Commissioner of State Revenue v Melbourne's Cheapest Cars Pty Ltd
[2018] TASSC 47
•3 October 2018
[2018] TASSC 47
COURT: SUPREME COURT OF TASMANIA
CITATION: Commissioner of State Revenue v Melbourne's Cheapest Cars Pty Ltd [2018] TASSC 47
PARTIES: COMMISSIONER OF STATE REVENUE
v
MELBOURNE'S CHEAPEST CARS PTY LTD
as trustee of the Abelnica Trust
FILE NO: 1203/2018
DELIVERED ON: 3 October 2018
DELIVERED AT: Hobart
HEARING DATE: 6 August 2018
JUDGMENT OF: Blow CJ
CATCHWORDS:
Administrative Law – Administrative tribunals – Statutory appeals from administrative authorities to courts – Tasmania – Appeal to Administrative Appeals Division of Magistrates Court – Failure to take into account published policy of Commissioner of State Revenue.
Magistrates Court (Administrative Appeals Division) Act 2001 (Tas), s 47(2).
Drake v Minister for Immigration (1979) 24 ALR 577; Nevistic v Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639; Federal Commissioner of Taxation v Swift (1989) 18 ALD 679, referred to.
Aust Dig Administrative Law [1147]
Taxes and Duties – Stamp duties – Assessment and amount payable including fines – Other cases – Tasmania – Interest following default in payment of duty – Discretion to remit market rate component of interest.
Taxation Administration Act 1997 (Tas), s 38(1).
Aust Dig Taxes and Duties [1912]
REPRESENTATION:
Counsel:
Appellant: L Brooks
Respondent: No appearance
Solicitors:
Appellant: Solicitor-General
Judgment Number: [2018] TASSC 47
Number of paragraphs: 36
Serial No 47/2018
File No 1203/2018
COMMISSIONER OF STATE REVENUE v MELBOURNE'S CHEAPEST CARS PTY LTD as trustee of the ABELNICA TRUST
REASONS FOR JUDGMENT BLOW CJ
3 October 2018
This is an appeal from a decision made by a magistrate, Mr R Marron, when sitting in the Administrative Appeals Division of the Magistrates Court. It concerns the remission of interest on stamp duty that was not punctually paid.
At all material times the respondent, Melbourne's Cheapest Cars Pty Ltd, in its capacity as the trustee of a trust called the Abelnica Trust, carried on business in Victoria as a licensed motor car trader. It routinely purchased vehicles from other States, including Tasmania, and imported them into Victoria. Stamp duty was payable in Tasmania under the Duties Act 2001 in respect of the company's acquisitions of vehicles registered in Tasmania. The company could have obtained a motor vehicle trader licence under the Motor Vehicle Traders Act 2011 (Tas), and then could have obtained an exemption certificate under s 206 of the Duties Act, but it acquired a number of Tasmanian vehicles without taking those steps. It therefore became liable to pay stamp duty in Tasmania in respect of a number of transactions even though it could have taken steps to obtain an exemption from such liabilities.
On 8 November 2016 the appellant, the Commissioner of State Revenue, made assessments requiring the respondent to pay stamp duty on the dutiable value of 86 vehicles, as well as penalty tax at the rate of 5% and interest at the "market rate". Under s 35(1) of the Taxation Administration Act 1997, the prima facie position was that the interest rate was to be the "market rate" plus a premium component of 8% per annum. However the Commissioner remitted the premium component under s 38(1) of that Act. That subsection empowers the Commissioner to "remit interest payable by a taxpayer by any amount". The legislation does not fetter the exercise of that discretion in any way.
The respondent objected to the assessment. Its objection was considered by a delegate of the Commissioner. On 30 January 2017 that delegate allowed the objection in part. He remitted the penalty tax in full, but decided not to grant any further remission in relation to interest.
Pursuant to s 89(1)(a) of the Taxation Administration Act, the company then applied to the Magistrates Court for a review of the delegate's determination of its objection. Pursuant to s 26(1) of the Magistrates Court (Administrative Appeals Division) Act 2001, the learned magistrate conducted a review of the delegate's decision by way of a hearing de novo. He correctly concluded that the company was liable to pay duty on each of the vehicles that it acquired from Tasmania. He went on to consider the issue relating to interest, concluded that the interest should be fully remitted, and made an order accordingly.
