Ha v New South Wales

In *Ha v New South Wales*, the High Court of Australia considered the validity of certain provisions of the *Business Franchise Licences (Tobacco) Act 1987* (NSW). The plaintiffs, tobacco retailers and wholesalers, challenged the monthly licence fees imposed by the Act, which were calculated based on the value of tobacco sold in a preceding month. The central dispute concerned whether these fees constituted duties of excise within the meaning of section 90 of the Commonwealth Constitution, which grants the Commonwealth Parliament exclusive power to impose such duties.

The High Court was required to determine whether the licence fees imposed by the New South Wales Act were duties of excise, thereby infringing upon the exclusive federal power under section 90 of the Constitution. Specifically, the Court had to consider whether the characterisation of the fees as payment for a licence to carry on business was determinative, or if their calculation and incidence meant they fell within the constitutional prohibition. The Court also considered the question of prospective overruling in relation to these constitutional issues.

The Court reasoned that a tax on the sale of goods, calculated by reference to the value of those goods, is a duty of excise, regardless of whether it is labelled a licence fee or whether it is imposed on the producer, manufacturer, or a subsequent seller in the distribution chain. The Court held that the fees imposed by the New South Wales Act were indeed duties of excise because they were levied on the sale of tobacco and their amount was directly related to the value of the tobacco sold. This was found to be an impermissible intrusion into the exclusive legislative power of the Commonwealth Parliament under section 90 of the Constitution.

Consequently, the High Court declared the relevant provisions of the *Business Franchise Licences (Tobacco) Act 1987* (NSW) invalid as they imposed duties of excise. The defendants, the State of New South Wales, were ordered to pay the plaintiffs' costs.