Federal Commissioner of Taxation v McGrouther

The case of Federal Commissioner of Taxation v McGrouther involves the Commissioner of Taxation appealing a decision by the Court below that dismissed the Commissioner's application for a strike out or summary dismissal of the taxpayer's appeal against an objection decision under Part IVC of the Taxation Administration Act 1953 (Cth) ("TAA"). The Commissioner sought leave to appeal from the Court below's decision and, if leave was granted, from the Court below's dismissal of his application. The central legal issue was whether a taxpayer has the implied power or right to withdraw or revoke a notice given under s 14ZYA of the TAA. The Court below had rejected the Commissioner's contention that such a power or right existed, finding that the giving of a s 14ZYA notice merely "starts the clock ticking" for the Commissioner to decide the objection, and does not require the Commissioner to perform any action. The Court below also reasoned that unlike other notices or applications, a s 14ZYA notice does not relieve the Commissioner of any duty or obligation, and therefore there was no utility in implying such a power or right.

The Federal Court granted the Commissioner's application for leave to appeal and allowed the appeal. The Court found that statutory rights that are not jurisdictional can be waived by the person who benefits from them, unless the provision was enacted for some public interest wider than that of the private parties. The Court applied this principle to s 14ZY of the TAA, finding that the statutory rights conferred on taxpayers under that section, to require the Commissioner to decide the objection within 60 days and to a deemed objection decision if the Commissioner fails to do so, are for the sole benefit of the taxpayer. As such, the Court held that a taxpayer can withdraw a s 14ZYA notice and thereby prevent the 60 day period from running. The Court set aside the orders of the Court below and ordered that the proceedings be struck out for want of jurisdiction as an appeal under s 14ZZ of the TAA.