Dess v Commissioner for Act Revenue

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.