His Honour's decision to remit the market rate component of the interest is the subject of this appeal. The respondent company was served with the notice of appeal, but chose not to be represented at the hearing.
An appeal of this nature is limited to questions of law: Magistrates Court (Administrative Appeals Division) Act, s 47(2). The Commissioner contends that the learned magistrate erred in law in various respects in his reasoning in relation to the interest issue.
The Commissioner had an established policy in relation to remissions of interest and penalty tax. That policy was published in a formal Revenue Ruling numbered PUB-GEN-2014-6 and entitled "Interest and Penalty Tax" ("the revenue ruling"). There is no legislative provision as to the status of such a ruling for the purpose of magistrates' reviews of the decisions of the Commissioner and his delegates. Section 27 of the Magistrates Court (Administrative Appeals Division) Act, which relates to the application of Government policy, does not apply since it applies only to policies adopted by the Cabinet, the Premier or a Minister: s 27(5). If the learned magistrate had applied the Commissioner's policy, he would not have remitted any interest, but he decided to do so.
Liability for interest is established by s 34(1) of the Taxation Administration Act. That subsection reads as follows:
"(1) If a tax default occurs, the taxpayer is liable to pay interest on the amount of tax unpaid calculated on a daily basis from the end of the last day for payment until the day it is paid at the interest rate."
Section 35(1) of that Act provides that the interest rate is the sum of "the market rate component" and "the premium component of 8% per annum".
In his reasons, the learned magistrate set out the following paragraphs from the revenue ruling in relation to the remission of interest:
"Interest rate – Section 35
27 The interest rate consists of two components:
a)A market rate component. The market rate of interest is imposed to compensate the Tasmanian Government for being denied the use of revenue. This rate equals the 90-Day Bank Accepted Bill rate, unless there is a current order specifying a different rate, made by the Treasurer and published in the Government Gazette. On 1 July each year, a new rate of interest is set automatically for the remainder of the financial year. The rate is calculated as the average of the daily yields for 90-Day Bank Accepted Bills published by the Reserve Bank of Australia for the month of May in the financial year preceding the start of each new financial year.
b)A premium rate component of 8 per cent per annum. The premium rate of interest is applied as a disincentive for taxpayers to pay other debts in preference to taxation debts and to encourage them to seek business finance to pay their tax liabilities when they fall due. It also discourages taxpayers from late payment of tax and deters similar non-compliance by other taxpayers. The premium rate is usually charged for late payments of tax and instalment payments made under approved arrangements to pay arrears of tax.
...
Remission of interest – Section 38
29The Commissioner may remit the market rate and premium rate components of interest by any amount considered appropriate to circumstances of the case at hand.
Remission of market rate
30 Given that the purpose of the market rate of interest is to reimburse the Government for financing costs due to the late payment of tax, it will be remitted only in exceptional circumstances. In determining whether to do so, the Commissioner will consider:
a)whether there is any reason that the Tasmanian Government should bear the financing costs of revenue forgone as a result of the tax default; and
b)the exposure to the risks and uncertainty of revenue loss.
31The market rate of interest may be fully remitted if the SRO [State Revenue Office] has contributed to a tax default by a taxpayer. For example, remission of the market rate may be appropriate if the SRO has been unable to provide a taxpayer with a decision in a timely manner or has provided advice which has been shown subsequently to be incorrect.
32In most cases, taxpayers with a tax shortfall tax default did not know they had a liability and, therefore, could not knowingly be using the Government as a financier. Imposition of the market rate of interest is still appropriate in these instances to compensate the Government for the costs relating to funds it has not had the benefit of receiving by the due date.
Remission of premium rate
33All or part of the premium rate of interest may be remitted where:
a) the market rate component of interest is partially or fully remitted;
b) the tax default is due to unforeseen circumstances beyond the control of the taxpayer;
c) the SRO contributed substantially to the taxpayer's error;
d) there has been a tax shortfall tax default and penalty tax has been imposed in accordance with the taxpayer's culpability for the default."
