Hampson and Commissioner of Taxation
[2013] AATA 731
•11 October 2013
[2013] AATA 731
Division TAXATION APPEALS DIVISION File Number
2013/4351
Re
Alan Hampson
APPLICANT
And
Commissioner of Taxation
RESPONDENT
DECISION
Tribunal Ms G Ettinger, Senior Member Date 11 October 2013 Place Sydney The Tribunal refuses to grant an extension of time for the Applicant to apply for review of the Respondent’s objection decision.
.................[sgd]..........................................
Ms G Ettinger, Senior Member
CATCHWORDS
PRACTICE AND PROCEDURE – application for extension of time in which to lodge application for review of objection decision – goods and services tax – refusal to refund GST – claim for refund lodged more than four years after the end of the tax period – merits of case – extension of time refused.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) s 29
Taxation Administration Act 1953 (Cth) s 14ZZC; Sch 1 s 105-55
CASES
Hunter Valley Developments Pty Ltdv Cohen (1984) 3 FCR 344
Re Australian Leisure Marine Pty Ltd and Commissioner of Taxation (2010) 76 ATR 390; [2010] AATA 620
Re Clontarf Development Pty Ltd and Commissioner of Taxation (2010) 79 ATR 540; [2010] AATA 1065
SECONDARY MATERIALS
MT 2009/1, Miscellaneous Taxation Ruling, Miscellaneous Taxes: notification requirements for an entity under section 105-55 of Schedule 1 to the Taxation Administration Act 1953
REASONS FOR DECISION
Ms G Ettinger, Senior Member
11 October 2013
SUMMARY
Mr Alan Hampson has applied to this Tribunal for an extension of time to file his application for review of the objection decision of the Commissioner of Taxation (the Commissioner), dated 31 October 2011. The Commissioner refused a refund to Mr Hampson in regard to his June 2004 quarterly activity statement on the basis that the application was made after 28 July 2008, the four year cut-off date for the June 2004 quarter. At the time the objection decision was made Mr Hampson was notified that he had 60 days to seek a review of the objection decision. Section 29(7) of the Administrative Appeals Tribunal Act 1975 (AAT Act) confers on the Tribunal a discretion to extend the time for the making of an application to the Tribunal for a review of a decision.
The Commissioner, represented by Ms Hammond, opposed the application for an extension of time on the basis that, notwithstanding Mr Hampson was owed GST to the value of $7,659, the substantive application had no prospect of success.
I have had regard to the relevant case law in regard to applications for extensions of time and taken into account relevant sections of the Taxation Administration Act 1953 (TAA). I have accepted the argument of the Respondent Commissioner that there is no discretion which can be exercised in Mr Hampson’s favour to enable him to obtain a GST refund. Accordingly, I am not satisfied that it is reasonable in all the circumstances to exercise the discretion in section 29(7) to grant an extension of time to Mr Hampson to lodge an application for review of the objection decision dated 31 October 2011. My reasons follow.
ISSUE BEFORE THE TRIBUNAL
My task is to decide, pursuant to section 29(7) of the AAT Act, whether I am satisfied that it is reasonable in all the circumstances to extend the time for Mr Hampson to apply to the Tribunal for review of the Commissioner’s objection decision of 31 October 2011.
RELEVANT LEGISLATION
Section 14ZZC of the Taxation Administration Act 1953 (TAA) prescribes a 60 day time limit for the Applicant to make an application to the Tribunal for review of an objection decision made under the TAA.
Subsection 29(7) of the AAT Act empowers the Tribunal to extend the time for a person to apply for review of a decision:
29 Manner of applying for review
…
(7)The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.
The case of Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 provides a set of principles which have been accepted as providing guidance to the Tribunal in considering whether to exercise its discretion to grant an extension of time. Essentially the Court held that:
·the prescribed period is not be ignored;
·consideration should be given as to whether the Applicant has rested on his rights;
·any prejudice to the Respondent is a matter that militates against the grant of an extension;
·the merits of the case.
MR HAMPSON’S CASE
Mr Hampson feels hard done by because he says he established a business of car rentals, and bought a boat in 2003/4, so that he could fly advertising banners over the water. He has experienced bad luck in his business in that the cars he bought were repossessed, his boat was stolen, and what followed was a protracted court case about ownership of the boat. He says as part of the ongoing litigation, he also lost his unit. Mr Hampson has suffered ill health, being bi-polar disorder and depression.
Mr Hampson argued that the four year period did not run from June 2004 to 28 July 2008 as submitted by the Commissioner, because his business was not finalised till 7 September 2009, and the police had impounded his boat. Mr Hampson also argued that he was not making a fresh claim for a refund; he was merely amending an earlier claim.
Mr Hampson told me that due to his illness, and the troubles in his business, he did not get around to lodging tax returns and other documents till 2011, submitting that all his tax returns are now up to date.
On the basis of the Commissioner’s recommendation, Mr Hampson approached the Department of Finance and Deregulation in January 2012 so that he might obtain an act of grace payment.
