on the
page, His Honour said:
The second limb of the definition is also a
contravention of sec 90 of the Constitution,
even on the more limited field of excise

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duties that I adopt. The first sale of motor

spirit ..... is naturally and in the ordinary
course of business a sale by the producer - Your Honours, if one goes from there to page 434 in
Justice Higgins, what one sees commencing in the
first new paragraph on that page is a discussion of
the provisions of the Constitution, and then
Your Honours will see at page 435, about half-way
down the page:
and that for the purpose of sec 90 and our Constitution as a whole, customs duty is a duty on the importation or
exportation ..... whereas excise duty means a duty on the manufacture, production, &c, in the country itself; and it matters not whether
the duty is imposed at the moment of actual
sale or not, or sale and delivery, or
consumption.
That observation is one which in a sense has

led to two possible views. One is that he is
saying, in effect, that the tax which is imposed,
in effect, on the persons engaged in that step,
albeit not producer or manufacturer, is a tax which

is a duty of excise. The other view is that a tax
imposed on a producer or manufacturer, although
imposed by reason of one of the events there

referred to, is the duty of excise. We would
submit the latter view is the better view of what

he was saying. Your Honours will see that he said
at the bottom of the same paragraph:
'

This opinion is quite consistent with the
decision of this Court in Peterswald v
Bartley.

If one goes then to page 438 one sees at the top of

the page Justice Starke, where he said: Duties of excise under the Constitution have
received a definite interpretation from this
Court in Peterswald v Bartley. They are
duties charged upon goods produced or
manufactured within Australia itself.
And Your Honours will see then, at page 439 in the paragraph commencing about point 6, he deals
with a particular case and says it is in respect of
production.
To the same effect is John Fairfax and Sons

Ltd v New South Wales, (1927) 39 CLR 139. At page 141 is the joint judgment of
Chief Justice Knox and Justices Gavan Duffy and
Starke, and then Your Honours will see the

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paragraph at the top of page 142, Their Honours
simply adopt the case to which I have just been
referring and held the duty was a duty of excise,
as, in effect, did Justice Isaacs immediately
following.
If one looks at Justice Higgins at the bottom

of page 144, he seems to move towards a slightly
wider definition of the term "excise", at the top
of page 145, or seems to leave open the question.
Justice Powers at page 146, the first new
paragraph, it was treated as being a tax on the producer, and so on. And Your Honours will see
Justice Rich then at page 146, and you will see in
the fourth line of his reasons for judgment that he
expressed, he says in the earlier case:
I was of the opinion that the expression
"duties of excise" found its way into the
Constitution ..... without any precise
connotation. And I considered that the
expression was not restricted in its
denotation to duties upon or in respect of
goods of local production but comprised inland
duties upon or in respect of goods wherever
produced.

At the top of the next page and the fourth line His
Honour said:
I gather, however, from the opinions of the majority of the Court in the South Australian case, that they hold that the expression "duties of excise" is used in the Constitution
with the restricted meaning.
Your Honours, the last of these cases to which

I wish to refer may be seen in the dissenting
judgment of Justice Fullagar in Dennis Hotels Pty

Ltd v Victoria, 104 CLR 529. Your Honours, His Honour covers a wide field
in his reasons for judgment and may I take
Your Honours first to page 554. At the bottom of
the page he speaks of the nature of duties of
custom~ and excise and speaks of the fact, at the
top of page 555, that:
the meaning of the term "duty of excise" is
not so well established.

But then asks the question, what does it mean in

section 90. Your Honours will see, in the next
paragraph, that he refers to Peterswald v Bartley
and expresses the view that it was correct.

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Your Honours will then see, in the next paragraph, the reference to the provisions of
section 93 of the Constitution and the discussion
of that topic through to the top of the next page.
In the first paragraph on page 556, he attaches importance to:
the nature of the duties of excise in force -

prior to Federation and, Your Honours, the
discussion proceeds, the discussion of previous
cases proceeds through that page and the next, and
at the bottom of page 557, he expresses the view
that the:
duty of excise "must be imposed so as to be a
method of taxing the production or manufacture
of goods".

Now, Your Honours, I will not attempt to go through
detail of His Honour's reasons for judgment, but
essentially he adopts reasoning similar to that in
Peterswald v Bartley.
Could I refer Your Honours also to

Justice Menzies - page 583 through to page 591, in
the reasons for judgment of Justice Menzies.
Now Your Honours, I have gone forward to that,

but it was immediately - I should not say
"immediately afterwards", but the first case which,
in a sense, changed the interpretation of the
nature of duty of excise was Parton v Milk Board,
(1949) 80 CLR 229.
Your Honours, the issue in the case appears at

page 243 in the reasons for judgment of

Chief Justice Latham. Your Honours will see at the
last paragraph on the page - identify the issue as

being: whether a duty imposed in relation to the sale
or distribution, as distinct from the
production or manufacture, of goods is a duty
of excise.
And, Your Honours, it was on that issue that a
majority of three to two held that such an
imposition was a duty of excise for the purposes of
section 90.

Now, Your Honours will see that

Chief Justice Latham adopted the approach which, we

submit, is the correct one. Now, that appears at
page 244, commencing at about point 5, through
page 245. Could I invite Your Honours to note

Capital(4) 126 21/4/93
particularly the expression of view that the word
"excise":
was not intended to comprehend all the taxes
of various kinds -

et cetera. And the reference to Peterswald v
Bartley, and the case in which it was followed, and
then at the bottom of the page, the fact that an
examination of the cases, His Honour says, and we
would submit, accurately, shows that in each of
them a:
tax payable upon the occasion of the sale of a
commodity was held to be a duty of excise
because the tax was a tax payable by the
producer.
Your Honours, at page 246, in the first half

of the page, His Honour refers to the fact that in
respect of goods, duties being duties of excise may
be payable more than once, but the context in which he is referring to it, is saying that goods may be,
in effect, the ingredient of one thing and then
become a new type of goods and may, indeed, become
a new type of goods again, and the duty of excise
payable in respect of each occasion of production

or manufacture. Your Honours, His Honour then
discusses, at the bottom of page 246 and following,
the various decisions and you will see His Honour's
summary at page 247 in the penultimate paragraph on
the page.
Could I move then, Your Honours, to the reasoning of the other member of the minority,
Justice McTiernan, at page 264 and at the top of
the page in the fourth line he set out the issue
and then throughout the page, particularly at about
point 6, referred to the possibly wide meaning of
the "duty of excise" and then on the next page,

having referred to Peterswald v Bartley, says at
about point 7 on the page that:
Section 90 does not restrict the power of

a State legislature to the utmost extent that
the widest meaning of the words "duties of
excise" would allow, but to the extent only
that the object of the section requires.

And he then refers to section 93, Peterswald v
Bartley, and the cases following it. And,
Your Honours, at page 267 at the top of the page,
His Honour refers to the statement of
Justice Higgins in the Motor Spirits' case, which
Your Honours will see there set out, but His Honour
expresses the view, to which I adverted before:

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This means that it matters not if a duty "on
the manufacture, production etc" is imposed
"at the moment of" any of the transactions
which are mentioned.
And it seems clear enough that he is taking the
view that a duty will not be a duty of excise
unless it is imposed, in effect, on the producer or

manufacturer. He sets out the view in the next
paragraph:
The weight of judicial authority favours

the view -

which he there sets out. Now, Your Honours, we
would submit that at the time when that decision
was being given, that was, with respect, undeniably
correct, that the weight of authority did favour
that view and, Your Honours, it is a matter of
particular significance in a case such as this
where - and Your Honour, I will not labour the
point - one is speaking about the question of the
extent to which a legislative power was not to be
granted but was to be denied and, Your Honours, in
those circumstances, the views that had been
expressed in the earlier cases, together with the course of legislative practice at the time of the Constitution, we would submit, led to the
correctness of the view expressed in Peterswald v Bartley, namely, that the taxes contemplated were taxes of a particular, relatively narrowly
expressed, kind and there was not really any very
good reason for changing that view; any very good
reason derived from the words of the Constitution
or the history leading to it.
Your Honours, if one goes to the reasoning of

the majority that led to there being a change, one
sees it first in the reasons for judgment of

Justices Rich and Williams, at page 252, at about

point 4. Your Honours, the critical passage seems
to be this:
But we can see no reason why a levy should not
be a duty of excise within the meaning of s 90
of the Constitution although it is imposed at
some subsequent stage. It must be imposed so
as to be a method of taxing the production or
manufacture of goods, but -

Their Honours say -
the production or manufacture of an article
will be taxed whenever a tax is imposed in
respect of some dealing with the article -

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and I will not read out the remainder of the
sentence.
Their Honours say, as Your Honours will see,

that the tax must be imposed as a method of taxing
the production or manufacture of goods, but they
say that will happen whenever a tax is imposed at
some later point. Your Honours, if one has a tax
that is imposed at some later point, it says
nothing at all about taxing the production or the
manufacture. It says nothing about taxing the
producer or the manufacturer. What it does is to
tax a participant in some later event, whether it
be a vendor or a purchaser. But it does not, in
fact, tax - if one uses Their Honour's expression -

production or manufacture. It may have an effect
upon the levels of production or the levels of
manufacture; may be, may be not, but, Your Honours,
the one thing that it does not do is to tax those
events.
Your Honours, it is, with respect, rather

difficult, we would submit, to endeavour to see
quite what Their Honours were intending to say by
saying that:
but the production or manufacture of an
article will be taxed whenever a tax is
imposed -

on some other transaction and, of its nature, on
some other person.
Your Honours, if one goes then to the reasons

of Mr Justice Dixon at page 259, at the bottom of
the page, His Honour says:
Only if the conception of what is an

excise is limited by the condition that the
tax must be levied on the manufacturer ..... can
I see any escape from the conclusion that the
levy of the contribution is an excise.

Your Honours, until that point the view adopted by
the Court had been that a tax would be of that
kind, would be a duty of excise only if it
satisfied that test. But, Your Honours, the way in
which His Honour then proceeds to set those cases
aside, as it were, appears at page 260 at about
point 3 when he said:
In making the power of the Parliament of the
Commonwealth to impose duties ..... exclusive it
may be assumed that it was intended to give
the Parliament a real control of the taxation
of commodities and to ensure that the

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execution of whatever policy it adopted should
not be hampered or defeated by State action.
Your Honours will see then the remainder of that

paragraph. What was intended by the Constitution,
we would submit, was to give Parliament a control
of the taxation of commodities by doing two things:
making the power of the Parliament in respect of
duties of customs, and the power of the Parliament
in respect of duties of excise exclusive. But it
really does not go, we would submit, beyond that.
Your Honours will see that His Honour makes the
assumption, but the assumption has to derive from
something and if one looks at the history of the
matter, we would submit that what one sees is that
the control was by making exclusive two powers.
Your Honours, that is one side of the coin.

The other side of the coin of course is that the
power to grant bounties was, subject to section 91,
one which was also made exclusive. But all those
provisions are provisions which had to operate, we
would submit, in a context where they did not take
away the only powers of the States to deal with the
general subject-matter.
Your Honours, in that regard may I take

Your Honours to a number of criticisms we would
seek to make of the current test.
Your Honours, the first is that if one treats

the provisions of section 90 and section 91 as
being provisions which were intended to give the
Commonwealth some real control over levels of
production, real control over the economy, real
control over the grant of bounties or however one
cares to put it, one has to bear in mind that they
can only operate in the most imperfect way in that
regard.

May I take Your Honours to the observations of

members of the Court in ae case to which I referred
earlier. That is Seamen's Union of Australia v
Utah Development Co, (1978) 144 CLR 120.
Your Honours, that case was concerned with the
effect of section 91 and the contention that was
advanced on behalf of the plaintiff was that the
various forms of assistance that had been given to
the Utah Development Co were aid within the meaning
of section 91 which did not have the sanction of
the consent of the Houses of the Parliament of the

Commonwealth. But in the course of the reasons for
judgment rejecting that contention, the Court did
two things. The first was to hold that the concept
of aid in section 91 referred to financial aid, but
then proceeded, as I said, to make a number of
observations about the powers of the States.

