S M Ho & K W Loh & T T Low & W W Orr and Commissioner of Taxation (Taxation)

The parties to this proceeding were the applicants, S M Ho & K W Loh & T T Low & W W Orr (the Applicant), and the respondent, the Commissioner of Taxation. The dispute concerned the assessment of Goods and Services Tax (GST) and penalties arising from the Applicant's sale of subdivided properties. The matter was heard by Deputy President F D O'Loughlin of the Administrative Appeals Tribunal.

The legal issues before the Tribunal included whether the sale of certain subdivided lots constituted a supply of a going concern, whether the margin scheme was correctly applied to these sales, and whether default assessments and associated penalties, including a shortfall penalty and a default assessment penalty, were correctly imposed. The Applicant also contended that the sale of the original properties at 404 and 406 Queens Parade were input-taxed supplies.

The Tribunal considered the evidence presented, which consisted solely of documents. It noted that the Applicant had conceded certain errors, including the failure to report rental income and the incorrect claiming of input tax credits. The Tribunal found that the Applicant had not reported GST payable on the sale of two subdivided lots, asserting a nil margin, and had failed to lodge an activity statement when requested. While the Tribunal affirmed the Commissioner's decisions in most respects, it found the imposition of the default assessment penalty to be unjust given the short timeframe and the circumstances. The Tribunal therefore varied the decision by remitting the default assessment penalty by 50%.