Deputy Commissioner of Taxation v Huang

The Deputy Commissioner of Taxation (DTC) sought to recover unpaid income tax from Mr Huang. Mr Huang had been a director of a company, Auswide Holdings Pty Ltd, which had failed to remit to the Commissioner of Taxation amounts it had withheld from its employees' wages. The DTC sought to recover these amounts from Mr Huang personally under section 222AOB of the *Income Tax Assessment Act 1936* (Cth) (the Act), which provides for the recovery of unpaid company tax from directors. The matter came before the High Court of Australia on appeal from the Full Federal Court.

The central legal issue before the High Court was whether Mr Huang was liable under section 222AOB of the Act for the unpaid amounts. Specifically, the Court had to determine whether Mr Huang had taken all reasonable steps to prevent the company from incurring the liability for the unpaid amounts, or, if he had not, whether he had, after the company had begun to default, taken all reasonable steps to ensure that the company paid the amounts.

The High Court held that Mr Huang was not liable under section 222AOB. Gageler, Keane, Gordon, Edelman and Gleeson JJ jointly reasoned that the statutory language of section 222AOB required the DTC to prove that the director had failed to take reasonable steps to prevent the company from incurring the liability, or, if that had occurred, failed to take reasonable steps to ensure payment after the default. The Court found that the evidence did not establish that Mr Huang had failed to take all reasonable steps to prevent the company from incurring the liability, nor that he had failed to take all reasonable steps to ensure payment after the default. The Court emphasised that the onus was on the DTC to prove the elements of the offence, and that the evidence presented did not discharge this onus.

The appeal was dismissed.