Sarroff, John Deputy Commissioner of Taxation

[1997] FCA 398

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	)     No. NG 7068 of 1997
)
GENERAL DIVISION	)

RE:		JOHN SARROFF Debtor
EX PARTE:		DEPUTY COMMISSIONER OF TAXATION Petitioning Creditor
CORAM:	EMMETT J
PLACE:	SYDNEY
DATED:	22 APRIL 1997

EX TEMPORE REASONS FOR JUDGMENT

This is an application for the adjournment to the hearing of a bankruptcy petition brought by the Deputy Commissioner of Taxation against the debtor.  The act of bankruptcy relied upon is failure to comply with a bankruptcy notice based on a judgment in the sum of $105,954.57 in the District Court. 

The petitioner also alleges, and there is evidence to support it, that the debtor is also indebted to the Commissioner in the sum of $61,384.74, consisting of $44,099.58 deducted under Division 2 of Part VI as group tax which has not been forwarded to the Commissioner by the debtor in accordance with Division 2.

The adjournment application was based on three applications which have been made for review of the tax which is the subject of the District Court judgment.  The tax, on the evidence before me, comprises three elements, being prime tax in respect of the years ended 30 June 1987 to 1991 inclusive; additional tax in respect of prime tax for the years ended 30 June 1986 to 1991 inclusive; and additional tax in respect of provisional tax for the years ended 30 June 1987 to 1991. 

The first application is to the Administrative Appeals Tribunal for review of an assessment in respect of the year ended 30 June 1993.  That assessment shows a sum of $74,366.29 in respect of provisional tax.  The submission is made that that sum could include (that is high as it is put) items which are the subject of the judgment. It is said that, notwithstanding that the assessment shows a nil amount for income tax, there is nevertheless a basis for review by the Tribunal that could put in issue the amounts which are the subject of the judgment. Nothing has been said that persuades me that there is any prospect of the review being successful.  The Commissioner relies on the fact that, in any event, there is no right of review of a notice of assessment which shows no tax payable but shows only an assessment in respect of provisional tax. Quite apart from the fact that there is no material advanced as a basis for the conclusion that the amount of the notice of assessment might include the amounts which are the subject of the judgment, there is simply no reason for concluding that the review would in any event be successful.

Second, an application has been made to the Commissioner to waive the additional tax.  The Commissioner's counsel indicated from the bar table that that application had been rejected.  While that is hardly evidence of the fact, there is no reason for me to conclude that there was any prospect of success in the application. 

The third matter concerns an application that was made to the Taxation Relief Board yesterday. If there had been some measure of chance that the application might be successful that might be a ground for adjourning the hearing of the petition. However, once again, nothing was advanced which suggests there was any prospect of success in that application.

What appears to me to be an impenetrable obstacle from the debtor's point of view is the outstanding tax in respect of group tax.  There is no suggestion that any part of that amount is disputed or that there is any basis for disputing that amount.  It seems to me, in those circumstances, therefore, that this is not an appropriate case for an adjournment.

Counsel for the debtor has indicated that there is no answer to the petition if the petition is to be heard today.  On that basis it seems to me that a sequestration order has to be made.

I certify that this and the preceding two pages are a true copy of the Reasons for Judgment of his Honour Justice Emmett.

Associate:

Date:                 22 April 1997

Appearances:

Solicitor for the Creditor:                  Australian Government Solicitor

Counsel for the Debtor:  P. Cook

Solicitor for the Debtor:  John Saroff & Company

Heard:            22 April 1997

Place:              Sydney

Decision:        22 April 1997