Merchant and Commissioner of Taxation

The case of *Merchant and Commissioner of Taxation* concerned an application by Mr Merchant and the corporate trustee of a self-managed superannuation fund (MFT) for an adjournment of proceedings before the Administrative Appeals Tribunal. The proceedings related to decisions by the Commissioner of Taxation to disqualify Mr Merchant and MFT from acting as trustee or responsible officers of a trust. The applicants sought the adjournment pending the outcome of separate income tax objections lodged by Mr Merchant, MFT, and a related entity, GSM, concerning amended income tax and penalty assessments issued by the Commissioner.

The primary legal issue before the Tribunal was whether the disqualification review proceedings should be adjourned until the applicants had exhausted their rights of review in relation to the income tax assessments. The applicants argued that the Commissioner's decisions to disqualify them relied significantly on the Commissioner's contention that Part IVA of the *Income Tax Assessment Act 1936* applied to a BBG Share Transfer, and therefore, the disqualification review was dependent on the determination of the Part IVA issue.

The Tribunal, presided over by Deputy I R Molloy P, rejected the applicants' submissions. While acknowledging that some of the factual circumstances and the Commissioner's reasoning regarding Part IVA of the *Income Tax Assessment Act 1936* were relevant to both the income tax assessments and the disqualification decisions, the Tribunal found that the issues were not the same. The Tribunal reasoned that a decision on whether Part IVA applied to the BBG Share Transfer was not determinative of the matters under review in the disqualification proceedings. The Tribunal emphasised that the disqualification review was a fresh merits review, and the correctness of the Commissioner's Part IVA contention was not a prerequisite for its determination.