GH1 Pty Ltd, in Liquidation and Commissioner of Taxation (Taxation)
[2017] AATA 1063
•5 July 2017
GH1 Pty Ltd, in Liquidation and Commissioner of Taxation (Taxation) [2017] AATA 1063 (5 July 2017)
Division:TAXATION & COMMERCIAL DIVISION
File Number: 2015/1155
Re:GH1 Pty Ltd, in Liquidation
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal: Deputy President BJ McCabe
Senior Member CR Walsh
Date:5 July 2017
Place:Perth
The Tribunal affirms the decision under review.
........................................................................
Deputy President BJ McCabe
CATCHWORDS
GOODS AND SERVICES TAX – whether Applicant entitled to input tax credits claimed for creditable acquisitions – existence of tax invoices insufficient to prove taxable supplies were made - objection decision affirmed
LEGISLATION
A New Tax System (Goods and Services Tax) Act 1999 – s 9-5 - s11-5 – s 11-15 - s 11-20 - s 29-10(3) - s 29-70
Corporations Act 2001 – s 286 - s 1306(5)
Tax Administration Act 1953 – s 14ZZK(b)(i)
CASES
Bayconnection Property Developments Pty Ltd and Ors and Commissioner of Taxation [2013] AATA 40
Gashi v Federal Commissioner of Taxation (2013) 209 FCR 301; [2013] FCAFC 30
Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81
Jones v Dunkel (1959) 101 CLR 298; [1959] ALR 367REASONS FOR DECISION
Deputy President BJ McCabe
Senior Member CR Walsh5 July 2017
INTRODUCTION
The sole issue for determination by the Tribunal in this application is whether GH1 Pty Ltd (GH1) is entitled to claim input tax credits (ITCs) totalling $817,207 for creditable acquisitions pursuant to s 11-20 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act), for the periods ended 31 December 2009 and 31 March 2010, for bulk earthwork services provided to it by MNWA Pty Ltd ACN 101 717 177 (MNWA) in relation to the “Belvedere Hills Stage 5” and the “Hocking Stage 6” developments in Wanneroo, Western Australia.
FACTUAL & PROCEDURAL BACKGROUND[1]
[1] The Factual & Procedural Background is, for the most part, a reproduction of the “Statement of Agreed Facts” filed by the parties on 22 March 2017 and tendered at the hearing as Exhibit 3.
Background
GH1 is a proprietary company limited by shares, incorporated in Australia on 7 January 2002 and, until 4 November 2015, was called Gucce Holdings Pty Ltd.
The sole director, shareholder and secretary of GH1 at all material times was Ms Tina Michelle Bazzo (Ms Bazzo).
GH1 carries on a business of land development, commercial property development and dry hire of equipment in Western Australia.
MNWA is a company incorporated in Australia on 15 August 2002 and, until 22 September 2014, was known as Mammoth Nominees Pty Ltd.
At all material times, Mr Allen Bruce Caratti (Mr Carratti) was the sole director, shareholder and secretary of MNWA.
MNWA carries on a business of managing, financing and constructing land developments in Western Australia.
At all material times, Ms Bazzo and Mr Caratti conducted a de facto relationship and resided at the same residence.
On 26 March 2007, MNWA, as the “Contractor”, and GH1, as the “Principal”, entered into a contract to provide bulk earthwork services for the development referred to as “Belvedere Hills Stage 5”.
On 12 June 2007, MNWA, as the “Contractor”, and GH1, as the “Principal” entered into a contract to provide bulk earthwork services for the development referred to as “Hocking Stage 6”.
