Dess v Commissioner for Act Revenue - [2015] ACAT 63

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

DESS v COMMISSIONER FOR ACT REVENUE
(Administrative Review) [2015] ACAT 63
AT 15/21
Catchwords: ADMINISTRATIVE REVIEW – unpaid land tax – penalty tax – assessment of land tax under repealed and current legislation – imposition of interest: not reviewable – whether it would be fair and reasonable to remit penalty tax – whether the Applicant took reasonable steps to mitigate the effect of liability – obligation to make enquiries about tax liability when renting out property – claimed failure directly attributable to failure of accountant to properly advise applicant of land tax liability – relevance of reliance on external professional advice - not making reasonable enquiries about tax liability – whether there existed exceptional circumstances for tax default

List of legislation: ACT Civil and Administrative Tribunal Act 2008 s 68

Land Tax Act 2004 ss 9, 14, 19, 19A, 38 and 48 (now repealed)
Rates and Land Tax Act 1926 (repealed) ss 22A, 22BB, 22EB and 22EC
Taxation Administration Act 1999 ss 7, 29AA, 30, 31, 32, 33, 37, 53, 82, 107A, 108A, 136

List of cases: Commissioner for ACT Revenue v Dataflex Pty Ltd and ACT Civil and Administrative Tribunal [2011] ACTCA 14
Gonzalez v Commissioner for ACT Revenue [2015] ACAT 61

Hay v Commissioner for ACT Revenue [2014] ACAT 23
Steele v Commissioner for ACT Revenue(Administrative Review) [2010] ACAT 15
Wade & Tan v Commissioner for ACT Revenue [2014] ACAT 79

Tribunal: Ms E. Symons – Presidential Member

Date of Orders:  22 September 2015
Date of Reasons for Decision:       22 September 2015
ACT CIVIL & ADMINISTRATIVE TRIBUNAL           AT 15/21
BETWEEN:
MICHAEL JOHN DESS
Applicant

AND:
COMMISSIONER FOR ACT REVENUE
Respondent

TRIBUNAL: Ms E. Symons – Presidential Member

DATE: 22 September 2015

ORDER

The Tribunal Orders that:

The decision under review is confirmed.

………………………………..
Ms E. Symons
Presidential Member

REASONS FOR DECISION

On 12 March 2015 Mr Michael Dess (‘the Applicant’) made an application to the ACT Civil and Administrative Tribunal for the review of a decision (‘the decision’) of the Commissioner for ACT Revenue (‘the Commissioner’) dated 5 February 2015. The decision imposed penalty tax in the total of $7,892.70 being 200% or $2,052.02 for the quarters prior to 1 July 2004, and 50% or $5,840.68 for the quarters from 1 July 2004 to 30 June 2014 on Block 14 Section 101 Ngunnawal, a property at 17 Noongale Court, Ngunnawal (“the property”), owned by the Applicant. The decision also imposed interest of $10,075.79. Penalty tax was not charged for the period 1 July 2014 to 30 September 2014. Interest was not charged for the periods 1 January 2003 to 30 June 2004 and from 1 July 2014 to 30 September 2014.
The periods of assessment of land tax on the property were covered by two enactments. The Rates and Land Tax Act 1926 (repealed) (“the old Act”) applied for the period prior to 1 July 2004. Subsequent to that date the relevant Act was the Land Tax Act 2004 (“the current…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] ACAT 63
Decision Date: 22 September 2015

CaseChat Overview and Summary

Dess v Commissioner for Act Revenue involves the Applicant, who sought to challenge an assessment of unpaid land tax and the imposition of a penalty tax. The matter was heard by the Administrative Appeals Tribunal (AAT), which had to determine whether the decision to impose the penalty tax was fair and reasonable. The Applicant argued that their failure to pay the land tax was due to reliance on advice from their accountant, who had failed to inform them of their tax obligations. They also claimed that they took reasonable steps to mitigate the effects of the tax liability, and that exceptional circumstances existed for the tax default.

The legal issues before the AAT involved the fairness and reasonableness of imposing a penalty tax, the obligation of the Applicant to make enquiries about their tax liability when renting out property, and whether the failure to pay the tax was directly attributable to the accountant's failure to provide proper advice. The Applicant argued that they had relied on their accountant's advice and therefore had taken reasonable steps to avoid the tax liability. However, the AAT found that the Applicant had not made reasonable enquiries about their tax liability, and that the reliance on external professional advice did not absolve them of their obligation to ensure compliance with tax obligations.

The AAT considered the principles of fairness and reasonableness in imposing the penalty tax, as well as the need for taxpayers to take responsibility for their own tax obligations. The Tribunal found that the Applicant had not taken reasonable steps to ensure that they were aware of their tax liability, and that the failure to do so was not directly attributable to the accountant's advice. The AAT concluded that it would not be fair and reasonable to remit the penalty tax, as the Applicant had not demonstrated exceptional circumstances for the tax default. The decision to impose the penalty tax was therefore confirmed.

The AAT's decision confirms that the penalty tax imposed by the Commissioner for Act Revenue is upheld. The Applicant's reliance on their accountant's advice was not sufficient to absolve them of their obligation to make enquiries about their tax liability, and the failure to do so resulted in the imposition of the penalty tax. The AAT found that the Applicant had not demonstrated exceptional circumstances for the tax default, and therefore the penalty tax remains in place.

Orders

Orders of the court

The decision under review is confirmed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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