Commissioner of Taxation v Dalco

The Commissioner of Taxation applied for special leave to appeal to the High Court of Australia concerning a dispute with Dalco. The core of the disagreement revolved around the interpretation of the Commissioner's assessment process and the onus placed on a taxpayer to challenge such an assessment.

The legal issues before the High Court included determining the proper meaning of "assessment" within the context of section 190(b) of the relevant Act, and whether a taxpayer could discharge their onus by demonstrating that the Commissioner had proceeded on a wrong basis or principle, rather than needing to prove the correct quantum of the assessment. The Court was also asked to consider if a majority judgment in the Full Court was flawed by fundamental bias.

The respondent argued that the function of an appellate court is to set aside an assessment made without proper statutory authority or to correct the Commissioner's assessment process. It was submitted that the word "assessment" in section 190(b) encompasses not only the quantum but also the particulars, ingredients, and the process of assessment itself. This interpretation, it was contended, had been consistently held by the courts, meaning that if the Commissioner had acted on a wrong basis or principle, or had not proceeded on an intelligible basis, the assessment could be set aside, thereby discharging the taxpayer's onus.