Commonwealth Quarries (Footscray) Pty Ltd v Federal Commissioner of Taxation

Commonwealth Quarries (Footscray) Pty Ltd (the taxpayer) appealed to the High Court of Australia against an assessment for sales tax made by the Federal Commissioner of Taxation. The dispute concerned the calculation of the "sale value" of goods sold by the taxpayer, which manufactured and sold metal screenings, toppings, and dust. The taxpayer contended that the sale value should be the amount charged to customers less the cost of delivery, while the Commissioner argued that the full amount charged, including delivery costs, constituted the sale value.

The legal issue before the High Court was the proper construction of section 18 of the Sales Tax Assessment Act (No. 1) 1930-1935. Specifically, the court had to determine whether the "sale value" of goods, for the purposes of sales tax, was the total amount charged by the manufacturer to its customers, or that amount less the cost of delivery. This question arose in circumstances where the taxpayer, as a member of a quarrymasters' association, sold goods at prices fixed by a price list that included delivery to various locations, with the distance of delivery influencing the price.

The High Court, in answering the question referred by the Board of Review, held that the sale value of the goods was the amount actually charged to customers, inclusive of delivery costs. The Court reasoned that for wholesale sales, section 18(1)(a) of the Act stipulated that the sale value was "the amount for which those goods are sold." In this context, the amount for which the goods were sold was the single, inclusive price agreed upon for the goods delivered at a specified place. The Court found no statutory basis to deduct delivery costs, as the contract was for the sale and delivery of goods at a particular place, and the price reflected this complete transaction. For retail sales, where section 18(1)(b) applied, the sale value was the amount for which the goods would be sold if sold by wholesale. The Court found that in this case, the wholesale and retail prices were the same, and the same reasoning applied. Therefore, the full amount charged to customers, without deduction for cartage, was to be considered the sale value for the purposes of the Act.