Both contracts provide that the “Superintendent” is VDM Consulting (WA) Pty Ltd and that the date for “Practical Completion” is “52 weeks from commencement”
GH1’s BASs and ITCs claimed
GH1 lodged business activity statements (BASs) for the periods ended 31 December 2009 and 31 March 2010 as follows:
TABLE 1
BAS period
GST input tax credits (ITCs) claimed
01/10/09 – 31/12/09
$912,216
01/01/10 – 31/03/10
$812,142
The ITCs claimed by GH1 included ITCs relating to work purportedly performed by MNWA and invoiced to GH1 in relation to “Belvedere Hills Estate Stage 5, Claim 1 and 2” (Stage 5) and “Hocking Stage 6, Claim #1 and 2” (Stage 6), as follows:
TABLE 2
Invoice date
No.
Supply description
Invoice amount ($)
GST claim ($)
11/10/09
10550
Hocking Stage 6 – Claim #1 (formerly Lot 2 Lenore Road Wanneroo)
Claim #1 progress payment for works completed to date on Hocking Stage 6
1,758,181.70
159,834.70
07/12/09
13082
Project: - Belvedere Hills Stage 5
Claim 1 on Stage 5
2,571,508.32
233,773.48
31/01/10
12378
Project: - Belvedere Hills Stage 5
Project: - Hocking Stage 6
Claim 2 on Stage 5 $1,327,235.39
Claim 2 on Stage 6 $2,908,764.26
4,659,599.62
423,599.97
TOTAL
8,989,289.64
817,208.15
The total ITCs claimed of $817,208.15 appear in GH1’s “GST [Detail - Accrual]” report for the period 1 July 2009 to 30 June 2010.
Audit
On 24 March 2011, the Commissioner advised GH1 that he was commencing an audit of its affairs for the period 1 January 2010 to 31 December 2010. The Commissioner subsequently broadened the audit period to include 1 July 2009 to 30 June 2011 and then further extended it to include 30 June 2012, 31 September 2012, 31 December 2012 and 30 June 2013.
On 18 February 2014, the Commissioner issued GH1 with an audit decision in which he made findings regarding 11 issues (Audit Decision). Only Issue 7 is relevant to this application. The Audit Decision states the following in relation to Issue 7:
Issue 7:
Are you entitled to the GST credits claimed on the three transactions of development work by Mammoth for stages 5 and 6 of the development known as Hocking?
…
Decision(s):
No. You are not entitled to the GST credits claimed on invoices #10550, #13082 and #12378 for purported Hocking stage 5 and 6 development work supplied by Mammoth.
More specifically, the Audit Decision found, in relation to Issue 7, that the ITCs claimed by GH1 in its BAS for the periods ended 31 December 2009 and 31 March 2010 in the amount of $817,207, as detailed in Table 2 (in paragraph 13 above), were not allowable. This amount of $817,207 represents $1.15 less than the amount in Table 2, because the Commissioner rounded down amounts, resulting in a $1.15 credit in GH1’s favour.
Assessments
On 18 February 2014, the Commissioner issued GH1 with a notice of amended assessments for various tax periods. This included assessments for the periods ended 31 December 2009 and 31 March 2010, to give effect to the Commissioner’s finding in the audit decision on “Issue 7”, as set out above, by including an amount of GST payable of $817,207 (Assessment).
Objection and Review
On 17 April 2014, GH1 lodged an objection to the notice of amended assessments issued on 18 February 2014, which included an objection to the assessments of the periods ended 31 December 2009 and 31 March 2010, that required payment of $817,207 (Objection).
On 12 January 2015, the Commissioner issued GH1 with his “Notice of Objection Decision” in which he disallowed in full GH1’s claim for ITCs (totalling) in the sum of $817,207 for the periods ended 31 December 2009 and 31 March 2010 (Objection Decision). In the “Reasons for Decisions”, attached to the Objection Decision, the Commissioner states[2]:
[2] Exhibit 1, T2 pp 7-8.
In relation to Stage 5, the Deposited Plan in relation to this development was created in November 2008 (being DP 58610). This confirms all development work in relation to this stage was completed before November 2008.
The two disputed invoices relating to this stage of the development are therefore dated after this stage was completed and are very similar in value to the breakdown of the tender price as reflected in the contract of development.
