Re Softex Industries Pty Ltd

Case [2001] QSC 377

SUPREME COURT OF QUEENSLAND

CITATION: Softex Industries Pty Ltd, Re [2001] QSC 377
PARTIES: IN THE MATTER OF SOFTEX INDUSTRIES PTY LTD ACN 010 152 913
SOFTEX INDUSTRIES PTY LTD ACN 010 152 913
(applicant)
v
COMMISSIONER OF TAXATION
(respondent)
FILE NO: S6219 of 2001
DIVISION: Trial Division
DELIVERED ON: 5 October 2001
DELIVERED AT: Brisbane
HEARING DATE: 7 September 2001
JUDGE: Mullins J
ORDER: The respondent’s statutory demand for payment served on the applicant on 19 June 2001 be set aside.
CATCHWORDS:

CORPORATIONS – PRACTICE AND PROCEDURE – STATUTORY DEMAND - application to set aside statutory demand – demand issued by Commissioner of Taxation for payment of debt for outstanding sales and income tax – applicant precluded from relying on s 459H of Corporations Act 2001 (Cth) – whether existence of application for special leave to appeal to High Court in relation to sales tax refund relevant to the exercise of discretion under s 459J(1)(b) of the Act – whether applicant has arguable estoppels as to liability for disputed sales tax and penalties – whether existing AAT proceeding relating to disputed income tax relevant to exercise of discretion under S459J(1)(b) of the Act – whether it was oppressive for the amount of the disputed income tax to be included in the claim made in the statutory demand

Corporations Act 2001 (Cth) s 459F, s 459H, s 459J
Income Tax Assessment Act 1936 (Cth)
Sales Tax Assessment Act 1992 (Cth)
Taxation Administration Act 1953 (Cth)

Chippendale Printing Co Pty Ltd v Deputy Commissioner of Taxation (1995) 55 FCR 562
Collins v The Queen (1975) 133 CLR 120
Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454
FJ Bloemen Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 360
Graywinter Management Pty Ltd v Deputy Commissioner of Taxation (1996) 22 ACSR 636
Hoare Bros Pty Ltd v Deputy Commissioner of Taxation (1996) 62 FCR 302
Moutere Pty Ltd v Deputy Commissioner of Taxation (2000) 34 ACSR 533
Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452
COUNSEL: SL Doyle SC  and DG Clothier for the applicant
JA Logan SC and CD Coulsen for respondent
SOLICITORS: Minter Ellison for the applicant
Australian Taxation Office for the respondent

  1. MULLINS J:  On 19 June 2001 the Commissioner of Taxation (“the respondent”) served on Softex Industries Pty Ltd (formerly Cosco Holdings Pty Ltd) (“the applicant”) a form 509H creditor’s statutory demand for payment of debt in respect of a total sum of  $15,302,967.42.  The applicant filed the application on 10 July 2001 to set aside the statutory demand. 

  1. The amount of $15,302,967.42 comprises the following components:

Sales Tax (1993-2000) $10,337,091.09
Income Tax for year ended 30 June 1994 2,917,255.51
Income Tax for year ended 30 June 1995 1,118,196.02
Income Tax for year ended 30 June 1999 31,368.17
Fringe Benefits Tax for year ended 30 June 2000 34.92
Tax Instalment Deductions for period 20 March 2000 to 30 June 2000 1,211.84
Business Activity Statement to period…

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AGLC
Re Softex Industries Pty Ltd [2001] QSC 377
Case
[2001] QSC 377
Decision Date

CaseChat Overview and Summary

Softex Industries Pty Ltd applied to the Federal Court for the setting aside of a statutory demand issued by the Commissioner of Taxation for outstanding sales and income tax. The applicant sought relief from the court, arguing that the statutory demand was oppressive and should not be enforced. The legal issues before the court involved determining whether the applicant was precluded from relying on certain sections of the Corporations Act 2001 (Cth), specifically sections 459H and 459J, and whether the applicant had arguable estoppels as to the liability for the disputed sales tax and penalties. Additionally, the court had to consider whether the existence of an application for special leave to appeal to the High Court in relation to a sales tax refund and an existing Administrative Appeals Tribunal (AAT) proceeding concerning the disputed income tax were relevant to the exercise of the court's discretion under section 459J(1)(b) of the Act.

The court examined the applicant's contention that it was precluded from relying on section 459H due to the ongoing application for special leave to appeal to the High Court and the existing AAT proceeding. The court found that these factors did not preclude the applicant from seeking relief under section 459J. Regarding the existence of arguable estoppels, the court held that the applicant had presented sufficient evidence to support the argument that it had arguable estoppels concerning the liability for the disputed sales tax and penalties. Furthermore, the court determined that the inclusion of the disputed income tax in the statutory demand was oppressive and therefore relevant to the exercise of the court's discretion under section 459J(1)(b).

Based on the above findings, the court exercised its discretion to set aside the statutory demand issued by the Commissioner of Taxation. The court concluded that the applicant had demonstrated that the statutory demand was oppressive and should not be enforced. Consequently, the court ordered that the statutory demand for payment served on Softex Industries Pty Ltd on 19 June 2001 be set aside.

Orders

Orders of the court

The respondent’s statutory demand for payment served on the applicant on 19 June 2001 be set aside.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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