Capital{4) 130 21/4/93
May I go first, Your Honours, to page 133

where Justice Gibbs, at about point 5, having
referred to.the argument, said:
If this argument is correct the powers of

the States are much more restricted than has
been supposed ever since Federation. It has never been challenged that any State has the power, and some would say the duty, to develop
its resources and its industry subject to such
limits as may be imposed by the existence of
an inconsistent law of the Commonwealth, or by
a specific constitutional prohibition ..... or
by the grant of a power exclusively to the

Commonwealth as in the case of s 90. The
argument now advanced -

which they cite, and then says:
Without that consent, a State could not build
a darn to assist the growing of crops, or a
road or railway to carry goods for export.

I will not read it out, but Your Honours will see a
number of examples given throughout that paragraph.
Then at page 140 Justice Stephen, at about point 6
on the page said:
One may readily reject the notion that the
Australian colonies, when contemplating
federation, would have accepted a federal
compact which prevented their governments, without federal Parliament's consent, from
giving assistance to those engaged in the
production or exportation of goods. Then, as
now, a chief concern of Australian governments
was the development of the economies of their

several communities. Much of their energies
was directed towards measures to encourage
local production by providing developmental

facilities such as -

and Your Honours will see them listed. I invite
Your Honours' attention particularly to the
observation about development being -
directed towards measures to encourage local
production -

and then further on His Honour says:
It was no part of the federal compact that
this vital function of colonial governments,
the development of the economies of their
respective communities, should pass, on
federation, to the Commonwealth.

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And he refers at the bottom of the page to the fact
that -
Australia as a whole should be an area of free trade -

with an -
aim of federation: hence the Commonwealth's
exclusive power.

Then Your Honours will see the observation at the
top of the next page:
But the promotion of free trade between the
States did not also require that the States
should surrender their function of encouraging
otherwise than by direct pecuniary bounties,
the production and export of goods.

Your Honour the Chief Justice with whose reasons
Justice Jacobs agreed, at page 148 was to the same
effect, and may I refer Your Honours to the bottom
of page 148 in the paragraph that goes through the
whole of the first half or so of page 149; then at
page 159 Justice Murphy in the first new paragraph
on the page.
Now, Your Honours, what those passages make

apparent, we would submit, is that the concept that
the control of the economy, for example, is given
to the Commonwealth by section 90 in the cognate
provisions is one which, of its very nature, must
work imperfectly. It leaves out of account, for
example, the power to discourage or encourage
production by quotas on production or manufacture;
by forbidding production or manufacture altogether,
or by various other measures that might be taken in
relation to it.

Your Honours, an observation to that effect

may be seen by Chief Justice Gibbs in Hematite
Petroleum v Victoria, 151 CLR 599 at page 617
where, in the first new paragraph on that page he
said:
On any possible view of its effect, s 90

confers on the Parliament only a very limited
power to control the economy. There are many
taxes which have a tendency to enter into the
price of commodities but which are not
excises, and which are accordingly within the
power of the States to impose.

Then he goes on to refer to a large number of other
ways in which production or manufacture can be

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encouraged or, no doubt, discouraged or prohibited
in particular jurisdictions.
Your Honours, the point of all that, of course, is that it is impossible, we would submit
with respect, to say that one finds, for example, a
very perfect power to control the economy or a very
perfect power to ensure that Commonwealth policies

will not be affected one way or the other in

section 90. What one sees is that section 90 is
the provision which gives the Commonwealth a number
of powers exclusively, but of their nature the
powers are not such that they could effectively and
completely bring about any of the larger designs that one might, on one view, treat section 90 as
having because of the powers of the States that are
unaffected.
Once one also, Your Honours, treats the test -

this is a slightly different matter - as being the
taxes which add indirectly to costs to the consumer are to be treated as being duties of excise, then a whole range of other taxes fall potentially within

the concept. Your Honours, several of them have
been referred to already but may I refer
particularly to items such as taxes on industrial
land. Your Honours will see that referred to by
Justice Murphy in Logan Downs v Queensland.
The point I am seeking to make is this: that

if the test is that taxes which add to costs to the
consumer, in effect, are to be treated as duties of
excise, it becomes very difficult to see why taxes
that have that effect are taxes which are not
potentially within the concept. In that regard,
may I refer to a number that have been referred to

in the decisions? First of all, taxes on
industrial land. That was referred to in a passage
I have given Your Honours already by Justice Murphy

in Logan Downs v Queensland, 137 CLR 59, at page 84, and that was referred to also by Your Honour
Justice Dawson in Philip Morris, 167 CLR at
page 473, about point 7. Payroll taxes were
referred to at the same place.
Secondly all licences to carry on producing or

wholesaling or retailing would seem to be taxes
that would add to the cost to the consumer, and I
would refer in that regard to the observations of
Your Honours Justices Toohey and Gaudron in Philip
Morris, 167 CLR at page 481 point 9, through to

page 482 point 3. Your Honours, a tax on ownership
of factories or on the equipment used in
production, and I give Your Honours a reference to
Logan Downs, 137 CLR 59, at pages 65, about point

5, and 80 point 8 per Justice Jacobs. The first

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being per Justice Gibbs; the second per
Justice Jacobs.
If one takes also a case like Browns Transport

Pty Ltd v Kropp, 100 CLR 117, and adapted the case
to one where a licence fee was required for
vehicles to carry goods then, Your Honours, in
respect of much of the licence fees one would think
that they are fees which would be added to the
price that were carried. And also, of course,
finally, municipal rates, and could I refer in that
regard to Gosford Meats v New South Wales, 155 CLR
368, at page 413 per Your Honour Justice Dawson. Your Honours, the feature too is, we submit,
the extended view of the nature of a duty of excise
touches only part of the issue for the reason to
which I referred in relation to the Seamen's Union
of Australia.
Now, Your Honours, what we would submit is

that if one is seeking to identify an assumed
constitutional purpose, then the observation of
Justice Wilson in Hematite Petroleum, the reference
I will give Your Honours in just a moment, is
correct, namely that the assumed constitutional
purpose can really only be derived from the words
of section 90 itself, and Your Honours will find
that in 151 CLR 648 point 9 through to page 649
point 1.
Now, Your Honours, I wonder if I could go for

a moment to some of the written submissions made on
behalf of our learned friend, the Solicitor-General
for the Commonwealth, and there are a couple of
submissions I wish to make in relation to matters
that are there set out. Your Honours, the first
concerns the submission in paragraphs 2.1 and 2.2
that:

the term "excise" "has never possessed,
whether in popular, political or economic
usage, any certain connotation and had never
received any exact application".

Your Honours, we would submit that is not, with
respect, correct. There was at the time of
Federation an established parliamentary usage of the term as demonstrated by the materials to which
we have referred and that parliamentary usage was
the one that found its way into the Constitution.
The second thing to which I would wish to refer is what appears in paragraph 2.8 of those
submissions, where what is said is that:

Capital(4) 134 21/4/93
the reference in section 90 to "duties of
customs and of excise" covered all existing
forms of taxation of commodities -

and that the intention was that section 90

decprived the Parliament - the intention of
Parliament was to have the same effect for the
future.
Your Honours, if that proposition were

correct, one would expect to see, we would submit,
that section 90 was framed somewhat differently,
namely to refer to all taxes on commodities or all
taxes on goods. It also, Your Honours, if that
were correct, if that were the intention, it just
seems to odd, with respect, that at the first
moment when the issue came before the court after
Federation and very shortly after Federation, there
was no doubt in the Court that the term was not
intended to cover all forms of taxation of
commodities.
Your Honours, the next matter to which I wish

to refer is this that, as Your Honours will see, in
paragraph 2.9, there is a reference to section 93
and a reference to the fact that it is entirely
transitional but, Your Honours, it is transitional
except that it does reflect the understanding of

the time. Your Honours, we would submit, why
enlarge the prohibition after that time?
I wonder if I could pause at this point to raise a matter that my-learned friend, Mr Bennett,
and I thought we should raise at this stage. It

concerns the next case after this. Our juniors in
that case, which has a slight eleemosynary aspect
to it, both are coming to Canberra this afternoon
and we wondered what course the Court might follow
if it were that this case did not finish by lunch
or by the end of tomorrow.

MASON CJ:

How long is it thought the next case will take,

Mr Jackson?

MR JACKSON:

Your Honour, I would expect it would take about

two hours, or perhaps two-and-a-half.

MASON CJ: Well, if this case were to finish by lunch-time

tomorrow we could probably accommodate the next
case.

MR JACKSON:

Yes, Your Honour.

I must say I would have some

doubt about that, with respect.

MASON CJ: What is the current expectation?

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MR JACKSON:

Your Honour, I would expect to take, myself, about another hour.

MASON CJ: Perhaps when we resume at 2.15 counsel could give

some indication, after discussion during the
adjournment, as to how long they think this case
will take, then we can make arrangements for the
disposition of the list later.

MR JACKSON:

Yes.

Would this be a convenient time,

Your Honour?

MASON CJ:

It would be convenient to adjourn now.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

MASON CJ: Yes, Mr Jackson.

MR JACKSON:

Your Honours, the consensus of views was that

this case would take tomorrow and may not finish by
the end of tomorrow.

MASON CJ: Well, in those circumstances, I think we have no

option but to drop Cachia from the list.

MR JACKSON:

Thank you, Your Honour.

Your Honours, might I

move on - I was dealing with making some
submissions in relation to some submissions on

behalf of the Commonwealth. May I say two further
things.

paragraph 2.15 on page 10 where, at the end of the The first concerns an observation at
paragraph, the quotation from Justice Windeyer
saying, in effect, that:
The place where a particular commodity is
produced may determine whether a tax on it is
best called a customs or excise duty; but that
is really unimportant since either is equally
beyond the power of the State (or Territory)".

But, Your Honours, the need for there to be
identification of the ultimate criteria for
deciding which is which arises, of course, in
addition from section 55.
Your Honours, the last particular thing I want

to say about my learned friend's submissions is

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this, that if one turns to paragraphs 3.3 and 3.4
dealing with the question whether excises are
limited to taxes on Australian productions,
Your Honours will see, for example, comments such
as that in 3.2(c) that to confine section 90 would:
involve the Court in every case in an analysis
of the economic incidence of a tax -

and so on. Your Honours, the issue whether
something is a duty of excise really arises in two
possible ways. First, in relation to a
Commonwealth tax, it has to be classified for the
purposes of section 55, the second paragraph. Secondly, in relation to a State or
territorial law, the issue will only arise if the

law is challenged as contravening section 90. And,
Your Honours, there is no reason at all, in our
submission, why the propositions in paragraphs 3.3
and 3.4 that a single tax would be neither, neither
a duty of customs nor a duty of excise is one which
can be supported.
Your Honours, might I turn then to a matter on which I wish to address some submissions arising
from the question Your Honour Justice Brennan put
to me yesterday, and Your Honour was, I think,
referring to a case where a tax was imposed by one
State upon a resident in that State by reference to
that resident's production or manufacture of goods
elsewhere in Australia, and Your Honour asked was
that not a duty of excise, even though the place of
manufacture was not within the jurisdiction. And,
Your Honours, may I seek to make a number of
submissions about it: the first is this, that if
one is looking at the position as at the time of
Federation, and if I could deal with that position first, the prevailing view of colonial legislative
power at that time was very narrow in relation to

extraterritoriality, and by extraterritoriality I do not mean just the operation of statutes on events happening geographically outside the
jurisdiction, but also in relation to the ability
of a colonial legislature to legislate for its
residents, to take that test for a start, in
respect of their participation in events occurring
outside the jurisdiction and, Your Honours, the
doctrine of whatever precisely it may have been, of
Macleod v Attorney-General, ruled the day at that
time.
Now, Your Honours, I mention that in passing.

Your Honours will see, if I could just perhaps give
one reference to a place where Your Honours will
find a discussion of the prevailing views of the
time, and that is in O'Connell, The Doctrine of

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Colonial Extraterritorial Legislative Incompetence,
which is in (1959) 75 Law Quarterly Review 318 at

pages 322 and 324. Your Honours, I mention that
only because in 1900 one would not have
contemplated that such a tax could be imposed and
there was therefore no perceived need to prohibit
its imposition, and we would submit there is no
reason to expand the ambit of a prohibition which
one sees in the Constitution and it does not follow
that every change in the meaning of words or in the
legal situation is one which needs to be resolved
against a State or in favour of the Commonwealth.

