Deputy Commissioner of Taxation of the Commonwealth of Australia v Richard Walter Pty Ltd; Commissioner of Taxation of the Commonwealth of Australia & Anor v Wengermeier-Ferguson (S126-93; M122-93

These proceedings before the High Court of Australia involved two separate applications for the removal of causes from lower courts. The first matter concerned the Deputy Commissioner of Taxation and Richard Walter Pty Ltd, while the second and third matters involved the Commissioner of Taxation and Sabina Wengermeier-Ferguson and Wolfgang Wengermeier. The applications were heard together by Mason CJ due to the similar, though not identical, legal points they raised.

The central legal issue before the High Court was whether section 39B of the Judiciary Act 1903 (Cth) empowered the Federal Court to treat a notice of assessment, issued under section 177 of the Income Tax Assessment Act 1936 (Cth), as invalid. This question arose in the context of applications for removal of the causes to the High Court under section 40 of the Judiciary Act.

The applicants, represented by Mr. Nettle QC and Mr. Merkel QC, argued that the question was worthy of the High Court's consideration, citing previous pronouncements by the Court itself. They further contended that it was in the public interest for the High Court to consider the issue due to conflicting interpretations of the law. Specifically, they highlighted that State Supreme Courts, bound by the High Court's decision in *Bloemen's case*, would not assume jurisdiction to invalidate a section 177 assessment in recovery proceedings. In contrast, the Federal Court, following the Full Federal Court's decision in *David Jones Finance*, was assuming such jurisdiction in section 39B proceedings. This divergence in judicial approaches created uncertainty and inconsistency in the application of tax law.