That revenue ruling also contains some provisions of general application that are relevant, and which the learned magistrate referred to in his reasons, as follows:
"5Tasmanian taxation legislation is, in most cases, based on the principle of self-assessment, which places the onus on taxpayers to exercise reasonable care in the calculation and timely payment of their tax liabilities. In the case of the penalty tax provisions, the policy intent is to:
a) encourage taxpayers to disclose any tax liabilities as soon as they become aware of them; and
b) match the level of penalty to the degree of culpability (that is, the extent to which the taxpayer has contributed to the tax default).
6The Commissioner will exercise the discretionary powers contained in the interest and penalty tax provisions to meet contemporary standards of ethical, fair and sensible tax administration. In accordance with the State Revenue Office (SRO) Taxpayer Charter, the Commissioner will start from the presumption that taxpayers have dealt with their tax affairs openly and honestly and, as a consequence, any error made would be due to ignorance or mistake rather than deliberate non-compliance."
"17Reasonable care can be defined as the level at which a taxpayer would have been considered to have given appropriate and serious attention to complying with the obligations imposed under a taxation law."
"76Rulings do not have the force of law. Each decision made by the SRO is made on the merits of each individual case having regard to any relevant Ruling."
The context of [17], which relates to "reasonable care", needs some explanation. Under s 40(3)(a) of the Taxation Administration Act, the Commissioner "may determine that a penalty tax is not payable if satisfied that ... the taxpayer or a person acting on behalf of the taxpayer took reasonable care to comply with the taxation law". In this case the taxpayer took no care to comply with the Duties Act over a period of about 20 months, during which it purchased 86 vehicles in Tasmania. Despite that, the penalty tax was fully remitted by the Commissioner's delegate in January 2017.
The learned magistrate was required to undertake a merits review of the delegate's decision, conducting a hearing de novo, and to make his own discretionary decision, without any legislative fetter on the exercise of his discretion, knowing that there was an established official policy about the sort of decision that he was reviewing. It is not uncommon for the Administrative Appeals Tribunal ("the AAT") to encounter situations like that when reviewing decisions made under Commonwealth legislation. As a result, there is a body of case law as to how any lawful government policy should be taken into account in the course of such a review. The principles established by those cases have been summarised in Aronson, Grove and Weeks Judicial Review of Administrative Action and Government Liability, 6th ed, Law Book Co, 2017, at [3.310] as follows:
"The AAT has repeatedly stressed its extreme reluctance to exercise its powers over government policy, especially if the policy has Ministerial (and therefore political) endorsement. The correct or preferable decision is not to reject lawful government policy unless it is utterly indefensible, nor to refuse to apply it in a particular case unless the demands of justice in the individual case completely overwhelm the countervailing need for consistency in the application of government discretionary powers. Several good reasons have been given for this reticence to reject government policy, particularly where that policy is formulated or settled at the Ministerial level. These grounds have included the difficulties of policy review (let alone formulation) in an adjudicative setting which is of narrow compass and party-controlled; the AAT's limited staff and resources; the comparative lack of relevant expertise in a generalist body such as the AAT; the extreme undesirability of having two policies governing an area, one to be applied to cases not ending up in the tribunal, the other for AAT appeals; the improbability of a tribunal dissatisfied with government policy formulating a coherent and consistently applied alternative of its own; and an acute awareness that many policies depend for their legitimacy upon the way they are developed and maintained in frankly political debate and in consultation with relevantly affected interest groups." [Footnotes omitted.]
The nature of a review of a decision under the Magistrates Court (Administrative Appeals Division) Act is governed by s 26 of that Act, which reads as follows:
"(1) A review of a decision by the Court is to be by way of hearing de novo.
(2) In determining an application for a review of a reviewable decision, the Court may exercise all of the functions that are conferred or imposed by any relevant enactment on the decision-maker who made the decision.
(3) In determining an application for a review of a reviewable decision, the Court may decide —
(a) to affirm the reviewable decision; or
(b) to vary the reviewable decision; or
(c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside; or
(d) to set aside the reviewable decision and remit the matter for reconsideration by the decision-maker in accordance with any directions or recommendations of the Court."
