Liverpool and London and Globe Insurance Company Limited v Federal Commissioner of Taxation

The High Court of Australia considered an appeal by the Liverpool and London and Globe Insurance Company Limited against an assessment made by the Federal Commissioner of Taxation under the War-time Profits Tax Assessment Act 1917-1918. The dispute concerned the Commissioner's power to amend or add to an assessment after an objection to that assessment had been allowed and the original assessment cancelled.

The central legal issue before the Court was whether, following the allowance of an objection and the cancellation of an assessment under section 22 of the War-time Profits Tax Assessment Act 1917-1918, the Commissioner retained the power to issue a further or amended assessment for the same tax period.

The Court reasoned that the effect of allowing an objection under section 22 was to nullify the original assessment entirely. Once an assessment was cancelled, it ceased to exist for all purposes. Therefore, the Commissioner was not merely amending an existing assessment but was required to make a fresh assessment if he believed one was warranted. The Court held that the Commissioner did possess the power to make a new assessment after the cancellation of the original one, as the Act did not preclude this. The appeal was dismissed.