THE COMMISSIONER’S CASE
The Commissioner acknowledges that Mr Hampson was owed a refund of $7,659 GST, but submits that pursuant to section 105-55(1) of Schedule 1 of the TAA, there is no discretion which can be exercised in his favour because more than four years have elapsed from the time he could have claimed the money. Ms Hammond also told me that the Commissioner had granted Mr Hampson an extension of time to lodge his business activity statement (BAS), but that he did not avail himself of the opportunity of submitting documents within the time frame required and that by lodging his BAS as late as he did, he lost his entitlement to a refund.
THE TRIBUNAL’S CONCLUSIONS
I have noted the submissions of both parties, the relevant legislation and case law. I note that because the Commissioner held that he is bound by section 105-55(1) of Schedule 1 of the TAA, and the fact that Mr Hampson lodged the information for his June 2004 quarterly BAS on 10 June 2011, well outside the four year period allowed, he recommended that Mr Hampson approach the Department of Finance and Deregulation in order to apply for an act of grace payment.
Notwithstanding that the Commissioner in a letter of 25 May 2012 to the Department of Finance and Deregulation was supportive of Mr Hampson being given an act of grace payment, and recognition that Mr Hampson would have been entitled to receive the $7,659 refund if he had lodged his BAS within the required four years, Mr Hampson was refused the payment.
Mr Hampson also contacted his local member whom he found sympathetic. He was provided with an AAT case, Re Clontarf Development Pty Ltd and Commissioner of Taxation (2010) 79 ATR 540; [2010] AATA 1065 which he thought supported his case.
I have noted what Senior Member McCabe stated in that case at [29] in reference to section 105-55(1) of Schedule 1 of the TAA:
A careful reading of that section confirms there is no difference whether the statements were lodged as amended statements or originals. The claim for a refund was first brought to the Commissioner’s notice more than 4 years after the end of the tax period. That is the end of the matter: see Australian Leisure Marine Pty Ltd and FCT (2010) 76 ATR 390 at 393 [17]; 2010 ATC 10-148 at 3530 [17] at [17] per Dr McDermott. The objection decision in relation to those quarterly periods must be affirmed.
He confirms the fact that if a claim for refund is brought to the Commissioner’s notice more than four years after the end of the tax period, (being 29 July 2008 in Mr Hampson’s case), then there is, pursuant to section 105-55(1) of Schedule 1 of the TAA, no discretion available to exercise in the Applicant’s favour.
I, too, am bound by section 105-55(1) of Schedule 1 of the TAA which provides relevantly:
(1) You are not entitled to a refund, other payment or credit to which this subsection applies in respect of a * tax period or importation unless:
(a) within 4 years after:
(i) the end of the tax period; or
(ii) the importation;
as the case requires, you notify the Commissioner (in a * GST return or otherwise) that you are entitled to the refund, other payment or credit; …
In fact Clontarf Development supports the Commissioner’s position, and does not assist Mr Hampson at all.
I have noted also that in Re Australian Leisure Marine Pty Ltd and Commissioner of Taxation (2010) 76 ATR 390; [2010] AATA 620 at [17], Dr McDermott stated:
In my view, s 105-55 of Sch 1 to the Act has substantive effect in that the expiry of the 4-year time-limit extinguishes the right of a taxpayer to notify the Commissioner of an entitlement to the input tax credit. As such the provision certainly denies the entitlement of an entity to an input tax credit. The High Court of Australia has also recognised that taxation legislation which imposes time-limits on amending an income tax assessment to have substantive rather than procedural operation: see McAndrew v FCT (1956) 98 CLR 263; [1956] ALR 1008.
Ms Hammond explored whether Mr Hampson had at least signalled to the Commissioner within the requisite four year period that he was considering applying for the BAS refund, as that might have assisted him. In that regard I considered MT 2009/1, Miscellaneous Taxation Ruling, Miscellaneous Taxes: notification requirements for an entity under section 105-55 of Schedule 1 to the Taxation Administration Act 1953, which states at paragraph 13 that:
A notification that is not by way of an activity statement or revised activity statement need not quantify the amount of the entitlement, provided that the entitlement is identified, as required in paragraph 12 of this Ruling.
I looked closely at a letter from the Applicant to the Commissioner received on 15 March 2007 with regard to a change of address, and his then personal situation. Whilst Mr Hampson made mention of finalising his tax affairs in the letter, I could not see any reference to his first quarter of 2004 BAS. Unfortunately, I find that that letter is not of assistance to Mr Hampson’s case as it does not notify the Commissioner of the entitlement to a refund in accordance with the requirements of MT 2009/1.
In considering whether the discretion in section 29(7) of the AAT Act should be exercised, I find that in this case, the most relevant consideration is the merits of the case. As there is no discretion to refund GST if the Commissioner is not notified of the entitlement to a refund within four years after the end of the tax period, Mr Hampson’s case is without merit, and in the circumstances it is not reasonable to grant an extension of time for him to lodge his application for the review of this decision at the AAT.
DECISION
The Tribunal refuses to grant an extension of time for the Applicant to apply for review of the Respondent’s objection decision.
I certify that the preceding 24 (twenty-four) paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member.
............[sgd]..............................................
Associate
Dated 11 October 2013
Date of hearing 3 October 2013 Applicant In person Advocate for the Respondent Ms V Hammond, Australian Taxation Office
0
4
0