Commissioner for Act Revenue v Dataflex Pty Ltd

COMMISSIONER FOR ACT REVENUE v DATAFLEX PTY LTD & ANOR
[2010] ACTSC 117 (24 September 2010)

APPEAL – appeal from ACT Civil and Administrative Tribunal – taxation – question of law – payroll tax liability – penalty for non-compliance – reduction in penalty tax – voluntary disclosure – disclosure before investigation – meaning of ‘investigation’ in s 32 of the Taxation Administration Act 1999 (ACT) – more limited than dictionary meaning – enquiry letter not part of an investigation – appeal dismissed.

ACT Civil and Administrative Tribunal Act 2008 (ACT), ss 79, 83, 86
Taxation Administration Act 1999 (ACT), ss 31, 32, 33, 37, 82
Payroll Tax Act 1987 (ACT)
Taxation Administration Act 1996 (SA), s 31

Scott v Cawsey (1907) 5 CLR 132, 154
McGraw-Hinds (Aust) Pty Ltd v Smith (1979) 144 CLR 633, 643-4

ON APPEAL FROM THE ACT CIVIL AND ADMINISTRATIVE TRIBUNAL

No. SCA 11 of 2010

Judge:              Higgins CJ
Supreme Court of the ACT

Date:               24 September 2010

IN THE SUPREME COURT OF THE       )
  )          No. SCA 11 of 2010
AUSTRALIAN CAPITAL TERRITORY    )          

ON APPEAL FROM THE ACT CIVIL AND ADMINISTRATIVE TRIBUNAL

BETWEEN:COMMISSIONER FOR ACT REVENUE

Appellant

AND:DATAFLEX PTY LTD

First Respondent

AND:ACT CIVIL AND ADMINISTRATIVE TRIBUNAL

Second Respondent

ORDER

Judge:  Higgins CJ
Date:  24 September 2010
Place:  Canberra

THE COURT ORDERS THAT:

1. The appeal be dismissed.

1. This is an appeal from a decision of the ACT Civil and Administrative Tribunal (Senior Member Hatch).  Mr Hatch, on 12 November 2009, set aside a decision of the appellant not to remit a penalty for non-payment of payroll tax by more than 20%.  It was the contention of the respondent taxpayer that it was entitled to an 80% reduction in the statutory penalty for that default.

1. The appeal was removed to the Supreme Court by order of Appeals President Stefaniak on 8 February 2010 pursuant to s 83(1) of the ACT Civil and Administrative Tribunal Act 2008 (ACT).  Under s 79 the appeal to the appeals Tribunal may be on a question of fact or law. There is, separately, a right of appeal to the Supreme Court under s 86, also on any question of fact or law.

1. This appeal is, essentially, on a question of law. It turns on the meaning to be assigned to the term “investigation” in s 32 of the Taxation Administration Act 1999 (ACT) (TA Act).

Factual Background

1. There was no factual issue joined between the appellant and respondent.  The respondent became obliged, under the Payroll Tax Act 1987 (ACT) (PT Act) to register for payroll tax purposes on and from 1 July 2005. It failed to do so.

1. On 13 December 2007, as part of a general survey of unregistered employers in the ACT, the appellant sent a letter to the respondent with respect to potential payroll tax liability.  That letter was in the following form:

Dear Sir/Madam

RE:  ACT PAYROLL TAX

The ACT Revenue Office is currently conducting an investigation of all employers…