Schachna v Commissioner of State Revenue
[2015] VSC 7
•29 January 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
TAXATION LIST
S CI 2014 5888
| LIONEL SCHACHNA | Plaintiff |
| v | |
| COMMISSIONER OF STATE REVENUE | Defendant |
---
JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 8 December 2014 |
DATE OF JUDGMENT: | 29 January 2015 |
CASE MAY BE CITED AS: | Schachna v Commissioner of State Revenue |
MEDIUM NEUTRAL CITATION: | [2015] VSC 7 |
---
TAXATION - Duties – Assessment of duty – When notice of assessment served under the Taxation Administration Act 1997 – Whether time in which to object to assessment runs from time copy notice of assessment provided to taxpayer – Taxation Administration Act 1997, ss 8, 9, 14, 96, 97, 99, 100, 106, 125, 125A and 127.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T.M. Grace | Arnold Bloch Leibler |
| For the Defendant | Mr C.J. Horan | Solicitor for the Commissioner of State Revenue |
TABLE OF CONTENTS
Background......................................................................................................................................... 1
Agreed questions................................................................................................................................ 3
Applicable legislation........................................................................................................................ 4
Assessments................................................................................................................................... 4
Service............................................................................................................................................. 5
Objections, Reviews and Appeals.............................................................................................. 6
Service of the Assessment................................................................................................................. 7
The SRO letter of 20 February 2014................................................................................................ 9
Period for objection has expired................................................................................................... 10
Conclusion and orders.................................................................................................................... 15
HIS HONOUR:
Background
In this proceeding, the plaintiff seeks relief in the nature of mandamus, for an order that the Commissioner treat his Objection as an appeal and cause the appeal to be set down for hearing in this Court under the provisions of ss 106(1)(b), (2)(b) and (3) of the Taxation Administration Act 1997 (‘TAA’).
By Notice of Assessment No 447668 dated 30 August 2007 (‘the Assessment’), the plaintiff was assessed to duty in respect of an acquisition of shares in a land rich company, Harrimar Holdings Pty Ltd, on 5 July 2004. The Assessment was for a total amount of $679,863, comprising duty, penalty tax and interest, which was payable by 1 October 2007.
The Assessment was, on 26 September 2007, served by post to the last address of the plaintiff known to the Commissioner, namely, Unit A, 7 Lynedoch Avenue, St Kilda East, Victoria, 3183.
By letter dated 20 February 2014, the State Revenue Office demanded payment of the outstanding Assessment, together with further accrued interest. A copy of the Assessment was enclosed with the letter dated 20 February 2014. Following this demand, on or about 7 March 2014, the Commissioner commenced a proceeding in the Magistrates’ Court seeking recovery of the debt arising under the Assessment. This proceeding was subsequently transferred to this Court.
The plaintiff’s solicitors, by letter dated 28 March 2014, purported to lodge with the Commissioner a notice of objection to the Assessment. By letter dated 3 April 2014, the State Revenue Office advised the plaintiff’s solicitors that the letter dated 28 March 2014 would be treated as an application under s 100 of the TAA for permission to lodge an objection outside the 60 day period provided for the lodgement of an objection to an assessment under the provisions of s 99 of the TAA. The State Revenue Office determined that the Assessment had been served on the plaintiff on 26 September 2007 pursuant to the service of documents provisions of the TAA, namely, ss 125 and 125A.
By letter dated 14 April 2014, the plaintiff’s solicitors requested confirmation that the Commissioner would treat the letter, dated 28 March 2014, as an objection lodged in accordance with s 99 of the TAA, and proceed to determine the objection under s 101 of that Act. The plaintiff’s solicitors stated in that letter that ‘If the delivery of the copy of the notice of assessment first took place on about 20 February 2014, the objection against that “assessment” has clearly been lodged within 60 days of the date of delivery (service) of that assessment’.
In response, a delegate of the Commissioner determined, on 25 June 2014, that the Assessment had been served on the plaintiff on 26 September 2007 and decided to refuse permission to lodge an objection outside the 60 day period provided for under s 99 of the TAA, pursuant to the provisions of s 100 of that Act. Moreover, on 29 July 2014, a delegate of the Commissioner confirmed the decision that the Assessment was served on 26 September 2007, and considered that there was no reason to amend the decision to refuse permission to lodge an objection out of time.