BRENNAN J:

I am not quite sure I understand the purpose of

that submission. Are you saying that in the
constitutional theory of 1900, a tax of the kind
postulated would have been outside the legislative
competence of the taxing State?

MR JACKSON:

Your Honour, what I am saying is that that was

the prevailing view of the times, yes.

BRENNAN J: Is there any authority which even suggests that;

that is the imposition of a tax upon a resident was
outside the legislative competence?

MR JACKSON:

Your Honour, what I was going to say was that

if one takes what was the leading case of the time,
which was Macleod v Attorney-General, which of
course was the case where it was held that it can
be ascribed either to a question of, as some would
put it in later times, construction of the statute
or it can be ascribed to a question of legislative
power. Both notions seemed to be involved in the
Privy Council's reasons for judgment. That,of course, was the case where a marriage of a person
resident in New South Wales was held not to be
bigamous because the bigamous ceremony took place
outside New South Wales.

BRENNAN J: That is because crime is always local. What has

it got to do with taxation?

MR JACKSON:

Your Honour, with respect, not all aspects of

crime are always local. A crime can be committed
having elements in a number of places. If I could
put it this way: the particular provision was not
regarded as one which was outside power by reason
of any basis so expressed, with respect, but on a
rather broader basis of the inability of the
Parliament so to legislate.
Your Honour, undoubtedly since then, if one

takes cases such as Johnson v Commissioner of Stamp
Duties and cases in the courts such as the Broken
Hill South case, the ability of a colonial or State
legislature in the days when there was thought to

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be some inhibition on legislative power to tax has
been held to be much wider, and the legislature can
select any fact or event which provides the nexus

with the legislature as the basis for doing it. I
do not suggest otherwise for a moment. All I am
trying to say is that there seemed to be a notion
about at the time of Federation that would prevent
power of this kind being regarded - that treated
power of this kind as non-existing, rightly or
wrongly, but that is what seemed to be the
position.

DAWSON J:

Mr Jackson, you are probably going to answer

this, but why does it matter that you draw a
distinction between goods, provided they are
internal, in a sense, within Australia? Why does it matter whether you say an excise is restricted
to goods produced within the State as opposed to
goods produced anywhere in Australia?

MR JACKSON:

Your Honour, I was going to say at the end of the submissions I am making about this that maybe

in the end it is not a matter of any great
significance but it does matter, I suppose, in the

sense that it may permit some taxes to be imposed

that otherwise could not be imposed as a matter of

legal theory, Your Honour.

As a matter of

practicality, whether they ever would be is another

thing. If one takes a jurisdiction such as one

which has a very small manufacturing or productive
base itself, the goods are almost certain to have

been manufactured somewhere else in any event.

DAWSON J: But to extend it to goods produced anywhere, to

say that if a State imposes a tax on goods wherever
they are produced within Australia, does not really
do anything to the submission that you are putting
forward, does it?

MR JACKSON:

No, Your Honour.

What we would simply say,

though, is we adopt two positions really. The

the end how one does it, whether one looks at it as first is, one, that it does not matter very much in
a matter of practicality or as a matter of
legality. What we were seeking to say was that the
kind of taxes contemplated seemed to have been ones
of the nature at the time of Federation and they
were imposed within the jurisdiction. It may be
the jurisdiction is enlarged for the purpose of
section 90 but, Your Honour, in the end it does not
matter very much.
Your Honours, I was going to say a second

thing is this, that if one goes to the present
situation and if it be assumed that one State were
to seek to impose a tax on a resident of that State
where the tax was calculated on the value of goods

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produced in another State, then on our first
argument, as it were, we will accept the
possibility of such a tax, but for a number of
reasons, both practical and legal, what we would do
is take leave to question the reality of the
prospect of the imposition of such a tax.
Could I deal first with a number of practical

reasons against it. The first is the likelihood of
Commonwealth interference and, Your Honours, as the
Constitutional Commission Report, the final report
at paragraph 11.275 said, the States would remain
the recipients of large federal grants, even if
they had an unlimited power to introduce duties of
excise, and that is a fact that would be borne in
mind, the Commonwealth political power in that
regard.
Secondly, it would be highly unlikely that the imposition of taxation of that kind by one State
would not be followed by the imposition by other
States, or the threat by other States of the
imposition of like taxes, or equating taxes on its

residents. The political pressure to abandon those
forms of taxation would be great.
The third thing would be that the political

pressure and complaint generated, one would think,
by those taxed would be considerable.
And, Your Honours, fourthly, one comes, in a

sense, to a combination of the practical and the
legal. There would be perhaps relatively few cases
in which comparable production or manufacture was
not carried on in the State which was seeking to
impose the tax. It varies, of course, from State
to State, but if there were such production or
manufacture carried on in the State imposing the
tax and the tax did not in terms apply to that
production or manufacture, the tax would almost

inevitably prefer the State and discriminate
against the outside industry for protection for
reasons that would be regarded as being
protectionist. Because, Your Honours, very few
industries that it would be worthwhile to tax would
not carry on interstate trade in those goods.
Your Honours, finally, on this point, if there

were such production in the State and the tax
applied to production in Australia as a whole, the
tax would be invalid as an excise to the extent to
which it applied to production in the State, and
section 92 would apply to the rest of it in similar
situations.
Your Honours, I said I would say something in

relation to the question of the ambit of the

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Commonwealth power to enact legislation dealing
with the ability to tax - I am sorry, I will put it

differently. I said I would say something about
the ability of the Commonwealth, by its
legislation, to prevent there being taxes applied
to goods by States on the assumption that the taxes
were not taxes on production or manufacture but at
a later stage in the chain.
Your Honours, there may clearly be some doubt

as to the ability of the Commonwealth to legislate
in the abstract to prevent the imposition by States
of taxes on goods after production or manufacture

to prevent that in the abstract, but there is no
reason, we would submit, why if some duties have
been imposed by the Commonwealth and, in
particular, if duties of excise, for example, have
been imposed by the Commonwealth, there might not
be Commonwealth legislation preventing the
imposition of State taxes on those goods.
In that regard, if one goes to the terms of the Constitution, it is no doubt convenient to
speak of the power being a power that derives from
section Sl(ii) but, of course, what has happened
with the opening words of section 90 is that once
uniform duties of customs became imposed, then the

Commonwealth's power to impose duties of customs and excise became exclusive. That would seem to
take the power within then section 52(iii) as being
a power to make laws with respect to other matters
declared by the Constitution to be within the
exclusive power of the Parliament.
So what one would be talking about would not

be a situation as occurred in the case of the
Second Uniform Tax Case where the question was
whether a law could say tax payable to the
Commonwealth must be paid before tax payable to the

State, because what one would have would be a
situation of concurrent power.
When one comes to section 52(iii), what it

says, in effect, if one reads it with
section Sl(ii), is that the matter so far as
taxation is concerned which is exclusive, is the
power to make laws imposing duties of customs and
duties of excise.
Your Honours, what we would submit is that if

one has a Commonwealth power to impose duties of
excise and it is that power which is exclusive, and
if one identifies that power as being a power to
make laws with respect to the imposition of duties
on production or manufacture, then part of the
power which is either contained within that or else

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operating by virtue of section Sl(xxxix) is the
power to make that effective.
In a number of cases, of course, members of the Court have referred to that view as providing
the justification for the larger view of the term

"duties of excise". We would submit that its true
role is to provide a justification for the making
of a law which says, for example, in cases where a
duty of excise has been imposed, then in respect of
the goods which are the subject of that duty there
is not to be any State taxation - Your Honours, I
am not attempting to draft the provision - there is
not to be further State taxation in respect of
those goods, because if the object of imposing the
duty of excise is to achieve that, then incidental
to the execution of that power is the enactment of
such a provision.

BRENNAN J:

Why?

Why does the Constitution not do it?

MR JACKSON:

Your Honour, I am assuming for the moment that

the effect of the Constitution is to take up the
notion of duties of excise, the term "excise"
having the meaning to which I referred earlier.
The point with which I was seeking to deal was to
say if that be right it does not follow that it is
not possible to implement situations by
Commonwealth law which prevent there being, for

example, further duties on those goods. I am
seeking to say that there is no especial need to
take a large view of the meaning of the term "duty
of excise" in order to arrive at the conclusion
that one might otherwise seek to obtain.

BRENNAN J: But your proposition is that the Federal

Parliament has power by its Act to control the
legislative powers of the States.

MR JACKSON:

No, Your Honour, I would not say that at all,

with respect. I would not seek to advance a

proposition as large as that. The proposition is
partly true, but I do not put it as largely as
that. If one does put it in that way what it does,
of course, do is carry with it the seeds of its own
destruction.
The point that I am seeking to put is this:

that in respect of a number of powers the
Parliament has power to enact in such a way that
State legislative power may not be exercised in

respect of a particular subject-matter. Now, if
one looks, for example, at perhaps the simplest
case one sees it in the exercise of powers under
Australian Coastal Shipping be legislation which has the effect that a State
section Sl(i), and

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taxing power, for example, cannot be exercised in
respect of a Commonwealth corporation. That is one

thing. It may well be that there are other powers
the exercise of which can have that effect, for
example, the corporations power.
What I am seeking to say is this: that there

are such cases, and one of the cases where that
occurs is in respect of powers that are referred to

in section 52 because, Your Honour, section 52, and
if I could take Your Honour to it for just a
moment, one sees that it refers to the laws with
respect to the seat of government, Commonwealth
places, matters relating to departments, the public
service and so on, and then:
Other matters declared by this Constitution to
be within the exclusive power of the
Parliament.

Your Honours, in respect of each of those matters they are exclusive powers, and in that area when
one is talking about what laws are laws with
respect to, for example, matters incidental to the
execution of a power, it takes on a slightly
different context from the situation that would
obtain in respect of other powers referred to in
section 51 because an element of it is the fact
that it is exclusive.
Now, if one takes duties of excise and adopts

the proposition first that a duty of excise is a
duty, with respect, on the production and
manufacture of the goods in Australia, for example,
and in relation to that says the purpose of that is
to enable the Parliament to have some control over the levels of production, for example, or over the taxing regimes, then there is nothing to prevent
the Parliament saying, we would submit, that in
cases where we have decided to impose a duty of
excise on these goods, a law which prevents there

being any other duty imposed on goods that we have
so selected, is a matter incidental to the
execution of that legislative power. And,
Your Honour, it may well be that if Parliament
says, "These are the goods we have selected and
there shall be no other goods that are the subject of any tariff and that, in respect of those goods,
there is to be no State tax imposed", that
Your Honour, too, we would submit, is within the

power. Your Honour, I do not know that I could
advance it beyond that, but one is in really a
slightly different area under section 52 from the
area obtaining in relation to section 51.
Now, Your Honours, the proposition that there

cannot be legislation, at least in relation to

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section 51 powers, that nakedly says the States
cannot enact legislation of a particular kind, is

referred to in a number of cases. I wonder if I
could just give Your Honours the references to

those. Your Honours, perhaps if I could just give
South case, 65 CLR 413 about point 2, where the point was
Your Honours the pages of the cases:
referred to by Chief Justice Latham; then the
second uniform tax case, 99 CLR 614 about point 8
and 657 about point 3, where Justice Fullagar in
the latter reference refers to the inability to do
it:
by a naked prohibition.

