Federal Commissioner of Taxation v West Australian Trustee Executor and Agency Company Limited

The Federal Commissioner of Taxation appealed to the High Court of Australia against a decision of a Board of Review. The dispute concerned an income tax assessment for the financial year 1925-1926 issued to The West Australian Trustee Executor and Agency Company Limited, as trustee for a settlement. The taxpayer had objected to the assessment, and upon the objection being disallowed, referred the matter to the Board of Review. The Board, by a majority decision, allowed the taxpayer's appeal and determined that the assessment should be amended to reflect a lower tax rate. Subsequently, the Deputy Commissioner issued a notice of amended assessment that conformed to the Board's decision, and the Commissioner then lodged an appeal to the High Court.

The primary legal issue before the High Court was whether the Commissioner's appeal against the Board of Review's decision was competent. This question turned on the interpretation of Regulation 45 of the Income Tax Regulations 1927, which stipulated a period of thirty days for the Commissioner to either appeal the Board's decision or give effect to it. The taxpayer argued that the Commissioner had elected to give effect to the decision by issuing an amended assessment and refunding the overpaid tax, thereby rendering the subsequent appeal incompetent and out of time.

The High Court unanimously held that the appeal was incompetent. The Chief Justice reasoned that Regulation 45 imposed an election on the Commissioner: within thirty days of receiving notice of the Board's decision, he must either appeal or implement the decision. By issuing an amended assessment that adopted the Board's determination, the Commissioner had effectively elected to give effect to the decision. Having done so, he could not then appeal against that same decision, as the only assessment in existence was the amended one issued by him. Justice Dixon added that even if the Board's decision was intended to be a final determination, the Commissioner's subsequent actions superseded it, and he could not appeal from his own act. Furthermore, he noted that even if the appeal were not out of time, the Commissioner could not appeal his own amended assessment.

Consequently, the High Court struck out the Commissioner's appeal as incompetent.