That section is in very similar terms to the equivalent legislative provisions relating to the AAT and to this State's Resource Management and Planning Appeal Tribunal: Administrative Appeals Tribunal Act 1975 (Cth), s 43(1); Resource Management and Planning Appeal Tribunal Act 1993, s 23. Those provisions have been held to impose on the tribunals to which they relate a duty, on the hearing of every appeal, to make the "correct or preferable decision": Drake v Minister for Immigration (1979) 24 ALR 577 at 589; Kain v Glamorgan/Spring Bay Council (1996) 90 LGERA 326 at 335; St Helen's Area Land Care & Coast Care Group Inc v Break O'Day Council [2007] TASSC 15, 16 Tas R 169 at [71]. It follows that a magistrate, in making a decision under s 26(3) of the Magistrates Court (Administrative Appeals Division) Act, also has a duty to make the correct or preferable decision. In this case, since the learned magistrate was required to exercise an unfettered discretion, it cannot be said that there was a single "correct" decision that he was required to make. He was required to make the "preferable" decision.
It seems clear that the learned magistrate was unaware of the body of case law to which I have referred. However he did mention the revenue ruling before deciding not to follow it. In his reasons at [57], he said that the paragraphs he was quoting from the revenue ruling provided "a useful background when considering whether there should be a remission of the market rate component of interest".
After setting out the relevant paragraphs of the revenue ruling, the learned magistrate said, at [58]-[68]:
"[58]I take into consideration the ruling and in particular passages that I have sighted [sic] and the matters referred to by the delegate in his determination with respect to the remission of interest.
[59]In my view, while the submission by the respondent that neither the Department of State Growth nor the State Revenue Office were responsible for the failure by MCC PL to register as a license [sic] motor vehicle trader in Tasmania and therefore take advantage of the exemption to pay duty, is applicable in relation to the most significant issue being the payment of duty itself, it is less so in this case in relation to the question of interest.
[60]The documents filed by MCC PL clearly revealed that the beneficial owner of the vehicle [sic] and the vehicle itself [sic] were located in Victoria.
[61]Throughout the whole period that MCC PL purchased cars in Tasmania, they were entitled to be registered as a licensed motor vehicle trader in Tasmania and therefore entitled to apply for an exemption from duty. This is relevant when considering that the market rate of interest is said on one hand, to reflect on one hand [sic] the use by MCC and the lack of use of that money by the state on the other.
[62]In my view the scenario distinguishes the decision of Trust Co of Australia Ltd v Chief Commissioner of State Revenue [2002] NSWADT 21.
[63]In that case interest both market and premium rate, had been imposed based on the conclusion that the taxpayer was culpable as their business required them to have knowledge of state taxes and their requirements and, given the nature of the transaction, they should have been alerted to the land tax obligations.
[64]It could be said then, that the taxpayer had the use for that time of the money that was at all times due to the state. In contrast, the situation facing MCC PL was that while they had the use of the money, it could not be said that under no circumstances would they have been entitled to do so as registration as a licensed motor vehicle trader in Tasmania would have made that possible.
[65]The Chief Commissioner of State revenue [sic] NSW also found that the taxpayer had failed to lodge the return by the due date and accordingly the imposition of late lodgement interest at the market rate was appropriate because to fully remit the interest would be inequitable to other taxpayers who did lodge their return [sic] by the due date.
[66]Although the taxpayer could have lodged by the due date and possibly avoided interest payments, there was no situation by which the taxpayer could have taken steps such as MCC PL could have that avoided the need to pay the land tax, or in MCC PL's case the duty.
[67]Finding.
[68]For the reasons that I have stated I'm satisfied that the market rate should be fully remitted."
Before I analyse the learned magistrate's approach to the revenue ruling, it is appropriate that I say a little about the decision that he referred to at [62] – Trust Co of Australia Ltd v Chief Commissioner of State Revenue [2002] NSWADT 21.That was a decision of the Administrative Decisions Tribunal of New South Wales. It concerned a liability for interest following a late payment of land tax. The applicant company was late in lodging a land tax return because of confusion as to the registration of a property for land tax purposes. There was no suggestion that it had any desire not to pay land tax as and when required. There was legislation that provided that, after a "tax default", interest was to be payable at a rate consisting of two components, namely a market rate component and a premium rate component of 8% per annum. The Chief Commissioner had a discretionary power to remit interest in circumstances that he considered appropriate. It appears from the tribunal's reasons at [23] that he had "not issued any publicly available document disclosing circumstances that would be taken into account when considering remission of either or both the interest amounts". At [30], the tribunal accepted a submission of the Chief Commissioner that there were no grounds to warrant the remission of the market rate in that case, saying, "A remission of the market rate interest, in my opinion, can only be made in exceptional circumstances."
