Commonwealth v New South Wales

The Commonwealth of Australia brought proceedings against the State of New South Wales concerning the imposition of stamp duty. The dispute arose when the State sought to levy stamp duty on the transfer of land within New South Wales that had been acquired by the Commonwealth for public purposes. The High Court of Australia was tasked with determining the validity of this imposition.

The central legal issue before the Court was whether the State of New South Wales had the power to impose stamp duty on the transfer of land acquired by the Commonwealth for public purposes, given the provisions of the Commonwealth Constitution, specifically section 51, and relevant New South Wales legislation including the Stamp Duties Act, the Real Property Act, and the Property for Public Purposes Acquisition Act.

The Court reasoned that the principle of the immunity of instrumentalities of the Crown from taxation by other Crowns, which had been established in English law, applied to the Commonwealth and its instrumentalities. It was held that the Commonwealth, as a sovereign entity, was not bound by the laws of a State unless expressly so provided. Therefore, the State of New South Wales could not impose stamp duty on the transfer of land acquired by the Commonwealth for public purposes, as this would constitute an interference with the exercise of the Commonwealth's constitutional powers. The Court applied the principle that a State cannot tax the operations of the Commonwealth.