Hughes v Phillips - [1948] HCA 1

HUGHES AND OTHERS

APPELLANTS, PHILLIPS

RESPONDENT.

ON APPEAL FROM THE SUPREME COURT OF Taxation-Income tax Return- " False in a particular "_Net income understated

Offence-Information-Averments-Sufficiency-Income - Tax Assessment Act

1936-1946 (No. 27 of 1936-No. 6 of 1946), 88. 227, 243. SYDNEY,

An income tax return which contains a mis-statement of the taxpayer's Apr. 20, 21.

net income is " false in a particular' " within the meaning of S. 227 (1) of the Income Tax Assessment Act 1936-1946. "Particular in that section is not confined to the subordinate or constituent elements which go to make up the

Ex parte Wood; Re Williams (1932) 32 S.R. (N.S.W.) 177; 49 W.N. (N.S.W.) 40, overruled; Ramm v. Gralow (1931) Q.S.R. 351, distinguished.

Decision of the Supreme Court of New South Wales (Full Court): Ex parte Phillips Re Hughes (1947) 48 S.R. (N.S.W.) 86; 65 W.N. 15, reversed.

APPEAL from the Supreme Court of New South Wales.

In an information laid under S. 227 of the Income Tax Assessment Act 1936-1946 by William Malachy Brady, an officer of the Depart- ment of Taxation, on behalf of Joseph William Robert Hughes the Deputy Commissioner of Taxation in and for the State of New South Wales, it was alleged that on 28th October 1943, at Sydney, the defendant, Herbert Lewis Phillips, of 27 Shaw Street, Yass picture showman, made "a return of income derived from all sources in and out of Australia during the twelve months from 1st July 1942 to 30th June 1943 which said return was false in a particular, to wit, the amount of £226 returned by the said defendant therein as net income from his business of a motion picture exhibitor

75 CLR 437

and commissions, was understated by an amount of £722, contrary to the Act in such case made and provided."

Section 227 of the Income Tax Assessment Act 1936-1946, imposes a penalty on any person who makes or delivers a return which is false in any particular."

At the hearing the prosecutor merely tendered the information in evidence and relied on the averments Income Tax Assessment Act 1936-1946, 8. 243.

It was submitted on behalf of the defendant: (i) that the informa- tion was bad in that it disclosed no offence (ii) that the information was bad in that it did not charge falsity in any particular; (iii) that the information was bad in that it did not sufficiently indicate particulars of the alleged falsity in a particular; and (iv) that the summons was bad for the same reason.

The magistrate held that the information disclosed a prima-facie case because it did refer to the particular of a net income, the sources from whence that income was derived, and the amount by which that income had been understated.

Counsel for the defendant thereupon called for and tendered the income tax return for the year in question and closed his case.

The return contained two items only of income, both of them appearing under the heading: "Income…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hughes v Phillips

Details

AGLC: Hughes v Phillips [1948] HCA 1
Case: [1948] HCA 1
Decision Date: 21 April 1948

CaseChat Overview and Summary

The High Court of Australia heard an appeal from the Supreme Court of New South Wales concerning an income tax offence. The appellant, the Deputy Commissioner of Taxation, sought to overturn a decision that had made absolute an order nisi for statutory prohibition, quashing the conviction of the respondent, Herbert Lewis Phillips, for making a false income tax return. The information laid against Mr. Phillips alleged that his return for the 1942-1943 financial year was false in a particular, specifically that his stated net income of £226 from his motion picture exhibitor business and commissions was understated by at least £722.

The central legal issue before the High Court was the interpretation of the phrase "false in any particular" as used in s 227(1) of the *Income Tax Assessment Act 1936-1946*. Specifically, the court had to determine whether a misstatement of a taxpayer's total net income in a return constituted being "false in a particular" within the meaning of the section, or if "particular" was confined to subordinate or constituent elements of the return. This question arose from differing interpretations by lower courts, including the Supreme Court of New South Wales which had followed previous decisions suggesting that a misstatement of net income was not a "particular" in this context.

The High Court, in allowing the appeal, reasoned that the phrase "false in any particular" should be interpreted broadly to mean "false in any respect." Consequently, a misstatement of the net income, which is a specific and definite figure presented in the return, amounts to the return being false in a particular. The Court found that the information sufficiently stated the charge by identifying the specific figure of net income and the extent of its understatement, thereby alleging falsity in a particular. The previous decision of *Ex parte Wood; Re Williams* was overruled, and the decision of the Supreme Court of New South Wales was reversed. The conviction of the respondent was restored, and the appellants were ordered to pay the respondent's costs of the appeal.

Orders