Obviously the applicant company in that case was in a different position from the taxpayer in this case. That applicant had never been in a position to take lawful steps to obtain an exemption from land tax. The taxpayer in this case had been in a position to take lawful steps to obtain an exemption from stamp duty. But it by no means followed, as night follows day, that all interest should have been remitted in this case.
I think it is clear from the learned magistrate's reasoning that, although he said at [57] that the revenue ruling provided a useful background and proceeded to set out its relevant paragraphs, and that although he said at [59] that he was taking into consideration the passages that he had cited from the revenue ruling, he attached no weight to that ruling at all. In my view the authorities relating to the proper approach to official policies in AAT proceedings were applicable to the manner in which the learned magistrate was required to exercise his discretion, and those authorities required him to treat the revenue ruling as a relevant consideration and, in particular, to take into account the factors that weighed in favour of adhering to the policy contained in it.
In Drake v Minister for Immigration and Ethnic Affairs (above), which concerned a deportation order, it was argued that the AAT attached undue importance to a policy statement of the Minister. Bowen CJ and Deane J said the following as to the proper approach to be taken when reviewing an administrative decision that involved the application of government policy, at 589-591:
"The Act offers little general guidance on the criteria and rules which the Tribunal is to apply in the performance of its task of reviewing administrative decisions which are subjected to its surveillance. Even in a case such as the present where the legislation under which the relevant decision was made fails to specify the particular criteria or considerations which are relevant to the decision, the Tribunal is not, however, at large. In its proceedings, it is obliged to act judicially, that is to say, with judicial fairness and detachment. In its review of an administrative decision, it is subject to the general constraints to which the administrative officer whose decision is under review was subject, namely, that the relevant power must not be exercised for a purpose other than that for which it exists. ... that regard must be had to the relevant considerations, and that matters 'absolutely apart from the matters which by law ought to be taken into consideration' must be ignored ...
... Ordinarily, however, an administrative officer charged with the exercise of discretionary power will be entitled, in the absence of specifically defined criteria or considerations, to take into account government policy. The propriety of paying regard to general policy considerations is most evident in a case such as the present where there are no specified statutory criteria for the exercise of the discretionary power and where the power is entrusted to a Minister of the Crown responsible to Parliament. Clearly, in considering whether a deportation order should be made in respect of the plaintiff in the present matter, the Minister was entitled to be guided by any general relevant government policy which was not inconsistent with the provisions or the objects of the Migration Act. Indeed, the consistent exercise of discretionary administrative power in the absence of legislative guidelines will, in itself, almost inevitably lead to the formulation of some general policy or rules relating to the exercise of the relevant power.
...
It would be contrary to common sense to preclude the Tribunal, in its review of a decision, from paying any regard to what was a relevant and proper factor in the making of the decision itself. If the original decision-maker has properly paid regard to some general government policy in reaching his decision, the existence of that policy will plainly be a relevant factor for the Tribunal to take into account in reviewing the decision. On the other hand, the Tribunal is not, in the absence of specific statutory provision, entitled to abdicate its function of determining whether the decision made was, on the material before the Tribunal, the correct or preferable one in favour of a function of merely determining whether the decision made conformed with whatever the relevant general government policy might be.
It is not desirable to attempt to frame any general statement of the precise part which government policy should ordinarily play in the determinations of the Tribunal. That is a matter for the Tribunal itself to determine in the context of the particular case and in the light of the need for compromise, in the interest of good government, between, on the one hand, the desirability of consistency in the treatment of citizens under the law and, on the other hand, the ideal of justice in the individual case." [Footnotes omitted.]
The Full Court of the Federal Court of Australia took a similar approach in Nevistic v Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639.
