Nestle Australia Ltd v Commissioner of Taxation

Nestle Australia Limited applied to the Federal Court of Australia for a review of a decision by the Commissioner of Taxation not to grant an extension of time for the payment of income tax assessments. The Commissioner sought a stay of an order made on 30 July 1986, which directed that within fourteen days, the Commissioner produce for inspection by Nestle Australia Limited, copies of all documents specified in the order. The central legal issue before the court was whether the Commissioner of Taxation should be granted a stay of the discovery order, pending an application for leave to appeal against the discovery order and an earlier decision of 14 February 1986. The court held that a stay of proceedings ought not to be granted. The Commissioner of Taxation, like any other litigant, is obliged to act promptly and decisively if he wishes to preserve his position. The situation was that the hearing of the principal proceedings had been extensively delayed because of arguments regarding the production of documents. The court made it clear that the granting of a stay of proceedings would be dependent upon a successful application for leave to appeal. The Commissioner had not taken any steps to obtain a hearing of an application for leave to appeal. The court refused the application for a stay of proceedings and ordered that the Commissioner of Taxation pay to Nestle Australia Limited its costs of this application.