Kodak (Australasia) Pty Limited v The commonwealth of Australia

Kodak (Australasia) Pty Limited sought special leave to appeal to the High Court of Australia against decisions concerning the imposition of sales tax. The dispute centred on the Commissioner of Taxation's assessment of sales tax at a third point in a chain of transactions involving photographic film processing. Kodak argued that amendments made in 1986 to the Sales Tax Assessment Act had the effect of abrogating fundamental concepts of sales tax law and that the Commissioner's assessment was unlawful.

The primary legal issues before the High Court were whether the 1986 amendments to the definition of "manufacture" in the Sales Tax Assessment Act had the effect of abrogating a pre-existing definition of "goods" and fundamental principles of sales tax law. Secondly, the Court was asked to consider the extent to which the decision in *Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation* permitted the implication of new provisions or the exclusion of unamended existing provisions to satisfy a parliamentary intention.

The Court was required to interpret the operation of section 17A of the Sales Tax Assessment Act (No 1), which deems a sale to have occurred when a person manufactures something from goods supplied by a customer and returns it for a price. Kodak's contention was that the Commissioner was incorrectly applying this section to the process of developing exposed film into negatives, arguing that the negative remained the customer's property throughout. The critical point of contention was the definition of "manufacture" as amended in 1986, which included "the processing or treatment of exposed photographic or cinematographic film to produce a negative, transparency or film". Kodak submitted that this amendment, in conjunction with the definition of "goods", created an unintended consequence that undermined established sales tax principles.