Deputy Commissioner of Taxation v George

The Deputy Commissioner of Taxation (the Commissioner) appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning the liability of Mr George (the respondent) for unpaid Pay As You Earn (PAYE) deductions. The dispute centred on the application of penalty provisions under the *Income Tax Assessment Act 1936* (Cth) to directors of a company that had failed to remit these deductions to the Commissioner.

The Court was required to determine whether the Commissioner had exercised his powers expeditiously in issuing a notice under s 222AOD of the Act, and whether the respondent had established a defence under s 222AOJ. Specifically, the Court considered the nature of the continuing obligation imposed on directors and the Commissioner's duty to act promptly in pursuing such penalties.

The Court of Appeal found that the primary judge had erred in concluding that the Commissioner had not acted expeditiously. Their Honours reasoned that the statutory scheme contemplated a continuing obligation on the part of the directors to ensure the remittance of PAYE deductions and did not impose an onus on the Commissioner to initiate penalty proceedings immediately upon the default. The Court held that the respondent had failed to demonstrate that the Commissioner's delay in issuing the notice prejudiced his ability to comply with his obligations or to establish a defence.

The appeal was allowed with costs.