In Federal Commissioner of Taxation v Swift (1989) 18 ALD 679, French J (as he then was) commented on the approach to be taken by the AAT when reviewing a decision as to income tax that accorded with a taxation ruling published by the Commissioner. He said the following, at 691-692:
"In the absence of any statutory direction, the Tribunal is not bound to apply the administrative policies by which the exercise of the discretion under review is regulated at the primary decision-making level. In particular, it was not bound in this case to apply taxation ruling IT 2063 to which reference has already been made. It is generally entitled to take administrative policy into account as a relevant factor in the achievement, inter alia, of a desirable consistency in decision-making: Drake v Minister for Immigration and Ethnic Affairs, supra, at ALR 591. For as Brennan J said in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639 : 'Inconsistency is not merely inelegant: it brings the process of deciding into disrepute, suggesting an arbitrariness which is incompatible with commonly accepted notions of justice.'
That observation is subject to the caveat that decision-makers can be consistently wrong or consistently unjust and that consistency is safely sought by reference to policy only when the policy is appropriate and acceptable: Nevistic v Minister for Immigration and Ethnic Affairs, supra, at 646 (Deane J). This does not involve the Tribunal in reviewing policy or deciding what policy a primary decision-maker should adopt: Re Aston (1985) 8 ALD 366; 4 AAR 65 at 76 (Davies J). And, as in that case, which involved the exercise of a discretion to limit the terms of fishing licences under a national quota scheme, a policy which is developed in the political arena after consultation with the relevant industry ought generally to be given great weight. Taxation ruling IT 2063 does not appear to be in that category. Nevertheless, the magnitude of the task involved in carrying out original decision-making and supervising and regulating the exercise of delegated authority under the taxation laws, is a powerful indicator that appropriate guidelines are essential for the avoidance of administrative chaos and for the achievement of reasonable consistency. The need to maintain the perception and reality of equal treatment is an important factor in the administration of all laws and not least in those relating to taxation. But such considerations go to the weight to be attributed to policy and that is ultimately a matter for the Tribunal: Nevistic v Minister for Immigration and Ethnic Affairs, supra, at 647 (Deane J); Re Aston, supra, at AAR 78 (Davies J)."
An assertion by a decision-maker that he or she has taken a relevant consideration into account will not necessarily conclude the matter. As Toohey J said in Turner v Minister for Immigration and Ethnic Affairs (1981) 55 FLR 180 at 184, "It may be possible to demonstrate from a consideration of all the reasons leading to the decision, or indeed from the decision itself, that a consideration has not been taken into account in any real sense."
It is true that the learned magistrate referred in his reasons at [61] to the notion that interest on a late payment of stamp duty is made payable under the legislation because the taxpayer has had the use of the money while the duty has remained unpaid, and the Government has not. The usual reason for imposing any statutory or contractual liability for the payment of interest is to compensate a payee who has been out of pocket when the payer has not. It is significant that the learned magistrate did not address the question whether there were "exceptional circumstances" as referred to in the revenue ruling at [30]. He did not say whether he had decided to remit the interest because there were exceptional circumstances, or whether the justice of the case required him to remit the interest even though there was an absence of exceptional circumstances. He said nothing about the desirability of consistency in decision-making or the status to be accorded to a revenue ruling published by the Commissioner. The critical question is whether he erred in law in failing to treat the revenue ruling as a relevant consideration in any real sense. If he took it into account but gave it inadequate weight, that would not amount to an error of law unless the result was a decision so unreasonable that no reasonable person could have come to it: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41. In my view the learned magistrate failed to treat the revenue ruling as a relevant consideration. He gave it no weight at all.
The principles to be applied when determining whether the failure to take a consideration into account constituted an error of law are as stated by Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (above). His Honour said the following at 39-40:
"(a)The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which he is bound to take into account in making that decision ...
(b)What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors – and in this context I use this expression to refer to the factors which the decision-maker is bound to consider – are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act. In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard ... By analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject-matter, scope and purpose of the Act." [Original emphasis.]
The discretion to "remit interest payable by a taxpayer by any amount", conferred by s 38(1) of the Taxation Administration Act, is absolutely unconfined by the terms of that Act. The purpose of the Act appears in its long title – "An Act to provide for the administration and enforcement of taxation law". Section 7 of the Act empowers the Minister to appoint a Commissioner of State Revenue. Under s 8(1), the Commissioner's functions are "the general administration of the taxation laws" and "any other function imposed on him or her by any other Act". Under s 8(2), the Commissioner "may do anything necessary or convenient to give effect to the taxation laws". By virtue of s 4, the "taxation laws" include the Duties Act, the Taxation Administration Act, the Debits Duties Act 2001, the Land Tax Rating Act 2000, the Land Tax Act 2000, the Pay-roll Tax Act 1971, and the Payroll Tax Act 2008.
