Mason and Commissioner of Taxation (Practice and procedure) - [2025] ARTA 567

Mason and Commissioner of Taxation (Practice and procedure) [2025] ARTA 567 (5 May 2025)
Applicant:Brett Mason
Respondent:  Commissioner of Taxation
Tribunal Number:                2024/4004
Tribunal:General Member J Dunne
Place:Melbourne
Date:5 May 2025
Decision:The Application for a Stay is dismissed.

........................[SGND]................................................
General Member J Dunne
Catchwords
PRACTICE AND PROCEDURE - Stay application – substantive proceedings seek review of an objection decision made by the Commissioner of Taxation – whether Tribunal has the power to grant a stay of the impost of the general interest charge – modification of the Administrative Review Tribunal Act 2024 (Cth) by the Taxation Administration Act 1953 (Cth) – stay application dismissed - Tribunal has no power issue a stay of the general interest charge
Legislation
Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth)
Administrative Review Tribunal Act 2024 (Cth) s 32
Income Tax Assessment Act 1997 (Cth) ss 5-15, 328-110
Taxation Administration Act 1953 (Cth) ss 14ZQ, 14ZZB, 14ZZH, 14ZZM, Schedule 1 s 298-30.
Cases
Coshott and Commissioner of Taxation [2013] AATA 822
Iyengar and Commissioner of Taxation [2015] AATA 80
The Trustee for the Confidential Trust and Commissioner of Taxation [2013] AATA 682
Thompson and Commissioner of Taxation [2019] AATA 4678
Statement of Reasons