You have provided your accounting software records (being MYOB records) for the transactions relating to the development of this Stage which show that you have recorded all development to this stage before these two disputed invoices were issued. We note that not a lot of the information matches. For instance, the value of the certified Hocking works is not always the same amount as what you have recorded in your books and / or the transactions are processed at different times. However, the total value of development work related to this stage as recorded in your MYOB records is very similar to the value of these two disputed invoices.
We note that you did not make any payment in relation to these two disputed invoices as they were credited to an outstanding loan account balance you had with Mammoth.
In relation to your first claim for Stage 6 of the Hocking Development, the total of the disputed invoice you have provided, dated 11 October 2009, is $1,758, 181.70. The total for Stage 6 of the Hocking Development is $4,507,111 as documented by two invoices dated in October 2009 and January 2010.
Stage 6 of the Hocking Development was executed by a contract of development issued following a tender process which was accepted on 2 June 2007. The letter of acceptance for this contract was dated 6 June 2007. The breakdown of the tender price totals $5,672,675.61.
Progress claim certificates in relation to the development of Stage 6 were provided to us, and the deposited plan in relation to this development was created in November 2008 (being DP 58609). This confirms, like Stage 5, all development work in relation to this stage was completed before November 2008.
The disputed invoice for this stage of the development is therefore dated after this stage was completed.
As for Stage 5, you have provided accounting software records (MYOB records) for the transactions relating to your first claim for Stage 6 of the Hocking Development and like Stage 5, not a lot of the information provided matches. However, the total value of development work related to this claim is very similar to this disputed invoice
As for Stage 5, we note that you did not make any payment in relation to this disputed invoice as it was credited to an outstanding loan account balance you had with Mammoth.
No evidence provided to us by any third party confirms that development work to Stage 5 or 6 creating this entitlement to ITCs was performed in these tax periods. We also note that sales of Lots developed from Stage 5 and 6 started from January 2009 and that even Stage 7 and 8 were considered to have been completed by the date these three invoices were issued. The site superintendent for Stage 5 and 6 also certified these works as being complete by July 2008. This is supported by third party evidence and the chronology of events relating to the development of these lots and the completion of this development, all of which are significantly earlier than the date these three invoices were issued.
Furthermore, we note that for one of these three invoices the transaction was processed in your accounting record with the development address as Lot 22 Nicholson Rd. This is a development owned by an associated entity and at the date of this invoice, aerial evidence confirms development work underway to this site (particularly for the stages stated in your accounting record entry). This transaction was also processed directly to your cost of goods sold instead of the development cost account for the Hocking Development
The Objection Decision, to not allow the GH1’s claim for ITCs in respect to three transactions, was made as a result of the evidence available to the Commissioner, both from the audit and during the objection phase. In that context, it is worth noting that:
· in the course of the audit, the Commissioner asked GH1 for additional information in respect to stage 6 Hocking[3] and some additional information was provided[4];
· at the time of lodging the Objection, some additional information was provided by GH1 to the Commissioner[5]; and
· in the course of considering the Objection, the Commissioner wrote to GH1 seeking further information[6]. However, none was provided.
[3] Exhibit 1 at T34 pp134.
[4] Exhibit 1 at T36 pp146- 147.
[5] Exhibit 1 at T41, T42, T43, T44, T45, T46 pp249-563.
[6] Exhibit 1 at T50 pp670-672.
The additional information supplied during the course of the Objection, set out above, did not persuade the Commissioner that the Audit Decision, which resulted in the issuing of the amended assessments on 18 February 2014, was wrong[7].
[7] Exhibit 1 at T39, pp235-239.
On 26 February 2015, the Commissioner issued notices of amended assessment for the periods ended 31 December 2009 and 31 March 2010. These amended assessments were not related to the Audit Decision.
On 11 March 2015, GH1 applied to the Tribunal for review of the Objection Decision.
