Greer v Deputy Commissioner of Taxation

Greer (the taxpayer) sought judicial review of a decision by the Deputy Commissioner of Taxation (the Commissioner) to disallow an objection against an assessment of income tax. The dispute concerned the Commissioner's refusal to grant the taxpayer an extension of time to lodge an objection against an amended assessment. The matter came before Kirby J in chambers.

The primary legal issue before the court was whether the Commissioner had erred in law by refusing to grant the taxpayer an extension of time to lodge a late objection. This required the court to consider the principles governing the exercise of the Commissioner's discretion under section 14Z(1) of the *Income Tax Assessment Act 1936* (Cth) (the Act), which allows for extensions of time for lodging objections.

Kirby J found that the Commissioner's decision was vitiated by an error of law. His Honour held that the Commissioner had failed to take into account relevant considerations and had given undue weight to irrelevant considerations when exercising the discretion. Specifically, the Commissioner had not adequately considered the taxpayer's explanation for the delay, which included a period of illness and difficulties in obtaining necessary documentation. The court reiterated that the discretion to grant an extension of time is not to be exercised arbitrarily but requires a balanced consideration of all relevant factors, including the taxpayer's reasons for delay and the merits of the proposed objection.

The court ordered that the Commissioner's decision be set aside and remitted to the Commissioner with a direction to reconsider the application for an extension of time in accordance with the reasons given by the court.