This is an interlocutory decision about the Applicant’s Application for a Stay dated 21 June 2024.[1] That Application sought that “The interest on the fines from the [ATO] to be frozen while the review comes to a conclusion”.
[1] On 14 October 2024, the Administrative Appeals Tribunal became the Administrative Review Tribunal. Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth) proceedings that were not finalised before 14 October 2024 are continued and finalised by the Administrative Review Tribunal. Anything done in relation to any such proceeding before 14 October 2024 is taken to have been done by the Administrative Review Tribunal.
The Tribunal has concluded it has no power to issue such a stay and the Applicant’s Application for a Stay is dismissed.
Reasons for Decision
The Applicant filed proceedings in this Tribunal[2] on 14 June 2024.
[2] Ibid.
The Applicant’s proceedings sought a review of the Respondent’s Objection Decision dated 24 April 2024. The Respondent’s Objection Decision disallowed the Applicant’s objection to penalty assessments imposed on the Applicant for the income years ended 30 June 2020 and 30 June 2021. The Applicant’s ability to object to the penalty assessments is provided by subsection 298-30(2) of Schedule 1 to the Taxation Administration Act 1953 (Cth) (“TAA”).
Soon after filing proceedings in the Tribunal, the Applicant sought a stay on 21 June 2024. The Stay Application sought that “The interest on the fines from the [ATO] to be frozen while the review comes to a conclusion”. The Respondent opposed the Stay Application by letter dated 12 July 2024.
The Tribunal’s power to issue stays is set out in section 32 of the Administrative Review Tribunal Act 2024 (Cth) (“ART Act”). That provision reads as follows:
32 Reviewable decision continues to operate unless Tribunal orders otherwise
General rule
(1) The making of an application to the Tribunal for review of a reviewable decision does not affect the operation of the decision or prevent the taking of action to implement the decision.
Exception—Tribunal may stay operation or implementation
(2) However, on application by a party to a proceeding for review of a reviewable decision, the Tribunal may make an order staying or otherwise affecting the operation or implementation of the decision if the Tribunal considers that it is desirable to do so for the purpose of ensuring the effectiveness of the review.
(3) The order is subject to any conditions specified in the order.
(4) The order has effect until the decision of the Tribunal on the application for review comes into operation.
(5) Despite subsection (4), if:
(a) the order states that it applies for a period; and
(b) the period ends before the decision of the Tribunal on the application for review comes into operation;
the order has effect until the end of the period.
(6) On application by a party to the proceeding, the Tribunal may, by order, vary or revoke the order.
Preconditions to making, varying or revoking an order
(7) The Tribunal must not make, vary or revoke an order staying or otherwise affecting the operation or implementation of a reviewable decision unless:
(a) the Tribunal has given the parties to the proceeding for review of the decision a reasonable opportunity to make submissions to the Tribunal in relation to the making, variation or revocation of the order; and
(b) the Tribunal has taken into account the interests of any person who may be affected by the review of the decision.
(8) However, paragraph (7)(a) does not prevent the Tribunal making, varying or revoking an order without giving a party an opportunity to make a submission to the Tribunal if the Tribunal is satisfied that it is not practicable to give the party the opportunity.
(9) If the Tribunal makes, varies or revokes an order without giving a party an opportunity to make a submission as mentioned in subsection (8), the order, variation or revocation does not take effect until a notice setting out the terms of the order, variation or revocation is given to the party.
The general power for the Tribunal to issue a stay is impacted by any specific provisions in other legislation. In the case of taxation proceedings, that general power to issue a stay is subject to provisions in the TAA.
In particular, in respect of the reviewable objection decision[3] (here comprising the penalty assessments) that includes subsections 14ZZB(5) and 14ZZB(6) of the TAA which provide:
(5) Section 32 (reviewable decision continues to operate unless Tribunal orders otherwise) of the ART Act does not apply in relation to:
(a) a reviewable objection decision; or
(b) an extension of time refusal decision.
(6) However, despite subsection (5), section 32 (reviewable decision continues to operate unless Tribunal orders otherwise) of the ART Act applies in relation to a reviewable objection decision that relates to a small business taxation assessment decision, subject to the modifications set out in section 14ZZH of this Act.
[3] A “reviewable objection decision” is defined in section 14ZQ in the TAA as “an objection decision that is not an ineligible income tax remission decision”.
Considering subsection 14ZZB(5), the Tribunal’s power to issue a stay under section 32 of the ART Act does not extend to a stay of the reviewable objection decision.[4] In terms of the general interest charge, it is added automatically to the underlying unpaid tax in the reviewable objection decision. This is by virtue of section 5-15 of the Income Tax Assessment Act 1997 (Cth) (“ITAA 1997”) and Part IIA of the TAA. However, the general interest charge is not part of the reviewable objection decision[5] and the general interest charge is not before the Tribunal.
[4] Confirmed in Iyengar and Commissioner of Taxation [2015] AATA 80; The Trustee for the Confidential Trust and Commissioner of Taxation [2013] AATA 682; Coshott and Commissioner of Taxation [2013] AATA 822.
[5]The Trustee for the Confidential Trust and Commissioner of Taxation [2013] AATA 682 at [19].
Section 14ZZM of the TAA provides that the fact a review is pending of a taxation decision “does not interfere with, or affect, the decision and any tax, additional tax or other amount may be recovered as if no review were pending”. This means that the impost of the general interest charge is not impacted by the Applicant’s Application for Review.
Precedent case law on the Tribunal’s stay powers confirms that these provisions and the nature of the general interest charge means that the impost of the general interest charge cannot be stayed by the Tribunal. There is no such power. For example, in Thompson and Commissioner of Taxation [2019] AATA 4678 at [7] Deputy President McCabe said:
The practical effect of those provisions is clear. The Tribunal does not have the power to order a stay in a case like this. We cannot require the Commissioner to stop imposing interest (although the Commissioner has voluntarily agreed to do that in this case) nor can we prevent the Commissioner from undertaking debt recovery proceedings (not that there is any suggestion of him commencing recovery proceedings in this case). The Commissioner will often be prepared to negotiate with the applicant about these matters, as he has done in this case, but we cannot use the stay power to restrain him.
This was also confirmed in The Trustee for the Confidential Trust and Commissioner of Taxation [2013] AATA 682 at [22].
Considering subsection 14ZZB(6) of the TAA, to be a “small business taxation assessment” the definition in section 14ZQ of the TAA must be met. To meet that definition the Applicant must (amongst other things) be a “small business entity.” To be a small business entity the Applicant must meet the definition in section 328-110 of the ITAA 1997. Even if the Applicant did meet that definition (which there is no evidence he does), the Tribunal’s power to issue a stay is subject to section 14ZZH of the TAA.
That provision provides as follows:
14ZZH Limitation on orders staying or affecting reviewable objection decisions relating to small business taxation assessment decisions
(1) This section applies if:
(a) a party to a proceeding for review of a reviewable objection decision that relates to a small business taxation assessment decision applies for:
(i) an order staying or otherwise affecting the operation or implementation of the decision; or
(ii) an order varying or revoking such an order; and
(b) the party requesting the order is not the Commissioner of Taxation.
(2) Despite the ART Act, the ART must not make the order unless the party satisfies the ART that, when considered in the context of both the particular circumstances of the decision under review and the overall taxation system, the application for review and the request for making the order are not frivolous, vexatious, misconceived, lacking in substance or otherwise intended to unduly impede, prejudice or restrict the proper administration or operation of a taxation law.
Note 1: The kind of orders that the ART may make include the following:
(a) an order directing the Commissioner not to sue in a court to recover a specified amount relating to the reviewable objection decision (see subsection 255‑5(2) of Schedule 1 to this Act);
(b) an order directing the Commissioner to offer or accept payment of a liability relating to the reviewable objection decision by instalments under a specified arrangement (see section 255‑15 of Schedule 1 to this Act);
(c) an order directing the Commissioner not to issue one or more written notices to specified third parties who owe or may later owe money to the applicant as a means of recovering a liability relating to the reviewable objection decision (see section 260‑5 of Schedule 1 to this Act).
Note 2: However, an order that would materially and permanently alter the decision under review would not be an order staying or otherwise affecting the operation or implementation of such a decision for the purpose of securing the effectiveness of the hearing and determination of the application for review. For example:
(a) an order the Commissioner to defer the time at which a tax liability becomes due and payable; or
(b) an order directing the Commissioner to remit the imposition of interest charges on unpaid liabilities that are due and payable.
The Applicant’s Application for a Stay does not impact the implementation or operation of the small business taxation assessment decision per subparagraph 14ZZH(1)(a)(i) (even assuming there was a small business taxation assessment decision). The Application for a Stay is focussed on the general interest charge. So, even if subsection 14ZZB(6) could apply (which is not accepted because there is no evidence the Applicant meets the necessary small business definitions) it does not override section 14ZZM of the TAA and it does not provide the Tribunal with power to issue a stay of the general interest charge.
Conclusion
The Application for a Stay is dismissed. The Tribunal has no power to issue the stay sought by the Applicant.