And, Your Honours, in Hematite Petroleum Pty Ltd
v Victoria, 151 CLR, the issue is adverted to at
pages 617, 631 and 639 and, Your Honours, I do not
wish to suggest that in the second of those
references Your Honour the Chief Justice was
expressing any concluded view on the issue, but
Your Honours the cases have not really dealt at all
with a proposition relating to section 52, and in
Gerhardy v Brown, 159 CLR, pages 81.4, 120.8 and
121.1 and the last, Your Honours, is the first Mabo
case, 166 CLR 203 at about point 8.
But, of course, Your Honours, I simply give

those for completeness but, of course, I mentioned
before there are various particular powers under

section 51 in relation to which it would be
possible to make laws having the same effect.
Your Honours, I should also say in the case of the self-governing Territories, there is, of
course, no inhibition on Commonwealth power because
it is simply the power of the Commonwealth to
disallow enactments of the territorial legislature.
Could I give Your Honours a reference to 35(2) of

the Australian Capital Territory (Self-Government)
Act in that regard.
Your Honours, the other matter to which I

should direct Your Honours' attention concerns the question of severance. Your Honours will see that
dealt with in our written submissions and on the
last page of them, Your Honours, section 28 - could
I just say this, Your Honours - there is not a
standard Acts Interpretation Act provision
providing for severance in the Australian Capital
Territory. Perhaps I should say, Your Honours,
there is not yet such an enactment but it may be
that it will not be in the too distant future.
Your Honours, section 28(1) of the (Self-

Government) Act provides that:

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A provision of an enactment has no effect to
the extent that it is inconsistent with a law
defined by subsection (2) -
and such a provision is to:
be taken to be consistent with such a law to
the extent that it is capable of operating
concurrently with that law.

Now, Your Honours, subsection (2) defines a "law"
as meaning:

a law in force in the Territory.

And, Your Honours, what we would simply submit is
that the Constitution is a law which is in force in

the Territory. We have given Your Honours a
reference to State Government Insurance Office (QJ
v Rees where what was said was that, at the
relevant passage, laws both - the provisions
speaking of a law referred to the various laws that
were in force, it was not speaking about the
Constitution.
And, secondly, we would say in any event, if

it is not applicable under the general law, it
would still be a case whether several taxes could
be separated out or the several imposts, however
one chooses to describe them, and in particular,
the basic licence fee of $50 would seem to be quite
separate from the others.

BRENNAN J:	Mr Jackson, what would be the situation, in your submission, with regard to Hematite? Would that be
a tax on production?

MR JACKSON:

Yes, Your Honour.

It is a question on which

views might differ but, in the end, yes.

BRENNAN J: And what about the packaging of bulk goods? Is

that production or manufacture or something else?

MR JACKSON: Well, Your Honour, in the ordinary course of events the packaging, as such - and it depends a

bit on what is meant by packaging but, but could I
just say, if one took something that in one sense
was bulk but in one other sense was not, a packet
of cigarettes, for example, the packing of packets
of cigarettes into cartons of cigarettes and
cartons into larger boxes and boxes into pallets
would not, in our submission, be production or

manufacture. If you go to the stage before that of
putting the cigarettes into the box, 20 or 25 or
whatever the number be into a box, then that would
really, one would think, almost always be carried
on by the person who would be regarded as the

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producer or manufacturer, so that would be part of
production or manufacture.
If one goes to other commodities and if one

took, for example, milk, if bulk milk came in a
tanker and was put from one tanker into smaller
containers, and if that was done as a separate
activity, we would submit that probably would not
be separate production or manufacture because there
is no change in the item itself. In Parton's case,
at page 246 about point 6, Justice Latham referred
to that. But he refers also, in his reasons for judgment in that case, to the fact that once you
get a change from one item or product to another,
because of something being done to it, you can have
a new production.
Your Honour, if one really could take the

example of cigarettes again, if one took the
tobacco leaves and the tobacco leaves are then
dried and ground up or whatever is done to them,

they appear in the form of loose tobacco. Now,
Your Honours, the loose tobacco might be sold in
bulk, it might be sold in small packets or wallets,

or it might be put into cigarettes. The putting
into cigarettes would probably be a separate
production, Your Honour, in respect of which
another tax might be imposed.

BRENNAN J: Could I just ask you one more question: what do you say about a tax on first sale after manufacture

or production?

MR JACKSON:

Your Honour, that itself, in our submission,

would not be excise if one - but unless it be, as
would normally be the case - I am sorry, I am
putting it round the wrong way. Normally speaking,
first sale after production or manufacture would be

by the producer or manufacturer. Commerce would
not really work unless that - - -

BRENNAN J: It depends. If that were a criterion, one can

see that the sales would always be by a subsidiary.

MR JACKSON:

The criterion, we would submit, is the tax

being on the producer or manufacturer.

DAWSON J: What if you had a tax on the first sale of only

goods which were produced in the State; that is,
not upon all goods of that type sold, so that it
could be seen to be aimed at the producer or
manufacturer?

MR JACKSON:

Your Honour, we would submit that a tax of that

kind would not be a duty of excise. If one adopts
the term "aimed at the producer", it becomes very
difficult to draw a line that does not keep moving

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out because then one comes to adopt the test of
saying: is it something that adds to the cost.
Not only does the line move along, but the line

moves out and around as well. I am putting that

badly. We would submit that the test is: is it a
tax on the producer or the manufacturer? It may be
that taxes on the producer or manufacturer do not
in form appear to be duties of excise, but they in
reality are.
Your Honour, I must say I had forgotten in

relation to the issue but two that I was discussing
about the ability of the Commonwealth to legislate
in relation to State power, a case in which I in
fact was in, Botany Municipal Council v Federal
Airports Corporation, (1992) 66 ALJR 821. In the Court's joint judgment at the bottom of page 824,
what was noted was that although the particular
regulations said to be inoperative were nominated,
it was not a case that was aimed at Commonwealth
law.

Your Honours, those are our submissions.
mentioned earlier, we would be adopting some of the
submissions which follow.
As I

MASON CJ: Thank you, Mr Jackson. Mr Solicitor for South

Australia?

MR DOYLE:

If the Court pleases. Your Honours, we provided

an additional short outline in relation to
reconsideration of previous decisions which -

MASON CJ:

You do not intend to be repetitive, do you,

Mr Solicitor?

MR DOYLE:

No, Your Honour, I was not going to elaborate.

want to make a few brief submissions on the matter
but I am really content just to hand that to

Your Honours and leave that particular document at

that. We will, as Your Honours will have seen from
the outline we provided last week, be arguing that the Court should reconsider the meaning of "duties
of excise". In that outline, that is on reopening,
in paragraph 7 we indicated the particular
decisions which we would be arguing were wrongly decided and inevitably in an attempt to be brief, perhaps I have not been quite accurate.
Could I just say in relation to Dennis Hotels

in paragraph 7, for the sake of accuracy it should say, "holding a temporary licence fee payable by a
retailer to be an excise". In relation to
Dickenson's Arcade, again I think to fit in more
accurate with our submissions, "holding a
non-selective consumption tax on tobacco", et
cetera, so I would add the word "non-selective",

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and I will explain later what that means, but I am
just attempting to clarify the point we make there.
In paragraph 8 of that outline, we indicate again
in very short terms the particular lines of
reasoning which we seek to challenge.
Your Honours, obviously the argument we seek

to put will stand or fall on its merits, but I do
want to put some brief submissions as to why the
Court should be willing to set a new direction in

this area. In other words, it is one thing to put
submissions as to a new approach and it is
conceivable that those submissions might have some
attraction, but the Court would still have to
decide whether it would depart from the existing
law.
Our primary submission is, as we have said,

that in 1949 in Parton the Court set the law on a
wrong direction in this area and since then the law
has, to a considerable degree, been following the
wrong course and got into an unsatisfactory state.
The way we would put it, with respect, is the

Court is confronted here by two related issues and
we would submit the first of these is really the
fundamental one and that is whether the current
concept of an excise expressed as it was in Bolton,
which I will simply take as a convenient reference
point, is the correct concept or whether the
concept expressed in Peterswald v Bartley is the
correct one.
The reason why we submit that this is the

fundamental issue is that if this narrower approach
is taken, that is the Peterswald approach, the
franchise cases will lose a lot of their practical
significance and so in a sense the problems they
bring with them and have brought with them will be

resolved at that stage. The franchise cases really
represent a response by the States and one might

say, in a sense, endorsed by the Court, to the
widening notion of excise and the consequent

narrowing of State taxing powers. So the States,
not surprisingly, made use of what seemed a
permissible form of impost.

DAWSON J: Would the same problem remain with a franchise to

manufacture or produce goods?

MR DOYLE:

Yes, Your Honour.

I am not suggesting that the

issue of "is it a tax or is it a licence fee" would
disappear altogether, but in a practical sense our
submission is a lot of the heat would go out of it
if the narrower concept of the excise was the
correct one. Because in a practical sense the
States seeking to tax at the wholesale and retail

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level, there would be no need to resort to that
particular approach to the imposition of taxes if
the narrower approach is the correct one.
That is why, if the Court pleases, we submit

that the primary issue is whether the correct
concept is that espoused in Parton and Bolton and
why, for the purposes of our submissions, we do not

attack the decision in Dennis Hotels. I think
Mr Bennet said that we were arguing that that case and the cases which flow from it should be

reconsidered. That is not our submission. Our
submission is directed to Parton's case and,
indeed, we are arguing that is the fundamental
issue before the Court, whether Parton and Bolton
expressed the right concept or not.
In our respectful submission, to see the issue

in terms of an attack on, or a request for,
reconsideration of the franchise cases is to some
extent to miss the point because, in our
submission, they are really a problem which has
arisen because of the early development in the
meaning of "excise" and that is where, in our

submission, the Court should start. So that is the
first and fundamental issue.
The second issue before the Court, which we

submit is a secondary one, is this: if, contrary
to our submissions, the Parton and the Bolton
concept of the excise stands, then first of all one
has to ask, "Can the franchise cases stand at all?"
And, in our submission, that has been answered and
answered conclusively by Philip Morris, "Yes, they
can."
Then the second issue is, to what extent can

the result in those cases or the reasoning in them
be applied by analogy to other situations as my
learned friend, Mr Jackson, has sought to do here
today, and that is being tested here today.

submission that really is, if the current concept In our
stands, the only issue that is left now for the
Court, and that highlights the point, in our submission, that the issue is not the correctness of the franchise cases, because that has been
resolved; it is simply now the extent to which the
reasoning or the results can be applied by way of
analogy. And I simply make as a caveat to that
proposition that, in the light of what two of
Your Honours said in Philip Morris, it might be
said that Sleigh is under a cloud or, as
Your Honour Justice McHugh said, its grip on life
is tenuous, I think it was. Well, that is a
concession which, for the purpose of this
submission, I make, in the light of what was said
in that judgment.

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So we do submit that first issue is the
critical one and really, the only one before the
Court today, the correctness of Parton and Bolton
and, of course, it is understandable that the other
States should be concerned about - and of course
the State I represent is likewise concerned about -

the loss of existing sources of revenue. The fact
is, no one in this case today is asking the Court
to reconsider the franchise cases, and certainly no
one so far and, as far as we are aware, no one

intends to. And we would also submit that on the
Philip Morris,
approach the Court has taken in the franchise cases if the Parton and Bolton concept
stands, because that is precisely what it did in
Philip Morris, namely, having decided that the
Parton and Bolton concept would stand, the Court
then faced the issue: can that trilogy of cases

stand, and it said yes, it can. And, in our
submission, that is the end of that issue.
In particular, because the Court has said they

state no principle and the Court has been able to
rationalize them - and I use that term with
respect - and the States have been told repeatedly
that they can act on them, then if they state no
principle there is nothing in the existing body of
law which calls for them to be overturned or
reconsidered.
So, in our respectful submission, the issue

before the Court is the correctness of the concept
contained in Parton and Bolton; the issue is not in

any sense the correctness of the decisions in

Dennis Hotels, Dickenson or Sleigh. The only issue
relating to them today is the extent to which the
result or the reasoning can be applied by way of

analogy. Your Honours, that is all I want to put
on the question of reopening.

Before I seek to develop the submissions in

our main outline, could I put some propositions to
the Court in which I run some danger of leaping
ahead into the middle of my argument but, because
the argument involves the consideration of a
moderate amount of historical material, at times it
is easy to lose track of just what are the issues,
and what I wanted to do in brief terms was just to
identify what we submit are some important issues
which are relevant, both to the question of why the
law has developed to the stage it has and,
secondly, to the new approach which we seek to

develop. And while I do not suggest that
everything I put relates to these particular
issues, in our submission, much of what we are
putting does relate to these points and these are
critical points to be determined along the way.

