Federal Commissioner of Taxation v Futuris Corporation Ltd

The Federal Commissioner of Taxation (the Commissioner) appealed to the High Court of Australia against a decision of the Full Court of the Federal Court of Australia. The dispute concerned amended income tax assessments issued by the Commissioner to Futuris Corporation Ltd (Futuris). Futuris alleged that the Commissioner had deliberately "double counted" amounts of assessable income and sought judicial review of these assessments in the Federal Court under s 39B of the *Judiciary Act 1903* (Cth), notwithstanding that an "appeal" under Pt IVC of the *Taxation Administration Act 1953* (Cth) was also pending.

The High Court was required to determine the relationship between constitutional remedies available under s 39B of the *Judiciary Act* and the statutory appeal process under Pt IVC of the *Taxation Administration Act*. Specifically, the Court had to consider the scope of issues that could be determined in a s 39B proceeding, the relevance of the availability of a remedy in a Pt IVC proceeding to the discretion to grant relief under s 39B, and whether the Commissioner's alleged failure to act *bona fide* in issuing the amended assessment constituted jurisdictional error. The Court also considered the application of s 177(1) of the *Income Tax Assessment Act 1936* (Cth) to proceedings under s 39B and whether it operated as a privative clause subject to the *Hickman* principle.

The High Court reasoned that the remedies available under s 39B of the *Judiciary Act* are discretionary. It held that where a taxpayer has a clear and available avenue for challenging an assessment through the statutory appeal process under Pt IVC of the *Taxation Administration Act*, the discretion to grant relief under s 39B should generally be exercised by refusing to entertain the s 39B application. The Court found that any alleged errors in the assessment process, including the "double counting" of income, occurred within the Commissioner's statutory powers of assessment and were therefore matters to be addressed in the Pt IVC proceedings, not grounds for jurisdictional error attracting judicial review under s 39B. The Court concluded that the Full Court of the Federal Court had erred in exercising its discretion to grant relief under s 39B.

Consequently, the High Court allowed the Commissioner's appeal, set aside the orders and declaration of the Full Court of the Federal Court, and ordered that Futuris's appeal to that Court be dismissed with costs.