Having regard to the subject-matter, scope and purpose of the Taxation Administration Act, and to the case law relating to the proper approach to government policy in merits review decision-making conducted by the AAT, it is clear that if the Commissioner formulates a policy governing the exercise of any statutory discretion, that policy must be a relevant consideration that decision-makers, including delegates of the Commissioner and magistrates reviewing such discretionary decisions by way of hearings de novo, are obliged to take into account. It follows that the learned magistrate's failure to give the revenue ruling any weight at all amounted to an error of law.
Under s 47(4) of the Magistrates Court (Administrative Appeals Division) Act, this Court has a discretion to "make such order as it thinks appropriate". I could set aside the decision of the learned magistrate and remit the matter to the Magistrates Court for re-determination. However I think it is preferable to put an end to this litigation by making a decision on the merits myself in substitution for the decision of the learned magistrate.
There is no statutory restriction on the matters that might be taken into account in favour of a taxpayer who seeks a remission of interest following the late payment of stamp duty. The only factors that, even arguably, might be taken into account in favour of the taxpayer in this case are the following:
· At all material times, it was entitled to obtain a motor vehicle trader licence, and then to obtain an exemption from the payment of stamp duty.
· It was unaware of its liability to pay stamp duty at all material times.
· It was only after some 20 months and the purchase of dozens of vehicles that a Tasmanian official queried whether it had an exemption from stamp duty.
· The taxpayer apparently had a mistaken belief that it was not liable to pay Tasmanian stamp duty.
· That mistaken belief was apparently shared by an employee of the Department of State Growth with whom the company dealt. There appears to be no evidence as to the seniority or otherwise of that employee.
· Once the taxpayer became aware of its liabilities, it fully co-operated with the Commissioner.
The revenue ruling, at [30] makes it clear that the Commissioner's policy is to remit the market rate component of an interest liability "only in exceptional circumstances". Sometimes companies or individuals do not take all available lawful steps to minimise or avoid tax liabilities. That often occurs as a result of ignorance, oversight or inertia. That is what happened in this case. The taxpayer appears not to have enquired as to whether any steps needed to be taken for it to avoid liability for Tasmanian stamp duty. There is nothing exceptional about that situation. It follows that applying the Commissioner's policy as set out in the revenue ruling would result in the market rate component of the interest not being remitted, and that that component should not be remitted unless it is in the interests of justice to take a different course in this particular case.
There is no suggestion that the taxpayer will suffer any significant hardship if the interest is not remitted. It appears from the documents before me that the "market rate" interest payable in respect of the 86 vehicles totalled $129.65. However it also appears that the taxpayer acquired another 253 vehicles without paying stamp duty; that the interest relating to those vehicles was not the subject of the review conducted by the learned magistrate; and that the taxpayer will remain liable for $11,734.75 by way of "market rate" interest in respect of those vehicles unless that interest is remitted by the Commissioner or one of his delegates. The interest at stake in relation to a total of 339 vehicles averages about $35 per vehicle. The taxpayer, according to a letter from its solicitors dated 25 October 2016, has been purchasing motor vehicles in various States for some five years and bringing them to Victoria. It is not likely to suffer hardship if this case does not go its way. That may account for its decision not to be represented on the hearing of this appeal.
It is also relevant that officers of the Department of State Growth do not issue assessments of tax, and that it is not their role to give advice on taxation matters. There is no suggestion that the taxpayer sought advice from the State Revenue Office at any relevant time.
In my view the factors that weigh in favour of a remission of interest are not strong enough, in all the circumstances, to warrant a departure from the Commissioner's ordinary policy as set forth in the revenue ruling. The preferable decision is therefore one refusing the application for the remission of the market rate component of the interest.
For these reasons I have decided to allow the appeal, set aside the decision of the learned magistrate and order that the decision of the Commissioner's delegate dated 30 January 2017 be affirmed.
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