Clarke v Chief Commissioner of State Revenue

[2002] NSWADT 216

CITATION:	Clarke -v- Chief Commissioner of State Revenue [2002] NSWADT 216
DIVISION:	Revenue Division
PARTIES:	APPLICANT Rodney Kenneth Clarke RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	016016
HEARING DATES:	19/06/2002
SUBMISSIONS CLOSED:	06/19/2002
DATE OF DECISION:	10/31/2002
BEFORE:	Hole M - Judicial Member
APPLICATION:	Land tax exemption - principal place of residence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Land Tax Management Act 1956
CASES CITED:
REPRESENTATION:	APPLICANT In person RESPONDENT D Martin, agent
ORDERS:	1. The market rate of interest only is payable on the amount of Land Tax assessed which at present is 4.89%.

1 Mr Rodney Kenneth Clarke has filed an Application for review of the decision by the Commissioner to assess Scenografic Studio Pty Limited as liable to pay land tax in respect of property owned by that company since 1996. (The Applicant operated a studio on the premises under the name of Scenografic Studio Pty Limited and this is an independent theatrical painting studio where jobs are undertaken in relation to artistic matters and the work that is undertaken by the students is obtained by competing for those jobs with other organisations that are subsidised by the Government in the State in which they are.)

2 A Land Tax questionnaire was completed and forwarded to the Office of State Revenue on 14 May 2001. This questionnaire disclosed that Mr Clarke had purchased a property in 1987 and on that advice assessments were made for the Land Tax years of 1996 to 2001 inclusive.

3 The assessment made for the Land Tax years 1996 to 2001 inclusive included late lodgment interest and penalty tax at a rate of 20%.

4 The Applicant forwarded a letter of appeal to the Chief Commissioner on 28 August 2001 setting out that he had not been aware of the liability to Land Tax, that if indeed he had been aware then he would have attended to payment of the Land Tax and would not have been liable to the late lodgment interest or penalty. The Commissioner reviewed the decision to impose late lodgment interest and penalty tax and on 26 September 2001 advised the Applicant that the penalty tax was remitted in full and the premium rate of interest was remitted in full. This resulted in the Applicant being liable to pay the Land Tax as assessed and the variable market rate of interest on that Land Tax which as at September 2001 was 4.89%.

5 The Applicant made representations to the Premier in relation to the payment of the Land Tax and interest and requested that an exemption be extended to him on the basis that the studio that he operated in the premises was similar in nature to NIDA, Opera Australia, Bangarra Dance Company and Darlington School.

6 From the time of lodgement of the Application on 26 October 2001 until early May 2002 there continued to be correspondence between the Applicant and various Officers of the State Government which were not successful in obtaining an exemption in relation to the specific property on which Land Tax was assessable.

7 The Chief Commissioner has made submissions through his representative that following upon the Applicant’s objection in August 2001 and noting the reasons given by the Applicant the Chief Commission remitted the total penalty tax in the sum of $5,412.40, the 8% premium rate of tax in the sum of $4,176.00. The remaining interest payable on the Land Tax which is also payable, being in the sum of $3,402.93.

8 The Applicant submitted that the requirement to pay Land Tax will severely disadvantage him and the studio in that he believes that he was unfairly fined in relation to the payment of Land Tax.

9 The Applicant further submitted that he had lost the opportunity to recoup the Land Tax on the basis that he had not been aware of it and was therefore not able to pass the extra cost on to the business clients. This being a substantial loss to him and in his opinion exceeded the loss of the opportunity of the Government to place the monies which he understands now were payable.

10 The Applicant submitted that he was at a comparative disadvantage over the years 1996 through to 2001 inclusive. He submitted that he promptly pays all taxes due and payable by him. He further submitted that he had been advised by an Accountant and that the issue of Land Tax had not been raised. The first time that he became aware of it was following a telephone call from the Office of State Revenue.

11 There is no doubt that the Applicant has suffered severe stress and anxiety as a result of the liability to pay Land Tax, which because of the outstanding payment being for 6 years, is a considerable sum.

12 The Representative of the Chief Commissioner submitted that the Applicant would have received valuation notice from the Valuer General and subsequently from the office of Land and Property Information which would have indicated to the Applicant that the value of the land was over the threshold in relation to payment of Land Tax.

13 The representative of the Chief Commissioner submitted that as the Applicant had requested that the Chief Commissioner take into account that he had not been aware of his liability to pay the Land Tax, that the Chief Commissioner had remitted the late lodgment penalty and the premium rate of interest. As a matter of public policy, the responsibility and the ownership of the property including the necessity to be assessed and pay rates and taxes on the property remains with the land owner and those advising the land owner. The Applicant has unfortunately found himself in the position that although he was not aware of the provisions relating to the payment of Land Tax he was nevertheless liable. The parties advising him in relation to his tax liabilities, if those parties were aware of the Applicant’s ownership of other property would have been in a position to advise the Applicant of his liabilities.

14 The Chief Commissioner in the past has made an effort to notify land owners of their liabilities and also attempts to bring the liability of payment of Land Tax to the attention of professional advisers.

15 The Applicant in this case has been afforded the benefit of the remission of the penalty tax and the premium rate of interest and taking into account the submissions of the Applicant it is considered that the circumstances of this Application are not entirely outside the control of the tax payer, even though the tax payer was not aware of his liability to pay Land Tax.

16 The Chief Commissioner is encouraged in this circumstance to arrange for the outstanding land tax to be paid in a way in this particular matter whereby the Applicant is able to arrange for the continuation of the Scenografic Studio Pty Limited.

17 I make the following Order:

The market rate of interest only is payable on the amount of Land Tax assessed which at present is 4.89%.