By letter dated 6 April 2017, GH1’s solicitors, as at the date of hearing, Zafra Legal, notified the Tribunal that on 5 April 2017 GH1 appointed external administrators to administer its affairs.
At a telephone directions hearing held on 23 June 2017, Mr Ben Dundas of HWL Ebsworth (solicitors for the liquidators of GH1) informed the Tribunal that Mr Rob Kirman and Mr William Harris were appointed as the liquidators of GH1 on 22 May 2017 and that the liquidators were content to proceed to have the decision in this application published.
CONSIDERATION
Evidence
The evidence before the Tribunal comprises:
·Exhibit 1 – comprising two volumes of s 37 or “T documents” and supplementary s 37 documents;
·Exhibit 2 – “Applicant’s Bundle of Documents”, filed 13 October 2016;
·Exhibit 3 – “Statement of Agreed Facts”, dated 22 March 2017; and
·Exhibit 4 – Letter from Ms Carla Kovacevic, of the Australian Government Solicitor, to Mr Matthew Sunits, of Zafra Legal (i.e. GH1’s solicitors at the time of hearing), dated 30 November 2016.
GST Act
Section 11-20 of the GST Act provides:
11-20Who is entitled to input tax credits for creditable acquisitions?
You are entitled to the input tax credit for any creditable acquisition that you make.
Section 11-5 of the GST Act provides:
11-5 What is a creditable acquisition?
You make a creditable acquisition if:
(a)you acquire anything solely or partly for a creditable purpose; and
(b) the supply of the thing to you is a taxable supply; and
(c) you are registered or required to be registered.
Section 11-15 of the GST Act provides:
11-15 Meaning of creditable purpose
(1)You acquire a thing for a creditable purpose to the extent that you acquire it in carrying on your enterprise.
Section 9-5 of the GST Act provides:
9-5 Taxable supplies
You make a taxable supply if:
(a) you make the supply for consideration; and
(b)the supply is made in the course or furtherance of an enterprise that you carry on; and
(c) the supply is connected with the indirect tax zone; and
(d) you are registered or required to be registered.
A “tax invoice” for a taxable supply must be issued by the supplier to the recipient of the supply, except in the case of “recipient created” tax invoices. A “tax invoice” is a document which complies with the various requirements set out in s 29-70 of the GST Act.
Tax invoices are important because they record “creditable acquisitions” for which an ITC can be claimed by the recipient of a taxable supply. The recipient of a taxable supply will normally have to hold a valid tax invoice for the acquisition at the time he lodges his GST return for the period in which the credit is claimed. Relevantly, s 29-10(3) of the GST Act provides:
(3)If you do not hold a tax invoice for a creditable acquisition when you give to the Commissioner a GST return for the tax period to which the input tax credit (or any part of the input tax credit) on the acquisition would otherwise be attributable:
(a)the input tax credit (including any part of the input tax credit) is not attributable to that tax period; and
(b)the input tax credit (or part) is attributable to the first tax period for which you give the Commissioner a GST return at a time when you hold that tax invoice.
…
GH1’s position
GH1’s position, as set out in paragraph 25 of its “Statement of Facts, Issues and Contentions”, filed 15 April 2016, is:
· it acquired the services, which included site works, earthworks, road works, sewer reticulation, stormwater drainage, water reticulation and retaining walls, solely for a creditable purpose;
· the services were a taxable supply in the hands of MNWA;
· GH1 provided consideration for the services; and
· GH1 held tax invoices for the services during the relevant periods.
Additionally, GH1’s “Outline of Submissions”, dated 27 March 2017, provide:
Entitlement to Input Tax Credits
17.The Applicant is entitled to claim input tax credits for creditable acquisition made in the course of carrying on its enterprise…
…
18.It is submitted that MNWA reported that taxable supplies that corresponded with the Input Tax Credits considering the evidence detailed above.
