Guss v Deputy Commissioner of Taxation

In *Guss v Deputy Commissioner of Taxation*, Mr Antony David Guss sought a review of a summary judgment granted to the Deputy Commissioner of Taxation. The dispute concerned director penalty notices issued under the *Income Tax Assessment Act 1936*. The matter was heard by Judge Riethmuller in the Federal Court of Australia.

The primary legal issue before the court was whether the directors of a company had complied with their obligations under section 222APB of the *Income Tax Assessment Act 1936*. This section requires directors to ensure a company either pays an estimated tax liability, enters into an agreement with the Commissioner, appoints an administrator, or begins to be wound up within 14 days of receiving notice from the Commissioner. The court also considered the practical difficulties, if any, in obtaining a winding-up order within the stipulated timeframe.

Judge Riethmuller reasoned that there was no dispute that the company had not paid the estimated tax, nor had it entered into any agreement with the Commissioner, appointed an administrator, or commenced winding up proceedings. While acknowledging the argument that obtaining a winding-up order within 14 days could be difficult, the court found no formal evidence to support this claim. The court held that it was always open to a litigant to seek an urgent hearing in a court of competent jurisdiction, and it was unrealistic to assume that such courts would not make a judicial officer available to hear an urgent case. The court concluded that the difficulty in obtaining a winding-up order, even if it existed, did not render compliance with section 222APB impossible, and that the short timeframe was a policy decision reflected in the legislation.

The court ordered that the application for review be dismissed. The Deputy Commissioner of Taxation was awarded costs, to be paid from the bankrupt's estate with the same priority as costs of a creditor's petition. Proceedings under the sequestration order were stayed for 21 days, during which time the bankrupt was required to file his statement of affairs and provide a copy to the trustees in bankruptcy.