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The first one is whether there was an
Australian meaning for the term "excise" in 1900, and if there was, then in our submission the issue is, "Why would one read the Constitution in any
other sense, in particular why in a wider English
sense?"
The second important issue, in our submission,

is whether the purpose for which section 90 and
related sections was enacted was, as we would
contend, an important but relatively narrow one
which I will try to express in compressed terms,
equality of trade, meaning equal entry into the
State market, that is, entry on equal terms from
another State and then no discriminatory treatment
by way of taxation once the goods are there. That
is equality of trade. Then, secondly, was the
other purpose behind this section tariff policy,
and again we would stress, in the sense of
ensuring, the ability of the Commonwealth to decide
whether there should be any and what differential
between local goods and imported goods; or to put
it a little differently but expressing the same
sense - - -

McHUGH J: What sense do you use the word "imported"?

Imported from overseas or imported from other
States?

MR DOYLE:

There I was using it in the sense of imported

from overseas because in my equality of trade sense
when I referred to treatment on equal terms once
you are within the State, I was referring there to
any attempt to discriminate against goods which
have come from another State.

McHUGH J:

Mr Solicitor, perhaps because of the

interpretation which formerly prevailed about
section 92, there has been a tendency to think of
the rationale behind the exclusive conferring on
the Commonwealth with a power to impose duties of

excise. But perhaps it helps you to understand the
purpose of the provision better if you think of it
as a compound conception, duties of customs and
excise; and customs in 1900 covered not only

customs at ports but also as at the border. So
that section 90 in a sense could be said to be
directed not only at goods coming into a State by
sea but from other States, and at the same time it
gives the Commonwealth exclusive power over

excises, and then also over bounties. Now, in that
wide power over the taxing of commodities in
context, does it not seem to suggest that the very
any particular State?

Capital(4)	151	21/4/93
MR DOYLE:	Not in our respectful submission. submission, when you look to the Convention Debates	In our

to try to understand what was the purpose, assuming
it is permissible to move beyond the bare text of
the Constitution, what you find are two constant
themes: equality of trade, which I just touched
on, that is, that your goods can come from one
State to another without being faced by burdens at
the border, and that when they are within the State

they will not be taxed on a selective basis. I am

talking only of section 90. I am ignoring
section 92 which reaches at wider things.
Then secondly, Commonwealth tariff policy

which consistently through the debates is expressed
as whether the tariff will be protectionist or free
trade, which is inherently the concept of
differentiating in the tariff between imported and
local items; but also, we would acknowledge linked
to that, the selective placing of imposts on local
production. In other words, it is not wholly and
solely differential tariffs because to tax item X
which is just produced in Australia would be an
excise, we would accept, even though there is no
imported item X.
But we submit that it is actually in a sense

logically flawed to reason that because the
Commonwealth is given exclusive power in relation
to customs, excise and bounties, to say that means
exclusive power in relation to the taxation of
goods, because what stares one in the face is that, pursuant to a purpose which is to be identified, we
would submit, from the debates because it cannot be
clearly distilled from the Constitution itself,
certain forms of taxation and certain forms of
payment were withdrawn from State powers, and the
certain forms were customs, excise and the payment
bounties. And when one looks to see in 1900 what
those terms meant, it is relatively easy to

understand what "customs" meant, and what one finds
is that "excise" meant a duty on a producer in
respect of local production, and then, of course,
there were bounties.
We submit that both Australian usage and a

proper understanding of the purpose behind
section 90 support the conclusion that customs,
excise and bounties are used in a reasonably well
defined sense and, in particular, excise is used as
meaning selective burdens on local production; the
word "selective" there indicating singling local
production out, most commonly in relation to
imported production of goods, but not necessarily

in relation to imports. Now that is a rather long
answer to Your Honour, but we do submit quite
strongly, and will, that one cannot reason from

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those three things proscribed by section 90 to the
conclusion that that was meant to be the whole
field of taxation of goods.

McHUGH J: Supposing in 1915 the Commonwealth wanted to

promote a steal industry in New South Wales, so it
imposed a large tariff on imported steel, but
Victoria imposes a general sales tax on steel, it may mean that the New South Wales industry cannot
be developed.

MR DOYLE:

It might, Your Honour, but my answer to that

would be this, that tariff policy relates to the
differential in burdens between imported steel and
local steel. If the Commonwealth imposes a customs
tariff of X per ton on imported steel and O on
local steel, Victoria imposes a general tax on the
sale of steel, that cannot affect the differential
and so tariff policy, properly understood, is not

being affected. What is affected is a desire lying
behind that to stimulate a home steel industry.
Now, first of all, the effect Your Honour refers to
may or may not occur; it would be a matter
requiring, I suppose, some careful degree of
analysis whether that tax, equally affecting the
imported and local item, would have the effect.
But even if it did have the effect, what we would
argue is that then to reason back and in effect
say, well this must be an excise, is to assume what
is at least today the question at issue, namely,
was the intent to give the Commonwealth control
over the whole field of taxation of goods or was it
to withdraw from the States certain defined powers,
recognizing as one must that by all sorts of other
laws, the States could give rise to exactly the
same problem Your Honour adverted to.
An easier example is, let us assume, to stimulate the local tobacco industry, the
Commonwealth imposes a relatively heavy customs
duty on imported tobacco, no excise on local

tobacco, and South Australia, undeterred by its
attempt to get rid of non-returnable bottles,
simply bans the smoking or consumption of tobacco

in South Australia. Now that could be quite
deleterious to the stimulation of a local tobacco
industry, because one segment of the Australian
market is now closed off.
And, that is really just to draw by way of

illustration on what has been said in a number of
the judgments that Mr Jackson read from this
morning, that it is at least relevant to remind
ourselves that the Commonwealth power in this area
was not expressed in that wide fashion, taxes on
goods, and secondly, that it is undeniable that in
all sorts of other ways, the States could interfere

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with the sort of objective Your Honour has identified.
That, of course, does not prove my submission

but I would submit that it must at least make one
cautious in reasoning that if a State tax can
interfere in that way then, in effect, one has
reason to think it is an excise because one has now
identified it as moving into the prohibited area.
It really brings one back to the critical question:

what really is the prohibited area? I will again
come back to this later, but Your Honour will
probably remember the passage read from
Mr Justice Dixon's judgment this morning where he

said it may be assumed that the purpose was. What
we would argue is when we go to the Convention
Debates, if one accepts that it is necessary to
clarify the purpose, one can find a narrower
purpose identified there.

DEANE J: Is the pre-Federation ideal of a uniform tariff of

any relevance to this?

MR DOYLE: It is, Your Honour, in this sense, that they

clearly understood that essential to Federation was
a uniform external tariff. Secondly, they clearly
understood that to effectuate that, the
Commonwealth must have exclusive power in relation
to excises. Our submission is what that meant to
them was - because tariff meant free trade or
protectionist - - -

DEANE J:

Or did it not mean uniform duties on goods?

MR DOYLE: Again it did, Your Honour, but uniform duties, as

it were -

DEANE J:

Not in a non-discriminatory sense but in a sense

of corresponding.

MR DOYLE:

It meant uniform duties, Your Honours, at the

boundaries of Australia. Those duties could be
free trade or protectionist and if the Commonwealth
was to have the power to decide that, of necessity
it had to have the power to determine whether there
would be any and what burden on local goods. What
it does not mean is that, for instance, cigarettes
in South Australia - -

DEANE J:

I was taking you more back to your history and I

was suggesting to you that in the pre-Federation
period, the ideal of uniform tariffs meant uniform
duties on goods within the colonies subscribing to
a uniform tariff area.

MR DOYLE:

In our respectful submission, it did not. What

it meant was - - -

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DEANE J: That is what I am asking you.

MR DOYLE:

In our submission, no. For those purposes I will

use terms I have used already. It meant two

things. The uniform tariff meant entering the
market on equal terms, that is not being subject to
duties at the border, and then secondly, when the
goods are in the market, not being subject to
duties which the local goods do not bear, or the
other way round.

DEANE J:

So you would have, on your understanding, a

uniform tariff if in relation to goods Victorian
producers paid ad valorem 20 per cent, New South
Wales producers paid ad valorem 5 per cent,
provided the tariffs in New South Wales and in
Victoria did not discriminate against imports from
one to the other?

MR DOYLE:

The difficulty I have, Your Honour, in answering

that simply is that it is difficult to see how the
tariff on producers could be anything other than a
selective tariff on local producers in the nature
of things, because if New South Wales and Victoria
want to impose a tariff on producers - - -

DEANE J: Well, then you explain to me how, in pre-

Federation notions of the uniform tariff, you did not necessarily have uniform duties on goods
throughout the colonies subscribing to it.

MR DOYLE:

Yes, because, Your Honour, in our submission - - -

DEANE J: Just give me an example.

MR DOYLE:

Yes.

I think sugar was produced in Queensland

and New South Wales. If there were, let us assume
a retail sales tax on the sale of sugar, as long as
it applied to Queensland and New South Wales sugar

equally, then albeit that in, let us assume in
Queensland, there is no sales tax on sugar - - -

DEANE J: Well, take it to manufacture and production.

MR DOYLE: Well, Your Honour, I am sorry, it is more

difficult because if you go back to a duty on
manufacture and production as such, in almost all
cases then you are only going to be taxing the
local producer. In fact, the law before the Court
in this case is one of the few one probably would
expect to come across where it is arguable that the
place of manufacture is irrelevant because of the
way in which section 17 is expressed. But I might
not be understanding, Your Honour.

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DEANE J:

I am just trying to understand what you are

putting. Am I right that you would now agree that
a uniform tariff scheme in the pre-Federation
notion must mean uniformity in so far as production
and manufacture is concerned, because if it does
not, as I say, I would be most interested in an
example.

MR DOYLE:

Yes, I think so, Your Honour, because any duty on

production will, almost of necessity, be on the
local producer and therefore the ability to tax
production as such, creating the differentials at
the production stage seems to be almost non-
existent.
If I can put it negatively, what our submission does is enable the States to impose
duties which are not selective as between local and
imported items at the wholesale and retail levels
in particular, that is, once it is clearly post-
production.

DEANE J: But when you come to retail, you can have a

50 per cent tariff in Queensland and a 5 per cent
tariff in Victoria and it is still the uniform
tariffs scheme?

MR DOYLE:

Yes.

DEANE J: That is assuming against you what I put by way of

assumption, and that is the pre-Federation notion
of a tariff was something that was understood as a
duty on goods.

MR DOYLE:	Yes.
DEANE J:	And in their thinking the duty on goods was by and

large a custom duty or excise duty.

MR DOYLE:

Yes, and that example that Your Honour just gave

is a convenient point to turn to the issues I was
developing because - - -

DEANE J:

Of course, that leads into the next problem and

that is, if you take it to New South Wales and
Victoria, so far as the manufacturer and the retailer is concerned, the whole advantages of a uniform tariff scheme are absolutely dissipated because those who can will naturally buy from the
low tariff State, customs duties having been
eliminated.

MR DOYLE:

Not in our respectful submission, Your Honour.

Granted, my submissions mean that cigarettes in New
South Wales may cost more than cigarettes in
Victoria because there is a retail tax in New South
Wales which does not apply in Victoria. But first

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of all could I suggest, Your Honour, we have in
fact lived with that for many years and contrary to
what Dr Griffiths said it has not brought the
Federation down.
You will recall, no doubt, the material he

brought to the Court's attention relating to the

European Economic Union. The point is, in
Australia they got rid of the customs houses at the

outset. The problem in the European community is
that the customs houses are still there and from their point of view equalization of all domestic
taxation on goods is seen as the way to enable you

to get rid of the customs houses. In Australia,
the customs houses were eliminated, in any event,
at the outset.
In our submission - and I will come back to

this - that analogy he seeks to draw to the
European experience is really by the by, but the
fact is in Australia we have lived within a
practical sense the problem Your Honour has
identified, that there was a period recently when
cigarettes were cheaper in Queensland than in most
other States. There are some effects from that,
but, in our submission, to suggest that the benefit
of Federation in the economic sense is being
snatched from manufacturers is, with great respect,
to overstate it.