19.The Applicant maintains that its net amount for the Relevant Periods was that as stated in its business activity statements lodged by the Applicant in respect of the Relevant Periods. The Applicant was entitled to claim the Input Tax Credits as:
19.1.The Applicant made the relevant acquisitions for consideration in the course of carrying on its enterprise;
19.2.the Applicant held a tax invoice in respect of the Input Tax Credits at the time they were claimed; and
19.3.in the ordinary course, the above would be sufficient to satisfy the Commissioner that the Applicant was entitled to claim the Input Tax Credits.
20.The Applicant submits that it has met its burden of proof in satisfying the Tribunal that the Applicant was entitled to claim the Input Tax Credits.
21.The Respondent bears an evidentiary onus in respect of any allegation that the transactions underlying the Tax Invoices did not occur.
22.To the extent that the Tribunal needs further proof of the Applicant's entitlement to the Input Tax Credits, the Applicant submits that the transactions have been reported entirely consistently in the books and records of the Applicant and MNWA…
Commissioner’s position
As identified in paragraph 27 of the Commissioner’s “Statement of Facts, Issues and Contentions”, filed 27 May 2016, the Commissioner contends that he correctly disallowed ITCs in the periods ended 31 December 2009 and 31 March 2010 in the amount of $817,207 because:
· the purported invoices[8] do not evidence any actual supplies made by MNWA to GH1;
· evidence from various sources, including third parties, showed that all development works for Stages 5 and 6 was completed prior to the dates of the purported invoices[9]; and
· GH1 already claimed the ITCs in its BAS for the tax periods ended 30 September 2008 and 31 December 2008.
[8] Exhibit 1 at T43, T44 and T45.
[9] Exhibit 1 at T43, T44 and T45.
The Tribunal’s view
For the following reasons, the Tribunal agrees with the Commissioner’s position, as set out above in paragraph 36.
As set out above in paragraph 35, GH1’s “Outline of Submissions”, dated 27 March 2017, state:
21.The Respondent bears an evidentiary onus in respect of any allegation that the transactions underlying the Tax Invoices did not occur.
With respect, this submission is misplaced. GH1 bears the onus of establishing that the Assessment is excessive: s 14ZZK(b)(i) of the Tax Administration Act 1953 (TAA). The burden on GH1 is two-fold: to prove, on the balance of probabilities, that the Assessment is excessive and what the correct assessment ought to be.
There is no onus on the Commissioner to show that the Assessment is reasonable or supported by evidence: Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81 (Gauci) at 89 per Mason J:
The Act does not place any onus on the Commissioner to show that the assessments were correctly made. Nor is there any statutory requirement that the assessments should be sustained or supported by evidence. The implication of such a requirement would be inconsistent with s 190(b) for it is a consequence of that provision that unless the appellant shows by evidence that the assessment is incorrect, it will prevail.
The position was authoritatively summarised by the Full Federal Court in Gashi v Federal Commissioner of Taxation (2013) 209 FCR 301; [2013] FCAFC 30 (Gashi) at [61]:
In seeking to establish in Pt IVC proceedings that an assessment issued under s 167 is excessive, the ultimate question was and remains whether the amount of each assessment was excessive: Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 623. Section 14ZZO of the TAA places the burden of proving each assessment is excessive on the taxpayer: Dalco at 623 citing George at 189. The TAA does not place any onus on the Commissioner to show that the assessments were correctly made: Dalco at 624 citing Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81 at 89. Indeed, absent agreement with the Commissioner to confine the issues for determination in a Pt IVC proceeding, the Commissioner is entitled to rely upon any deficiency in the taxpayer’s proof of the excessiveness of the amount assessed in seeking to uphold the assessment: Dalco at 624.
