Giunta v Chief Commissioner of State Revenue

[2005] NSWADT 20

CITATION:	Giunta v Chief Commissioner of State Revenue [2005] NSWADT 20
DIVISION:	Revenue Division
PARTIES:	APPLICANT Phil Giunta RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	046038
HEARING DATES:	04/11/2004
SUBMISSIONS CLOSED:	11/04/2004
DATE OF DECISION:	02/09/2005
BEFORE:	Hole M - Judicial Member
APPLICATION:	Taxation Administration Act - liability to pay interest
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Land Tax Management Act 1956
CASES CITED:	The assessments by the Chief Commissioner of State Revenue are confirmed and the application is refused.
REPRESENTATION:	APPLICANT In person RESPONDENT S Benjamin, solicitor
ORDERS:	The assessments by the Chief Commissioner of State Revenue are confirmed and the application is refused.

Introduction

1 The Applicant is the owner of 4 parcels of land which have been purchased by him over a number of years. Apart from his principal place of residence which was purchased in November 1984 he owns a parcel at Auburn which was purchased in April 1972, a parcel at Tuggerawong which was purchased in April 1993 and a parcel at Lalor Park which was purchased in September 1995. The parcel at Auburn had been his principal place of residence until November 1984. The Applicant has applied for a review of the decision made by the Chief Commissioner on 4 August 2004 where land tax has been assessed for the years 2000, 2001, 2002, 2003 and 2004 including assessment “up to 4 years after the due date and with added interest”.

2 The Applicant submitted that he was not aware of the need to furnish a return to the Chief Commissioner in respect of land tax and was not aware of the liability to pay land tax. He had not seen any of the advertising by the Office of State Revenue in relation to the liability of land owners in respect of land tax or the requirement to submit a return to allow land tax to be assessed. The Applicant did not receive any direct information from the Office of State Revenue until after he forwarded an initial return on 20 April 2004 and genuinely believed that he was not liable to pay land tax.

Background

3 The Applicant received a letter from the Valuer-General dated 10 February 2003 notifying the assessment of the value of the properties. The Applicant objected to the Valuer-General’s assessment and his objection was refused. This application for review of the valuation indicated that the Applicant knew of land tax and believed that he was below the threshold. Following the increase in the values of the properties in 2003, the Applicant went to an accountant who suggested that he attend on the Office of State Revenue to ascertain his position. This the Applicant did and when he attended on the Office of State Revenue he was given an initial return form to complete for return to the Office of State Revenue. The Applicant completed the initial return with the details relating to the parcels of land and this return was received by the Office of State Revenue on 20 April 2004.

4 The Applicant submitted that he does not buy papers, does not look for gazettes and believed that he should have received a notice from the “Land Tax” office advising him of his liability. He objected to being told that “he failed to lodge a land tax return” and was concerned that the Respondent ought to have known of the Applicant’s liability in 2000 and advised him then.

5 An assessment of the Applicant’s liability was issued by the Respondent on 7 July 2004. This was objected to on 19 July 2004 and a Letter of Determination was issued on 4 August 2004.

6 Prior to receiving an accountant’s advice in late 2003 that he should attend on the Office of State Revenue the Applicant believed that he was under the “threshold” of land tax. The Applicant had some knowledge that land tax was an incident of ownership of property, however, he believed that he should receive a notice much in the same way that an employee receives a group certificate regarding tax paid or where a tenant receives notice of a rent increase.

7 The Applicant submitted that if he had known of the responsibility he would have put in a return and paid the assessed land tax.

8 The Respondent submitted that the Office of State Revenue engages in a massive education program each year, particularly prior to the due date for annual land tax returns. This includes gazettals, advertisement in papers and on radio stations and educational programs directed at Solicitors, Accountants and the public in general.

9 The Respondent submitted further that the Applicant had business skills and understood procedures which he had used to ascertain his responsibilities. The non-lodgement of a return by the Applicant and subsequent lodgement of the return in January 2004 had resulted in an assessment of land tax including the years 2000, 2001, 2002, 2003 and 2004. These assessments included interest at a market rate only. The assessments were not raised for the years from 1985 when the Applicant first became the owner of more than the property which was his principal place of residence.

10 The responsibility to lodge a land tax return rests on the land owner. The Respondent submitted that in the absence of a provision to impose interest, there would be no incentive to lodge a return. In this particular instance the Chief Commissioner imposed a market rate of interest (being an average of 5.51% per annum) and did not impose a further penalty rate (being 8% per annum). The Applicant, being liable to pay land tax, had therefore had the benefit of the use of the money for the period while the land tax had been unassessed and unpaid.

11 The Applicant had received advice from professionals, although it seems that this advice did not sufficiently inform the Applicant as to his liabilities.

12 The Respondent drew attention to Stature Pty Ltd v Chief Commissioner of State Revenue [2002] NSWADT 271, where consideration was given to the activity of the Chief Commissioner. As in that case the Chief Commissioner acted properly within the framework of the requirements of the Land Tax Management Act and therefore there had not been any denial of natural justice afforded to the Applicant.

13 It is clear that the Applicant had some knowledge of land tax liability, that he knew that as values increased then so too he would be closer to paying land tax. The Applicant had received professional advice although he was not advised to seek an assessment until late in 2003.

14 The Chief Commissioner has the ability to remit the penalty tax and has done so in this instance. As a matter of public policy, the responsibility of the ownership of property including the necessity to be assessed and pay rates and taxes remains with the owner, this is a requirement of the Land Tax Management Act 1996 which places the responsibility on a person who is or may be liable to pay land tax to furnish a return to the Chief Commissioner to allow an assessment to be undertaken.

15 In this instance the assessment by the Chief Commissioner includes a variable market interest rate, averaging 5.51% and representing a fair market return on the use of the money by the tax payer who has the obligation to pay.

16 The assessment issued on 7 July 2004 by the Chief Commissioner and confirmed on 4 August 2004 including interest as a variable market rate have been correctly assessed. The application is refused.

17 I find that the assessment issued on 7 July 2004 by the Chief Commissioner and confirmed on 4 August 2004 including interest as a variable market rate have been correctly assessed and therefore:

The assessments by the Chief Commissioner of State Revenue are confirmed and the application is refused.