They have survived. One could say, I suppose,

being quite practical about it, that it has the
tendency to make it difficult for States to let
their tax regime creep significantly above those of
other States for the very practical reason
identified. But in our submission - - -

DEANE J: Not really.

I was not suggesting anything of the

kind. What I would suggest would be that in so far
as the retailers of cigarettes are concerned, as

between a high taxing State and a low taxing State

the benefit of a uniform fiscal system has, to a

significant extent, been undermined. I would not
suggest for one moment that because of what has
been allowed as a result of two decisions and
arguably three decisions of this Court, which have
been allowed to stand so far, that the whole of the
advantages of Federation have even vaguely been
undermined.

MR DOYLE: Perhaps I was getting a bit excited, Your Honour,

and thinking of the way Dr Griffith was putting it
this morning, I responded in similar terms. But,
Your Honour, it is interesting when one looks at
the Convention Debates and the materials to which
we take the Court that one does not find, as best I
can recall anywhere, people saying wine in Victoria

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has got to cost - perhaps I should not say cost -
but that the total burden on - the taxation on wine
in Victoria should be the same as the taxation on
wine in New South Wales.
They were certainly alert to the consequences

of there being a difference, and governments

certainly were. What one finds is people saying
"When our goods go into New South Wales they should

not be burdened at the border on going in". And
secondly, once they are in New South Wales they
should be treated in the same way as wine made in
New South Wales. It is significant, we would
submit, that one does not find them expressing the
objective that Your Honour identifies.

DEANE J:

I will stop interrupting you after this, but is

not this resort to the Federation Debates getting
quite out of control? I mean, the people of this country did not know what was said in the heat of

debate in those Convention Debates. They knew what

the history before Federation was. But the way we
are beginning to parse and analyse these passing
comments, some of which do little credit to the
people who made them on any appraisal, really is
beginning to reduce this Court, or divert this
Court, I would think, from its proper function of
ascertaining what the people of the country meant
when they adopted the Constitution.

MR DOYLE:	Your Honour, could I answer that this way - - -
DEANE J:	I mean, we go through pages and pages as each

counsel looks for the odd passing sentence, often
obviously uttered without any forethought, which
supports his view, and of course, gently skips all
the unpleasant and racist overtones in some of the
speeches. It really seems to me to be getting
quite out of control.

MR DOYLE:

I have got a sense of foreboding about the later

part of my argument, Your Honour. I am starting to
feel quite depressed.

DEANE J: Well, I know I will not divert you, Mr Solicitor.

MR DOYLE: Your Honour, if we start from the premise or the

proposition that early in the life of this Court it
was said there was an Australian meaning for the
term - - -

DEANE J: Yes, but in the earlier life of this Court they

possibly had the good sense that people were not
even allowed to refer to the Federation Debates.

MR DOYLE: Well, if we start from the concept that there was

an Australian meaning and, as later members of the

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Court demonstrated, a wider English meaning, then
one is faced with the issue: how does one choose?
Now, surely one perfectly normal way of choosing
would be to say we would choose in the light of the

identified purpose of the provision. Now, we have
Mr Justice Dixon saying, "It may be assumed
so-and-so", and what we merely want to submit is,
not just as a debating trick that he said "It may
be assumed", but we say, when one looks for the
evidence of this relatively wide purpose, which
would support the wider English meaning, surely it
is at least significant if we can demonstrate the
negative that that wider purpose, that is, control
of taxation of goods, uniformity of trade or
equality of burden throughout Australia, at least
if we can demonstrate the negative, that that is
not there, that is relevant and if, along the way,
we can demonstrate that pretty consistently tariff
policy meant the ability to decide whether we will
have a free trade or a protectionist policy, and
then one thinks about what that means, that that is
relevant.
Now, in our submission, that is a bit more

than parsing and analysing, although perhaps we
will be guilty of skipping some awkward things
along the way and we will suggest the Commonwealth,
indeed, left out one of the very key discussions on the meaning of "excise" where they talked about the difference between the Australian meaning and
English meaning. But it is ~n that context that if
there is an Australian meaning, and the Court is
confronted with the issue, how do we decide,
Australian or English?
So our submission is that an important issue

is the identification of the purpose behind
section 90 and that the purpose the Commonwealth
has identified is one which lacks any historical
support.

Another issue which we submit is an important

issue in this area is one which I think Your Honour
Mr Justice Brennan touched on this morning and it
is this: that if the basic meaning of excise is a
tax on local production or upon internally produced
goods - Your Honours Justices Mason and Deane put
things to that effect in Gosford and I think also

in Hematite. Now if that is the basic concept,
then as I understand Your Honour's reasoning, what
you have said is that the tendency of a tax which
affects the sale or distribution of goods, to form
a component of the price, and thus in that way to
affect local production, provides the linkage back
to what is the basic concept. And that was almost
precisely how it was put by, I think, Your Honour
the present Chief Justice in Hematite at page 629,

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about the middle of the page. The concept is
Peterswald, the basic concept, and the tendency of
taxes at a later stage to enter the price, thereby
effect demand and thereby effect production,
including local production, is the linkage to the
basic concept and thereby it all hangs together.
Now, we submit, that gives rise to two or three very important issues: first of all, can that
tendency, in fact, be identified or demonstrated
and we say, no it cannot; modern economic thinking
shows that you cannot say that certain types of tax
do have that tendency, it will depend upon the
state of the market; and secondly, that the
tendency can be equally demonstrated in other taxes
which no one would call an excise; and thirdly, we
submit, the proposition really misses the point,
that an excise is in its nature, a selective tax on
local goods. So, if the reasoning is that the
Peterswald concept is, as it were, the basal
concept, and this tendency provides the linkage, we
submit that the linkage can be shown not to exist
and that highlights the fact that there is a real
problem about calling taxes on dealings post-
production still taxes on production.
Then there are two other important issues, we

submit: one is, how does one in the end decide if a
tax is on local production; is it that sort of
reasoning, namely referring to the effects, or is
it rather, as we would submit, an issue of
characterization, looking at who and what is taxed?
And so as in Hematite, on this point, taking that
as an illustration, we would tend to focus on the
fact that when one looked at who was taxed and in
respect of what, it unerringly at least looked as
if local production was being taxed, when you look

at who was selected and in respect of what. And so
we submit it is really a characterization issue,

not, what we would call, an effects issue. Then the other issue which keeps cropping up
through all this area is this one, in our
submission: if Chamberlain is correct, that you can
have a tax which is an excise when it falls on
certain people and not when it falls on others, and
if the approach in this area is to be one in
substance, why is not a tax falling on a producer
and related to his production, eg a land tax on a
producer, a payroll tax on a producer, why is it
not an excise if it tends to enter the price of
goods as again economic analysis would suggest it

is? We submit that highlights again the difficulty
with the Chamberlain reasoning and it is
interesting that the Solicitor for the Commonwealth
was, in effect, when questioned on this starting to
say, "Well maybe in some cases it will be", in our

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submission, indicating that the difficulty he had

in dealing with that problem. We say, again, here,
what one does is characterize the law and not deal
in terms of effects, that an effects approach in
the end is unproductive. So, Your Honours, they
are the issues which we submit run through this
whole area of discourse.
Finally, could I just say we generally adopt

the submissions put by Mr Jackson but in relation
to the examples he discussed right at the end - and
this will unfold as we develop our submissions - we
would submit that a Victorian tax on a resident in
respect of production in New South Wales was an
excise. In other words, we would not take the
approach he did.
As to packaging, perhaps I cannot say much more at this stage than that it will very often, in
our submission, be a step in production but in the
end you have just got to look at the facts.
Obviously packaging something in David Jones after
sale is very different from packaging back at the
factory stage. First sales are closely linked to
production and if you find a tax on first sales, it
is necessary to look closely at the law to see
whether in reality it is a tax on production,
because you may find it is on first sales and
because of the commodity, one can say quite readily
that although it is close to production, it falls
equally on local and imported items. But again one
may find, when one understands what the commodity
is and the nature of the market, that a tax on
first sales will be invariably or almost invariably
on and only on a local producer and you may then
say that is a tax on production.

DAWSON J:

Does that mean if you see that it is aimed at a

local producer, that would suggest that it is an
excise, whereas if it is general in its application
you cannot say that and it is not an excise in

those circumstances?

MR DOYLE:

Yes, in our submission, because an excise is a

tax on local production, our point is that you may
find a law which in form does not look like an
excise because it is simply on first sales and one
cannot say that first sales are so related to
production that that is in itself a tax on local
production but when one understands the product and
the market, one may find that the only producer it
falls on is a local producer and one might then
conclude that it was a tax on local production.
That will always be a difficult area, we

accept, and there is simply no clear-cut answers
one can give, as it were, a priori or in advance.
-··~

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Perhaps I should make this clear: we do not
suggest that an excise is only a tax on a producer.
We do accept that excises can be levied on other

people. When it is levied on someone other than a
producer, the question is: is it nevertheless a
tax on local production?

BRENNAN J:

What does that phrase mean then, "a tax on local

production"?

MR DOYLE:

You will have to see whether it is a tax on goods

in respect of their local production, and you will

look for both elements. Is it a tax on goods? You
look at the relationship to the goods and in
respect of local production, and if it has not
singled out local production in form, you may
nevertheless conclude that it is, in fact, on local
production because of the way it operates.

BRENNAN J: Are you saying any tax on locally produced

goods?

MR DOYLE:

A selective tax on locally produced goods. must be selective.

BRENNAN J: Selective of the locality of its production?

MR DOYLE:

Yes.

Could I give an illustration:

a tax on the

sale on Coonawarra wine, we would submit, looks
like an excise because one would tend to say in a
common sense fashion, "Well why, out of all

alcoholic liquors select wine from that place?" A
tax on South Australian wine looks like an excise
because it looks as if it is a tax on local
production, and why select just South Australian

wine? A tax on sales of Australian wine again
looks like an excise because it selects the local
commodity.

DAWSON J:	Then the test is discrimination, discrimination against the local producer.
MR DOYLE:	Yes, Your Honour, it can be put that way.	But it

has to be a selective tax or a discriminatory tax
in respect of locally produced goods or local
production.

DAWSON J:	Why can you not have discriminatory sales taxes?
MR DOYLE:	Because we would submit that - that is what I was

talking about. A sales tax on Coonawarra
wine - one would say, well, it is a tax on goods
and although in form it is not a tax on local
production, and to a person not from Australia he
might not know what you are talking about if you
said, "That looks like a tax on local production".
But the selection of the product, in our

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submission, may well be indicative of a tax on
local production.

DAWSON J:

Why? Merely because it has an effect on local

production?

MR DOYLE:

No, Your Honour.

We do not rely upon the effect.

What we rely upon is the fact that the legislature has selected from a field a particular item.

DAWSON J:

Why would you not say that is just a

discriminatory sales tax? Why do you then say it
is not an excise?

.MR DOYLE:

Your Honour, because first of all, of the close linkage that has to tariff policy.

To burden local

production selectively is right in the realm of
tariff policy because if you can have a selective
sales tax on the sale of Coonawarra wine, then why
can you not have a selective sales tax on the sale of Australian wine which, in our submission, seems
to be right in the area of tariff policy in the
free trade sense, namely, imposing a selective
impost on the local item which is not imposed on
the imported item. With the sales tax on
Coonawarra wine you are also discriminating as between some South Australian wines and others, and
also that South Australian wine and other
Australian wines.
In our submission, the fundamental point is

that you are also discriminating between a local
product and the imported product, albeit, in that
example, in a very narrow sense. I suppose, there
is the analogy to the customs, that you seem to be
selecting the entry of that particular local
commodity into the market as the occasion for tax,

and so there is that customs analogy as well. So
while Your Honour's questions - - -

DAWSON J:

Does that not raise difficulties in economic

terms if you select competing products and you
impose a sales tax only on one product so that the
competing product has an advantage? What do you do
then?

