Grain Growers Limited v Chief Commissioner of State Revenue (NSW)

Grain Growers Limited (the taxpayer) appealed to the Court of Appeal of New South Wales against a decision of the Chief Commissioner of State Revenue (the Commissioner) concerning the taxpayer's entitlement to an exemption from payroll tax. The taxpayer, a non-profit entity, claimed exemption under section 48 of the *Payroll Tax Act 2007* (NSW), asserting that its charitable purpose was the advancement of the grain industry. The dispute centred on whether the work performed by the taxpayer's employees, who provided information, technical, and analytical services, was of a kind ordinarily performed in connection with the charitable purpose of the institution.

The primary legal issue before the Court of Appeal was the proper construction of the phrase "work of a kind ordinarily performed in connection with the ... charitable ... purposes of the institution" as it appears in section 48 of the *Payroll Tax Act 2007* (NSW). Specifically, the Court had to determine whether this phrase required an assessment of the work performed by comparable institutions, and if so, whether such an interpretation would lead to absurdity or preclude new or innovative charitable activities. The Court also considered the utility of referring to the construction of similar words in different statutory contexts and the relevance of legislative history where provisions have been substantially amended.

The Court of Appeal reasoned that the phrase in question should be construed within its statutory context, and that an interpretation requiring comparison with other institutions was not mandated by the text and would likely lead to an unworkable and absurd outcome. The Court emphasised that the focus should be on whether the work performed by the taxpayer's employees was directly connected to and in furtherance of its stated charitable purpose. The Court found that the work undertaken by the taxpayer's employees, while valuable to the grain industry, was not of a kind ordinarily performed in connection with the charitable purposes of an institution whose primary aim was the advancement of that industry.

The appeal was dismissed, and Grain Growers Limited was ordered to pay the costs of the Chief Commissioner of State Revenue.