Fabry v Commissioner of Taxation of the Commonwealth of Australia

The case of Fabry v Commissioner of Taxation of the Commonwealth of Australia involved a dispute over the Commissioner’s power to make determinations under Part IVA of the Income Tax Assessment Act 1936 (Cth) in respect of certain years of income. The dispute arose after the applicant, Fabry, applied to the Administrative Appeals Tribunal (AAT) for a review of the Commissioner’s objection decisions. The Commissioner argued that this application rendered his power to make the determinations spent, and thus he was unable to issue amended assessments. Fabry relied on the High Court’s decision in R v Moodie; Ex parte Mithen, which held that a decision-maker becomes functus officio when a request for review is made, leaving no further function for the decision-maker to perform under the Act.

The primary legal issue before the court was whether Fabry’s application to the AAT for review of the Commissioner’s objection decisions rendered the Commissioner’s power to make determinations under Part IVA and to issue amended assessments spent. This required the court to interpret and apply relevant statutory provisions, including sections 14ZY, 14ZZ, and 14ZZA of the ITA Act, as well as sections 25, 26, and 43 of the AAT Act. The court had to consider whether the statutory provisions supported the Commissioner’s argument that his power was spent once the review application was made and, if so, whether this was consistent with the principles established in R v Moodie; Ex parte Mithen.

The court concluded that the Commissioner’s power to make determinations under Part IVA and to issue amended assessments was not rendered spent by Fabry’s application for review to the AAT. The court found that the statutory scheme did not support the notion that the Commissioner’s power became functus officio upon the lodgement of a review application. Instead, the court emphasised that the Commissioner retained the authority to make determinations and issue amended assessments, even while a review application was pending. This conclusion was based on the interpretation of the relevant provisions of the ITA Act and the AAT Act, and the court found that the principles in R v Moodie; Ex parte Mithen did not apply to the specific context of tax determinations and amended assessments.

The application was dismissed, and the applicant was ordered to pay the respondent’s costs. The court held that the Commissioner’s power to make determinations under Part IVA and to issue amended assessments remained intact despite the lodgement of a review application to the AAT.