Decleah Investments Pty Ltd and Anor as Trustee for the PRS Unit Trust and Commissioner of Taxation

This appeal concerned a dispute between Decleah Investments Pty Ltd and Anor as Trustee for the PRS Unit Trust (the taxpayer) and the Commissioner of Taxation (the Commissioner) regarding the calculation of Goods and Services Tax (GST) payable under the margin scheme. The taxpayer appealed a decision of the Administrative Appeals Tribunal (AAT) which had set aside the Commissioner's objection decision and increased the GST and administrative penalty payable. The core of the dispute revolved around the valuation of land for the purposes of the margin scheme, specifically whether the valuation relied upon by the taxpayer constituted an "approved valuation" under the *A New Tax System (Goods and Services Tax) Act 1999* (Cth).

The legal issues before the court were whether the definition of "margin" in section 75-10(3) of the GST Act required a consideration of the market value of land as at 1 July 2000, or if it was to be calculated by reference to a specific "approved valuation". The court was also required to determine the meaning of "approved valuation" and the extent to which a valuation must conform to the Commissioner's requirements under section 75-35 of the GST Act, and the implications of the phrase "in accordance with" in that context.

Steward J reasoned that the definition of "margin" in section 75-10(3) refers to the excess of consideration over "that valuation", which in turn refers to an "approved valuation". The court held that the issue of valuation is not at large, and the question is whether the valuation relied upon is an "approved valuation" as defined, not whether the valuation itself is correct. Legislative context, including provisions like section 9-75(1) and the existence of section 75-35 granting the Commissioner power to determine valuation requirements, supported this interpretation. The court further analysed the phrase "in accordance with" in section 75-35, concluding, by reference to case law, that it means "in conformity with" or "consistently with" the Commissioner's requirements, rather than merely "not inconsistently with". The court found that the requirements specified in MSV 2009/1 were "spartan" and "vague", making compliance easier, and that substantial compliance with professional standards was required, allowing for latitude in the formation of different market value opinions unless a valuation was so unreasonable that no reasonable valuer could have made it.

The appeal was allowed with costs, and the decision of the Administrative Appeals Tribunal dated 1 December 2017 was set aside. The parties were directed to file agreed orders reflecting the reasons for the decision within 14 days, or written submissions if agreement could not be reached.