Chief Commissioner of State Revenue v Davies

The Chief Commissioner of State Revenue (the Commissioner) appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court of New South Wales concerning the calculation of the unutilised value allowance under the *Land Tax Management Act 1956* (NSW). The dispute centred on whether the allowance should be calculated by reference to the unimproved value of the land or its improved value.

The primary legal issue before the Court of Appeal was the correct interpretation of section 21(1)(a) of the *Land Tax Management Act 1956* (NSW), specifically the phrase "unutilised value of the land". The Commissioner contended that this phrase referred to the unimproved value of the land, whereas the taxpayer argued it referred to the improved value. This distinction was crucial for determining the quantum of the unutilised value allowance available to the taxpayer.

The Court of Appeal, comprising Priestley and Beazley JJA and Davies AJA, analysed the statutory language and the purpose of the unutilised value allowance. The Court concluded that the allowance was intended to provide relief in respect of the unimproved value of land that was not being used for a purpose that would attract land tax. Therefore, the Court held that the "unutilised value of the land" for the purposes of the allowance was to be calculated by reference to the unimproved value of the land, not its improved value.

The Court of Appeal allowed the Commissioner's appeal, setting aside the Supreme Court's order and remitting the matter to the Supreme Court for redetermination in accordance with the Court of Appeal's interpretation of the relevant provisions.