As submitted by the Commissioner:
23.…If the applicant had led credible evidence to establish that the acquisitions took place, the Commissioner would need to then point to evidence which supported his view that they did not, and in doing so, he would assume an evidentiary onus: Richard Walter Pty Ltd v Commissioner of Taxation (1996) 67 FCR 243. But in the evidentiary lacuna presented to the Tribunal by this applicant, that position never arises because the highest point that the applicant’s case rose to was a submission, in effect, that because the acquisitions were recorded in the MYOB accounts of the applicant, they must have occurred…
On the evidence before it, the Tribunal finds that the purported “tax invoices”[10] do not evidence any actual taxable supplies made by MNWA to GH1. The mere existence of a “tax invoice” is not, by itself, sufficient to establish that a “taxable supply” (under s 9-5 of the GST Act) and corresponding “creditable acquisition” (under s 11-5 of the GST Act), has, in fact, occurred.
[10] Exhibit 1 at T43, T44 and T45.
As DP Frost commented in Bayconnection Property Developments Pty Ltd and Ors and Commissioner of Taxation [2013] AATA 40, at [86]:
…the reality is that a tax invoice does not create a taxable supply; it records one. If a taxable supply did not take place, then a “tax invoice” is meaningless. In other words, documents that are so called “tax invoices” cannot substantiate a creditable acquisition, if in fact there was no supply or acquisition. It must follow that the scrutiny of transactions is always essential, particularly transactions between related parties. [emphasis added]
Further, evidence from various sources, including third parties, shows that all development works for Stage 5 and Stage 6 was completed prior to the dates of the purported invoices[11]. More particularly, the evidence establishes that the ITCs claimed by GH1, for the periods ended 31 December 2009 and 31 March 2010 (totalling $817,207), for Stages 5 and 6, ought not be allowed because:
· the deposited plans relating to the land the subject of the development work were created before the date of the purported tax invoices[12];
· GH1 reported most of the property sales from the development of the land the subject of the development work before the date of the purported tax invoices[13];
· the cost breakdown schedules for the development work for Stages 5 and 6 showed that the development works were either partially completed or fully completed by the date of the purported tax invoices, being invoices 10550 [14]; 13082[15] and 12378[16].
· evidence from the site superintendent and the Water Corporation for Stages 5 and 6 showed that construction of Stages 5 and 6 was completed before the date of the purported tax invoices[17];
· the value of the work certified by engineers as being completed at Stages 5 and 6 almost exactly corresponds with the ITCs claimed by GH1 in its earlier BAS for the tax periods ended 30 September 2008 and 31 December 2008[18]; and
· GH1 had already claimed the ITCs in its BAS for the tax periods ended 30 September 2008 and 31 December 2008.
[11] Exhibit 1 at T43, T44 and T45.
[12] Exhibit 1 at T38, p196, T85, p901, T86, p906, T87, p915 and T88, p920.
[13] Exhibit 1 at T38, p197, T82, pp847-848, T83 pp854, 856-865, T84 pp867, 869875, 877-879.
[14] Exhibit 1 at T38, p197, T42, p401 and T43, pp538 and 543.
[15] Exhibit 1 at T38, p197, T41, p259 and T44, pp546-548 and 550.
[16] Exhibit 1 at T38, pp197-198, T41, p259 and T45, pp552- 563.
[17] Exhibit 1 at T38, pp198-199, T58-T61, pp698-712, T61, pp715-723, T62, p738, T65, p747, T67-T72, pp764- 778.
[18] Exhibit 1 at T38, pp198-201, T59, p706, T61, pp715-723, T65, p743, T67 pp764-770 and T68-T71, pp772-775, T80, p829, T81, p837.
Exhibit 2
In addition to the agreed facts, relies on the evidence contained in the bundle of documents it filed with the Tribunal on 13 October 2016, which was tendered at hearing as Exhibit 2. GH1’s “Outline of Submissions”, dated 27 March 2017, state the following in relation to Exhibit 2:
Evidence
…
7.On or about 17 March 2010, MNWA Ply Ltd lodged a business activity statement for the period ended 31 December 2009. The business activity statement stated that MNWA's net amount for the period was $69,370. The following document is titled "GST [Detail - Accrual] Report" and is in respect of the period ended 31 December 2009. On the final page and the last line of the report are two running balances. Those running balances being $1,603,146.62 and $1,540,564.15. The figures match those reports at labels 1A and 1B of the business activity statement respectively [emphasis added].