MR DOYLE:

Your Honour, first of all the question of

identification of the product has to be approached,
we would submit, in a common sense fashion but, in
our submission, tariff policy is not primarily,
perhaps at all, concerned with that sort of effect.
Tariff policy is concerned with selecting as
between the local item and the imported item, not
primarily or prima facie with a preference as
between local item A and local item B, although
that may be an effect of the way in which a

particular tariff policy is constructed. I suppose

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Barger's case perhaps illustrates that, I think the
favourable tariff for union-produced farm

implements. It can be used in that way and, of
course, it was a tariff on Australian production
and so was an excise being used to achieve a
preference for union-produced farm implements as

against non-union-produced farm implements. So one
cannot draw absolutely neat and tidy lines but, in
our respectful submission, for the reasons I have
indicated in brief, a selective or discriminatory
retail tax of that sort does appear to be - well,
we would submit is a tax on local production, and one would have to decide that case by case in the
light of the facts because obviously one needs to
know or understand what the product is in the sense
that a person not from Australia might think the
words "Coonawarra wine" - which is a generic term -
but once you understand it means wine originating
from a particular place in Australia then you begin
to see the way in which locality is featuring in
the imposition of the liability.

DAWSON J:	You seem to be relying on the very concepts which you reject. It is a tax on local production
because its influence finds its way back to
discourage production of the local product.

MR DOYLE:

No, we do not reason that way, Your Honour.

focus on the selection and, what we submit is that
when you burden selectively, one can say no more
than that the result of that may be to burden the
producer, it may be to burden the seller, it may be
to burden the consumer, and that tariff policy,
properly understood, is not really concerned with
identifying which of them is burdened in saying the

burden will flow back to the producer. We say it
is concerned with the ability to be selective in
the imposition of the burden, and one can say, in
that sense, that Australian production is burdened
by that law and there is no need and no reason to

say the burden flows back to the producer. It will
be for the Parliament to decide what effects it
will try to achieve in this way, but there is
simply no reason to endeavour to predict where - at
least in the legal sense to predict where the
ultimate effect of incidence will be. So, no, we
do not, with respect, rely on that sort of
reasoning; we rely on the fact that when you look
at the facts you can conclude that it is Australian
production which is selected for the impost and
that is sufficient.

BRENNAN J: So, any sales tax on Australian produced goods

is an excise?

MR DOYLE: Selectively, Your Honour, not a general sales

tax. That is why we argue that Chamberlain is

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wrong. A tax which happens to fall on Australian
produced goods is not, for that reason, an excise.

BRENNAN J:

No, but one which says, "This is a sales tax on

Australian produced goods", that is an excise.

MR DOYLE:

Yes, Your Honour, and indeed that seems to be how

the Commonwealth constructs its Sales Tax Acts.
When one looks at them, I think numbers 1 through
to 9 - I am not quite sure of the numbers. I think
1 to 4 are sales taxes on locally produced goods, 5
to 8, I think, are taxes on the sale of imported
goods, and then 9, which under the current law may
be under a bit of a cloud, is a tax on leasing of
both foreign and imported goods and so may, in
fact, straddle the burden, customs and excise, and
might give rise to a problem under section 55.
But, in fact, the current Commonwealth Sales Tax
Acts seem to be structured along those very lines.

BRENNAN J:

Does your argument run into any difficulties by

reason of the proviso to Sl(iii), the bounties
proviso?

MR DOYLE: Well, does Your Honour mean in the sense that

bounties are to be uniform throughout Australia,
whereas on our approach you could have a retail
sales tax in South Australia which you did not have
in Victoria?

BRENNAN J: Yes.

MR DOYLE:

The easy answer is no, Your Honour.

I am just

thinking of the reasons. I think, Your Honour, the
reasons may lie in the nature of a bounty, because
goods, and therefore, in the nature of
the bounties that are identified in the export of
things, I would submit that the bounty, to avoid
discrimination - if you give a bounty in place A
you have to give the same bounty in place B - it is

just in the nature of what you are doing with a
bounty - - -

BRENNAN J: Quite.

MR DOYLE:

Could I add, this of course is directed to the

Commonwealth. The States cannot give bounties at
all - this is to the Commonwealth, and just as a
Commonwealth excise has to be uniform throughout
the country, so must a Commonwealth bounty.

BRENNAN J:

Does it not indicate that the local tax that is

imposed may not sterilize the uniformity of the
bounties?

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MR DOYLE:

Your Honour, if we postulate a Commonwealth

bounty on the production of tobacco and then South
Australia, let us assume alone, imposes a retail
sales tax on the sale of tobacco, all Australian
producers are still eligible for the same bounty,
all Australian producers who sell in South
Australia are subject to the same duty, and their
relative position to imported tobacco is not
altered either, because that is also subjected to
the same duty, so at the moment, with respect, I
think I would say that no, it does not destroy the
effect of the bounty except - - -

DAWSON J:

It means that marketing costs may be higher in

South Australia, but so be it.

MR DOYLE:

Yes. Could I think on that further overnight,

Your Honour, but that is my preliminary answer. So
then coming to the outline of submissions, I have
really, I suppose, by way of a preview dealt with
paragraph 1 of the outline and indicated what we
submit our meaning is so the Court will see where
we are going, but in particular we do argue that
the basic concept is that spelt out in Peterswald. I do not ask Your Honours to get it out now but at
509, point 5, where the Chief Justice said:
a duty analogous to a customs duty imposed
upon goods either in relation to quantity or
value -

In our submission, the important thing for present
purposes are those words, "analogous to a customs
duty", and we submit what that carries with it is the notion of a selective tax. Just as a customs duty is selective in the sense of selecting entry into the local market of the foreign item, so, we submit, the notion of an excise duty is entry into
the local market of the local item.

The other preliminary point we would make is

that the function of the Court being to determine
the meaning of the word "excise" in the
Constitution, we submit that that meaning is the
meaning which the term had in Australia in 1900.
We will be arguing that it did have a particular
meaning in Australia and on that point our
submissions are the same as those of Mr Jackson.
In paragraph 2 of our outline we have referred to the judgment of Your Honour Justice Mason in
Dickenson's Arcade. Again, I do not ask
Your Honours to have that out now but there
Your Honour said that the restricted notion of excise duties in the colonies at the end of the
19th century and identified in Peterswald was

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replaced by an acceptance of a wider concept
derived from English and American sources.
Our submission is that there is no reason, if

one can identify truly an Australian meaning, that

there was and is no reason to move from it. One
can legitimately ask if there was that Australian
meaning, why should it have been replaced by a
wider concept derived from English and American
sources?
I should also address the point at the outset

whether we are confusing connotation and
denotation. In other words, I hope Your Honour
Justice Dawson will not ask me which is which.

DAWSON J:	I thought I made it clear.
MR DOYLE:	In other words, are we getting mixed up between

the known instances of the term in 1900 and the
connotation or true meaning of the term? Our

submission is we are not. The issue for the Court

is: how was the word used in the Constitution? So
again the first inquiry was the meaning of the term
in Australia in 1900.
The next thing is: if the denotation today is

wider or even if in 1900 in other places it was

wider, how was it used in the Constitution? Was it
used in that 1900 sense, the sense Mr Jackson was
developing, or with the potential for a wider
denotation, in other words with - I hope I am
right - the full connotation that the term had,
say, in England or America? In our submission, the
answer to that question will at least be aided, if
not found, by first of all considering the purpose of the provision and, secondly, the context of its
usage in the Australian Constitution. So that is
in a sense the exercise on which we first embark.

Now, Your Honours, could I ask Your Honours to

refer to the book of materials which we provided
and titled "Meaning of 'Excise' in the Australian

Colonies". The first part of this I will endeavour
to move through as quickly as I can because it
largely covers the ground covered by Mr Jackson -
that is, colonial legislation - but the material we
use is also other colonial official material, and I
will pick that up as I go through just so
Your Honours can see how, quite apart from
legislation, the term was used.

Our first main proposition is that an

examination of colonial practice shows that in
colonial legislation and colonial statistics and
other official documents the term "excise" meant a
tax upon a local producer or manufacturer, the

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amount of the tax being determined by the quantity
or value of the goods produced or manufactured.
There do appear to be no instances of taxes

imposed on later steps in the process of
distribution and, so, to that extent the material
can be said to be neutral. On the other hand, it
is also to be noted that licence fees generally were not treated as excises when they were flat
fees, but licence fees imposed on a producer and
determined by amount or value of production were,
in the one or two cases where we have been able to find them, treated as excises which is, we submit, again significant as showing the fact that the
licence fee generally was not seen as an excise,
but when it was on a producer and related to amount

of production was so treated. And the particular
example we will refer to is a New South Wales
tobacco production licence.
Your Honours, I begin in that book at

paragraph 1, which I will not seek to read, which
describes the types of taxes that were imposed in
the colonies, and paragraph 2 just makes the point
that only the taxes referred to in paragraph 1(1),
taxes on spirits, beer and tobacco, their
manufacture, and determined by quantity or value,
were described as excises in the Australian
colonies.
Your Honours, we then, on subsequent pages,

refer to instances drawn from Mills's book of
legislation in all the colonies, and I am not going
to retrace the ground covered by Mr Jackson, I just
make the point that the duties on beer and tobacco
were explicitly called excises, the duty on spirits
was generally simply called a duty, but again, in
the Excise Reduction Acts, which are referred to at
the bottom of page 2 in relation to New South
Wales, and I think there may be one or two other

colonies which had Excise Reduction Acts -
Queensland, which is referred to at the bottom of
page 4 - it is clear that the reference was to
spirits, beer and tobacco.
Now, I will just need to take Your Honours to

one or two specific pages to show the statistical
usage of the term. In relation to New South Wales,
I will not go to the extracts from Mills, which are
appendix 1, but if Your Honours would just go to
appendix 2, which is page 48, we have there a short
written summation, but page 49 is the actual
extract and there you will see, under the heading
"Excise", the references to beer, spirits and
tobacco, and then the reference to the tobacco

factory licence fee. At the bottom of that page
you will see a group of other licences, some of

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them in the same areas - liquor, in particular, and
the second to last one, "Licenses to sell tobacco".
Now, they are not treated as excises and the one which is, the tobacco factory licence fee, that is
in appendix 3, that is pages 53 and 54, and when we
look, page 53 really sets out the terms and
obligations of the licence but at page 54, when we
look to see, in a convenient way, in the schedule,
we see that it is a:
License to manufacture Tobacco, Cigars, and
Cigarettes from Imported Tobacco -

and, on the next line -
Tobacco the produce of New South Wales -

but the fee is related to quantity. And so it is,
in our submission, significant that that one
licence fee is put under the heading of excise in
the statistics showing, in our submission, some
appreciation of the point we are seeking to make
that the excise was understood not just as an
impost on a producer but an impost on a producer
related to quantity and value of production.

