Chief Commissioner of State Revenue v Elanor Operations Pty Ltd

The Chief Commissioner of State Revenue appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court concerning the exercise of discretion under section 79 of the *Payroll Tax Act 2007* (NSW). The dispute centred on whether the Chief Commissioner had erred in refusing to "de-group" certain entities for the purposes of payroll tax.

The primary legal issue before the Court of Appeal was whether the Supreme Court had been correct in finding that the Chief Commissioner had failed to properly exercise the discretion conferred by section 79 of the *Payroll Tax Act 2007* (NSW) when refusing to de-group the relevant entities. This involved considering the principles governing the exercise of such discretions and whether the Chief Commissioner had taken into account all relevant considerations and disregarded irrelevant ones.

The Court of Appeal dismissed the appeal, upholding the Supreme Court's decision. The Court reasoned that the Chief Commissioner had not properly exercised the discretion afforded to him under section 79. In particular, the Chief Commissioner had failed to give sufficient weight to the fact that the entities were not genuinely integrated for the purposes of their payroll tax obligations, despite their corporate grouping. The Court affirmed that the discretion to de-group is intended to prevent payroll tax from being levied on arrangements that do not reflect a true grouping of employers for payroll tax purposes. The respondents' notice of motion and the appeal were both dismissed, with costs awarded to the respondents.