8.On page 23 of the Applicant's Documents is an entry that is particularised as follows:
Date - 11/10/2009
ID#- 00010550
Name - Gucce Holdings PI Rate -10.000%
Sale Value- $1,758,181.70 Tax Collected - $159,834.70
9.On Page 34 of the Applicant's Documents is an entry that is particularised as follows:
Date- 7/12/2009 ID#- 00013082
Name- Gucce Holdings PI Rate -10.000%
Sale Value - $2,571 ,508.32
Tax Collected $233,773.48
10.On 12 July 2010, MNWA Ply Ltd lodged a business activity statement for the period ended 31 March 2010. The business activity statement stated that MNWA's net amount for the period was $161,407. The following document is titled "GST [Detail- Accrual] Report" and is in respect of the period ended 31 March 2010. On the final page and the last line of the report are two running balances. Those running balances being $1,470,148.68 and $1,337,879.70 [emphasis added]. On page 56 is an entry that is particularised as follows:
Date - 31/01/2010
ID#- 00012378
Name - Gucce Holdings Pt Rate - 10.000%
Sale Value - $4,659,599.62
Tax Collected- $423,599.97
As submitted by the Commissioner,[19] the Tribunal finds that the additional documents now relied on by GH1 (i.e. Exhibit 2) take the matter no further. No evidence was led from any witness who can explain the underlying transaction to the Tribunal. In the context of the series of disputes involving GH1 and the Commissioner, the lateness of the provision of Exhibit 2, the sophistication of GH1 and given the fact that GH1 and MNWA are related entities, the source and authenticity of the additional documents ought to have been, but was not, the subject of evidence from a witness who could have explained the matter: Jones v Dunkel (1959) 101 CLR 298; [1959] ALR 367. Evidence as to the transactions which Exhibit 2 and the purported “tax invoices”[20] purport to record, should have been led by GH1 but was not. As contended by the Commissioner,[21] Exhibit 2 does no more than prove book entries were made at some time. Book entries do not prove the underlying taxable supply to the applicant in the absence of any evidence of the supply itself.
[19] “Respondent’s Submissions”, dated 6 April 2017, at [25].
[20] Exhibit 1 at T43, T44 and T45
[21] “Respondent’s Submissions”, dated 6 April 2017, at [26].
At the hearing, reliance was placed by GH1 on s 286 and s 1306(5) of the Corporations Act 2001. As contended by the Commissioner,[22] s 286 has no relevance to the issues raised in this matter and s 1306 does not assist GH1. Section 1306 merely provides that the books and records are prima facie evidence of the matters recorded in them and is thereby facilitative of proof of the books themselves. However, as submitted by the Commissioner, this does nothing to address the underlying question of proof of the asserted supplies.
[22] Ibid., at [27].
It does not assist GH1’s case to merely point to MYOB records and identify where the transactions are recorded, when the issue that requires proof is whether the supplies, in fact, took place at all. Consequently, the Tribunal places no weight on Exhibit 2.
DECISION
For the above reasons, the Tribunal:
· finds that GH1 has not discharged its burden of proving, on the balance of probabilities, that the Assessment is excessive: s 14ZZK(b)(i) of the TAA; Gauci; Gashi; and
· affirms the Objection Decision.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Deputy President BJ McCabe & Senior Member CR Walsh
........................................................................
Administrative Assistant
Dated: 5 July 2017
Date of hearing: 27 March 2017 Representative for the
Applicant:Mr M Sunits Solicitors for the Applicant:
Zafra Legal
Counsel for the Respondent:
Ms CH Thompson
Key Legal Topics
Areas of Law
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Tax Law
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Insolvency
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Commercial Law
Legal Concepts
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Statutory Construction
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Remedies
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