San Remo Heights Pty Ltd and Commissioner of Taxation (Taxation)

San Remo Heights Pty Ltd (the applicant) sought review of a decision by the Commissioner of Taxation to include goods and services tax (GST) on the sale of two subdivided lots of land. The applicant had acquired a parcel of land in 1962 and, over an extended period, undertook several subdivisions and sales of lots. The Commissioner assessed GST on the sale of two specific lots, 3 Bergin Grove and 5 Bergin Grove, which were sold in 2018. The applicant also carried on rental property and sheep grazing businesses.

The primary legal issue before the Tribunal was whether the sales of the two subdivided lots constituted taxable supplies, meaning they were made in the course or furtherance of an "enterprise" as defined by the GST Act. Specifically, the Tribunal had to determine if the subdivision and sale activities constituted an enterprise, either independently or as part of the applicant's existing rental and grazing enterprises, and if the sales were made in furtherance of such an enterprise.

The Tribunal accepted that for a supply to be taxable, it must be made in the course or furtherance of an enterprise. While the applicant argued that its only enterprises were property rental and grazing, and that the land sales were unrelated to these, the Tribunal found no connection between the sales and those established enterprises. However, the Tribunal considered whether the subdivision and sale activities themselves constituted a separate enterprise. Despite the long periods between subdivisions and the applicant's stated motivations for selling, the Tribunal found no evidence to exclude the conclusion that these activities were undertaken for a commercial purpose. The Tribunal noted the series of subdivisions and sales, the degree of repetition and scale, and the absence of evidence to the contrary, leading to the conclusion that the activities were carried out for a commercial purpose, thus constituting an enterprise.