Re Softex Industries Pty Ltd

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.