That is New South Wales. Your Honours, for

Victoria - and I will not go through what we have
written at page 3 of the book where we summarize
the position, but appendix 5, and in particular
page 61 - I am sorry for the smallness of the
print, Your Honours - but there, under the heading
of "Taxation for Victoria", line 4 you will see
"Excises", line 6 you will see "Licences
(Business)" and as best we can ascertain, all the

licences under that heading were flat licences. We
cannot be absolutely confident because there is a
limit to the extent to which one can go behind
these statistics, but that appears to be the case,
and, Your Honours, the next page, that is page 62,
gives a breakdown of the excises - that is at the
the general heading "Excise and Inland Revenue", bottom of page 62 - for two years and an estimate for the third year, and again you will see under
excises are spirits, beer and tobacco, and we know
from material Your Honours have been given today
and other material, those were duties value and
quantity related, and then, under the separate
heading "Business Licences". Again just to check,
I did a rough addition, and for 1896-1897, the first column, the sum of those three items of
excise was 295,000 pounds, and if you go back to
page 61, right across to the right-hand side,
excise, the amount is 294,746 pounds, so one can be
reasonably confident that what is in the 11 year
return as excises are, in fact, the three items

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identified on page 62 as excises on spirits, beer
and tobacco.
Now, Queensland, Your Honours - again I will

not go through our written material or Mills, but
appendix 6, as the Queensland material, and in
particular page 67, where there are some things
under the heading "Excise" which we would not
submit were excises, is the duty on colonial
tobacco and cigars and the duty on colonial spirits and then three things which, on our argument, would
not be excises at all, but the first two are again,
we know from the legislation referred to by Mills
and by looking at it - that they are usually called
excises or duties, they are on producers, they are
quantity or value related. But it is interesting,
when we look at the Queensland statistics in
another document, that is page 88 of the book -
but, Your Honours, keep your fingers in page 67,
but also look at page 88, and I am now simply
illustrating that when they came to collect
cross-colonial statistics, they observed the
meaning we are suggesting. Page 88 is from the
publication that brought together, Your Honours
will see from back on page 77, statistics from all
the colonies grouped on a uniform basis.
When you look at page 88 for Queensland, you

find first of all customs and then you find excise
and the amount 62,439 pounds. If you go back to
page 67 you will find, Your Honours, that that is
the sum of duty on colonial tobacco and cigars and duty on colonial spirits. In other words, the two things that we would call excises were in the
comparative statistics brought together under the
heading "excises".
The next two things, the export duty on

station produce and the export duty on cedar and
royalty on guano, were in fact, it seems to me by a
process of addition, in fact added to the customs

customs tally of 1.199 million and add to that the line because if you take, looking at page 67, the 2000-odd pounds and the 1000-odd pounds, you get to
the amount shown on page 88 for customs, and the
totalizator tax in those cross colonial statistics
of 5217 has been aggregated on page 88 with other
licences which, on page 67 of 57,000-odd pounds, so
added together they add up to about 63,000 pounds
and when you go to page 88 and look at business
licences you find for Queensland they add up, or
they are recorded at 62,535 pounds.
So in fact it seems when they came to do it on

a cross-colonial basis, they split the items up
more accurately but in particular in accord, we
would submit, with the meaning we give to

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"excises". South Australia, Your Honours: there is nothing I need to bring to the Court's attention in
particular there. Tasmania: perhaps the only item
calling for particular comment is dealt with in
Appendix 1, page 18, because Mr Justice Dixon

commented on this in Matthews. From this whole
range of what we submit is a uniform usage in
Matthews, he referred to a passage in Mills, which we have referred to, which referred there to an
excise duty:
on spirits manufactured in New South Wales and
imported into Tasmania.

We make our comments there which we suggest might
well explain that discordant usage of the term
"excise", but our broader point is that, with all
respect to Mr Justice Dixon, he has selected the
one exception in an otherwise pretty uniform body
of evidence.
Western Australia, Your Honours: again I do

not need to refer to, I think, anything there,
apart from saying, as I think we note in
Appendix 9, that although the Western Australian
legislation indicates - there is legislation
imposing a duty on spirits, in the statistics on
page 75 there is no amount recorded under the
heading of "Excise" until after the Beer Duty Act
of 1898. We have been simply unable to ascertain
whether that is because in fact there was no
distillation of spirits despite the legislation or
whether, for some reason we could not explain, the

duty on spirits was not classed as an excise. So
that is a possible anomaly that we cannot explain.
So, Your Honours, that is the legislative, and

I might call it statistical material which, we
submit, paints a pretty clear picture as to the
sense in which the term was understood, and could
we ask Your Honours in due course just to look more

closely at appendix 10 which does record those
figures over a number of years, and Your Honours
will see consistently in those cross-colonial
statistics the standard way in which the
terminology is used.
Appendix 13, Your Honours, is a significant

document prepared in the context of the prospect of
Federation. It is a report to the Acting Treasurer
of Victoria, and I will come back to it,
Your Honours, in the context of the Convention

Debates. But page 110 of the book is of
particular interest in relation to the meaning of
the term, and I will come back to it because this
is the passage which in the Convention Debates was the subject of comment by Mr Barton and Mr Isaacs.

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Your Honours will see that the authors of this report to the Treasurer say there:
We have found some difficulty in

determining what "excise" includes. The
Adelaide -

and I think they are referring to the convention
discussion -
Convention evidently intended the word to mean
the duties on the manufacture or production of
commodities and nothing more, and this
definition is supported by standard
dictionaries; but it is not at all certain
that this reading is established by the Bill.
Then they refer to what Sir George Turner said

and, perhaps prophetically said:
In interpreting the Constitution the meaning of the word as used in British legislation will very probably have a preponderating
weight, and if this should be the case the
Federation Bill will have a different meaning
in that respect to that intended by the
Convention. It would be well, therefore, to
consider the meaning of the word in British
law.

They then refer to the British usage and say,
towards the end of that long paragraph:
Although in Great Britain the original meaning
of the word is being restored to that which it
bore in Pym's ordnance ..... the meaning is not
sufficiently certain to allow of the word
standing without a definition -

and they say that it should be defined to mean -

"Excise shall mean the duty chargeable on the
manufacture and production of commodities" -

and again, in their tables, that is the meaning
they adopt.

BRENNAN J:	Who is the author of this?
MR DOYLE:	It appears, Your Honour, at page 113. I am

afraid I cannot tell Your Honour much about those
people but, when we come to the Convention Debates,
I think Mr Isaacs says something about who they
are.

McHUGH J: Well, Dr Wollaston was the Secretary of Customs

in Victoria.

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MR DOYLE:

Was he?

MASON CJ: Yes, he is the author of the book.

DEANE J:

The rest probably became representatives of South

Australia in London, like your friend.

MR DOYLE:	I understand that Wollaston was the first head of the Customs and Excise Department of the
Commonwealth. But I will come back to what the
Convention Debates say about the remarks in that
report a little later. The other report that we
would ask Your Honours to look at in due course is
in appendix 14, which is a report of a board to
inquire into the effect of the fiscal system of Victoria upon industry and production.

I will not delay Your Honours now, but when
you read through it, you find constantly, when the
term "excise" in used, it is clearly being used as
meaning, once again, a duty on producers of the
identified commodities related to quantity and
value and the term is used on almost every page.
And the other thing is, one finds reading

through this, fairly regular allusions to the issue
of tariff policy as meaning protectionism as
against free trade and the question of a
differential duty on the local item as against the imported item. And, I suppose the other thing one
could say is, there is, in fact, also there a brief
allusion to the issue of incidence. That is at
page 123 where, about a third of the way down the
page, they refer to the excise on beer and discuss
in brief the question of who really bears it - is
it the brewer, is it the retailer, is it the buyers

of beer? ·
Now, Your Honours, in none of that material,

we would submit, would any reference be found, that

is the two reports, to the issue of control of

taxation of goods generally, to equalization of
price generally across the colonies. Perhaps, I
should not say no reference to it, but no hint that
that is the desired policy. So, Your Honours, that
is the submission we seek to put on the basis of
those materials as to the meaning given to the term
and next I want to turn, relatively briefly, to the
meaning apparently, or the sense in which the word
was used in the Convention Debates. Would that be
a convenient moment, Your Honour.

MASON CJ: Yes, it would. But Mr Solicitor, could I ask you

to give me a reference at some stage to the modern
economic thinking to which you referred earlier
that deals with this question of linkage, namely,

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that is the economic effect of a tax on sale or
distribution via demand back to local manufacture.

MR DOYLE:

Yes, Your Honour, I can give it right now, such as we have extracted.

It is in the thin book of

appendices, appendix 12, and I will come to that a
bit later, but three extracts in there and, as it
happens, also in the Commonwealth book of

supplementary materials, page 131. Some discussion
there about real estate taxes and making the point
that, as a matter of incidence, a tax on land
improvements - well the author says, a tax on land
improvements is essentially an excise tax and he
reasons in terms of incidence analysis to conclude
that that is what it must be because of the way it
works through.

MASON CJ:

Thank you.

We will adjourn until 10.15 tomorrow.

AT 4.16 PM THE MATTER WAS ADJOURNED

UNTIL THURSDAY, 22 APRIL 1993

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[1993] HCATrans 89

Key Legal Topics

Areas of Law

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Statutory Construction

Jurisdiction

Appeal

Standing

Proportionality

having given some further consideration to it.	I
wish to deal with it if I may at a rather later
point when I am dealing with the substance of the matter.

of the Constitutional Commission".	They should be
pages numbered 1, 28 and 29.

apparent, we would submit, that it is appropriate for the Court, for the reasons there set out, to	give further consideration to the appropriateness
of the current test.

from the payment of State excise duties.	We
have decided against such a recommendation.
We believe that the Commonwealth has
sufficient overall power in relation to

say so with respect, very elegantly.	Your Honour
said at about line 23:

close to, a situation which we would submit is	comparable to that obtaining in Cole v Whitfield,
165 CLR 360, where Your Honours observed in that case, in a passage which goes from page 384 about
point 2 to page 385 about point 3 - to the effect
that there was now no settled interpretation of
section 92 and that that was a matter which was
germane to the question of reopening, and may I
refer Your Honours to the passage, page 384 point 2
through to 385 about point 3.
Now, Your Honours, the issue as to the correct interpretation of section 90 was also adverted to
by members of the Court in Philip Morris v
Commissioner of Business Franchises, 167 CLR 399.
May I take Your Honours, very quickly, to the references in the various reasons for judgment.

effect.	The question of looking at the Act on the
face of this, is perhaps not so difficult.	The

that the tax in question will in fact so bear.	The
two tests seem not to sit together, with respect,
terribly well.

legislation.	May I go first to the legislation of
New South Wales.	We have given you the legislation

aside exemptions, but generally speaking, yes.	One
has to bear in mind, of course, that one is not
affecting the ambit of Commonwealth power in the context in which the issue arises.

capital D, as obviously something that was regarded	it is very often set out in the heading, capital E,	as having a common parliamentary and legislative
meaning at the time in Australia.

It	would seem likely, if one looks	at section 93,
it	applies after the imposition of	uniform duties
of	customs.

account of it because its operation is spent.	No
doubt.	As a matter of history its operation is now

Bartley and he held it was a duty of excise.	Then
if one goes from that to Justice Isaacs at

the page Justice Starke, where he said:	Duties of excise under the Constitution have
received a definite interpretation from this
Court in Peterswald v Bartley. They are
duties charged upon goods produced or
manufactured within Australia itself.

being:	whether a duty imposed in relation to the sale
or distribution, as distinct from the
production or manufacture, of goods is a duty of excise.

Justices Rich and Williams, at page 252, at about
point 4.	Your Honours, the critical passage seems
to be this:

Commonwealth as in the case of s 90.	The
argument now advanced -

in Logan Downs v Queensland, 137 CLR 59, at page	84, and that was referred to also by Your Honour
Justice Dawson in Philip Morris, 167 CLR at
page 473, about point 7. Payroll taxes were
referred to at the same place.

law is challenged as contravening section 90.	And,
Your Honours, there is no reason at all, in our

extraterritoriality, and by extraterritoriality I do not mean just the operation of statutes on	events happening geographically outside the
jurisdiction, but also in relation to the ability
of a colonial legislature to legislate for its
residents, to take that test for a start, in
respect of their participation in events occurring outside the jurisdiction and, Your Honours, the doctrine of whatever precisely it may have been, of
Macleod v Attorney-General, ruled the day at that
time.

with the legislature as the basis for doing it.	I
do not suggest otherwise for a moment. All I am
trying to say is that there seemed to be a notion
about at the time of Federation that would prevent
power of this kind being regarded - that treated
power of this kind as non-existing, rightly or wrongly, but that is what seemed to be the
position.

though, is we adopt two positions really.	The
the end how one does it, whether one looks at it as	first is, one, that it does not matter very much in
a matter of practicality or as a matter of
legality. What we were seeking to say was that the
kind of taxes contemplated seemed to have been ones
of the nature at the time of Federation and they
were imposed within the jurisdiction. It may be
the jurisdiction is enlarged for the purpose of
section 90 but, Your Honour, in the end it does not
matter very much.

by the producer or manufacturer.	Commerce would
not really work unless that - - -

moves out and around as well.	I am putting that
badly. We would submit that the test is:	is it a

Your Honours and leave that particular document at
that.	We will, as Your Honours will have seen from

submission, the Court should start.	So that is the
first and fundamental issue.

they will not be taxed on a selective basis.	I am
talking only of section 90.	I am ignoring

said it may be assumed that the purpose was.	What
we would argue is when we go to the Convention

the benefit of a uniform fiscal system has, to a
significant extent, been undermined.	I would not