Commissioner of Taxation of the Commonwealth of Australia v David Jones Finance & Investments Pty Ltd

The Commissioner of Taxation of the Commonwealth of Australia appealed to the High Court of Australia from a majority decision of the Federal Court. The Federal Court had held that section 177 of the *Income Tax Assessment Act* was ineffective to prevent an investigation into allegations that an assessment had been made in abuse of the Commissioner's power. This decision was made notwithstanding the High Court's prior ruling in *Bloemen's case*, with the Federal Court majority finding that *Bloemen's case* was decided *per incuriam* as it had not considered the interplay between section 75(5) of the Constitution and section 39 of the *Judiciary Act*.

The legal issues before the High Court concerned the effectiveness of section 177 of the *Income Tax Assessment Act* in preventing judicial review of tax assessments alleged to be an abuse of power, and the proper application of the High Court's previous decision in *Bloemen's case*. Specifically, the Court was required to determine whether the Federal Court majority had erred in finding that *Bloemen's case* was decided without regard to crucial constitutional and jurisdictional provisions, thereby allowing for a re-examination of the Commissioner's powers.

The Commissioner argued that the Federal Court had misapplied *Bloemen's case* and that section 177 operated to prevent the investigation of the Commissioner's motives in making an assessment. The respondent, David Jones Finance & Investments Pty Ltd, contended that the Federal Court's majority decision was correct, asserting that the constitutional provisions and section 39 of the *Judiciary Act* were not considered in *Bloemen's case* and that the Commissioner's power could be subject to judicial scrutiny when exercised improperly. However, the respondent also raised a preliminary objection, arguing that the substantive matter had been settled by an agreement between the parties, which included an obligation for the Commissioner to discontinue all existing legal proceedings. This agreement postdated the Federal Court argument but predated the judgment.