Jarvis-Lavery and Commissioner of Taxation (Taxation)

The proceeding before Deputy President Bernard J McCabe concerned an appeal by Mr Jarvis-Lavery against objection decisions made by the Commissioner of Taxation. The dispute centred on whether Mr Jarvis-Lavery had discharged his onus of proving that assessments of income tax and Goods and Services Tax (GST), including administrative penalties, were excessive. The Commissioner had increased Mr Jarvis-Lavery's assessable income based on unexplained bank account entries and disallowed various input tax credit claims.

The court was required to determine whether Mr Jarvis-Lavery had satisfied the Tribunal on the balance of probabilities that the Commissioner's assessments were excessive. Specifically, in relation to GST, the court needed to ascertain if Mr Jarvis-Lavery had proven that certain acquisitions from an associated entity were genuinely made and paid for, entitling him to input tax credits, and whether other claimed acquisitions were indeed for business purposes rather than private use. The court also considered the reliability of evidence presented by Mr Jarvis-Lavery, particularly concerning the use of his bank accounts as a conduit for payments related to a debt owed to him.

The court found that the evidence presented, including voluminous reconciliations and supporting financial statements, was insufficient to enable a calculation of the taxpayer's assessable income. The issues with the reconciliation, coupled with bank deposits significantly exceeding the assessed amount, meant the court could not be satisfied that the income tax assessment was excessive. Regarding the GST, the court noted the difficulties arising from Mr Jarvis-Lavery's lack of accurate records and his subsequent claims that the true position differed from his lodged returns. The court also highlighted the unreliability of evidence provided by a Mr Reason, whose responses regarding the "careful analysis" of documents were evasive and unconvincing, leading the court to conclude that the burden of proof had not been discharged.

Consequently, the court affirmed the Commissioner's objection decisions, finding that Mr Jarvis-Lavery had failed to discharge the burden of proving that the assessments were excessive.