The plaintiff’s solicitors, by letter dated 22 August 2014, requested the Commissioner to treat the purported ‘objection’, constituted by the letter dated 28 March 2014, as an appeal and cause it to be set down for hearing at the next sittings of this Court, pursuant to s 106 of the TAA. In response, by letter dated 9 September 2014, the State Revenue Office advised the plaintiff’s solicitors that, in the absence of a decision to permit the plaintiff to lodge an objection under s 100 of the TAA, the letter dated 28 March 2014 was not a valid objection capable of being referred to this Court under s 106 of the TAA.
The validity of the Assessment is assumed for the purposes of this proceeding. Its validity is, however, challenged directly in other proceedings in this Court.[1]
[1]Proceeding S CI 2014 05190.
It is now common ground and conceded that the Assessment was validly served in September 2007. Consequently, in broad terms, the issue to be determined now is whether, as the plaintiff contends, provision of a copy of the Assessment with the letter from the State Revenue Office, dated 20 February 2014, constituted the service of a fresh assessment with the result that the plaintiff is entitled, as of right, to object to that assessment under the provisions of the TAA.
Agreed questions
More particularly, for the purpose of the present proceeding, the parties agreed a ‘Statement of Questions Arising for Determination in the Proceeding’, in the following terms:
1.The Plaintiff seeks ‘[a]n order in the nature of mandamus, ordering the Defendant to treat the Plaintiff’s Objection dated 28 March 2014 against the Assessment as an appeal and to cause it to be set down as an appeal for hearing at the next sittings of this Honourable Court, as required by section 106(3) of the Taxation Administration Act 1997 (TAA).’
2.In order to determine whether the Defendant has an obligation under s 106(3) of the TAA, the following questions arise for determination:
(a)Was the letter dated 28 March 2014 from the Plaintiff’s solicitors to the Defendant (Exhibit JM-5 to the Affidavit of John Mengolian sworn 5 November 2014) (the March 2014 letter) an objection ‘lodged with the Commissioner within 60 days after the date of service of the notice of the assessment … on the taxpayer’ within the meaning of s 99(1) of the TAA?
(b) For such purposes:
(i)Did the delivery of the letter dated 20 February 2014 from the Defendant to the Plaintiff enclosing a copy of Notice of Assessment No 447668 (Exhibit JM-1 to the Affidavit of John Mengolian sworn 5 November 2014) (the February 2014 letter) amount to ‘service’ of the notice of the assessment for the purposes of the TAA?
(ii)Did s 99(1) of the TAA permit the Plaintiff to lodge an objection within 60 days after the date of service of the February 2014 letter, or did s 99(1) only permit the Plaintiff to lodge an objection within 60 days after service of the notice of assessment on 26 September 2007, subject to the exercise of the discretion by the Commissioner under s 100?
3.For the purposes of answering the questions set out above:
(a)The parties agree that, on 26 September 2007, Notice of Assessment No 447668 was served by post addressed to the Plaintiff at the last address of the Plaintiff known to the Commissioner in accordance with ss 125 and 125A of the TAA (Affidavit of Phillip Babic, affirmed 2 December 2014, para 4).
(b)The parties agree that, in the light of the agreement that service was effected on 26 September 2007, it is unnecessary for the Court to determine whether the Plaintiff received Notice of Assessment No 447668 in or about September 2007 or whether the Plaintiff first received, or first became aware of, the Assessment in or about February 2014.
(c)The validity of the Assessment is assumed for the purpose of this proceeding.
Applicable legislation
Assessments
Section 8 of the TAA empowers the Commissioner to make an assessment of tax liability for a taxpayer. The Commissioner is required, under s 14(1) of the TAA, to serve a notice of assessment on the taxpayer once an assessment has been made. The assessment must be expressed to be an assessment of liability to tax and to show the amount of tax assessed.[2] The tax assessed is payable on or before the date specified in the notice of assessment.
[2]TAA s 14(2).
The Commissioner may withdraw an assessment ‘at any time within five years after the date of service of the notice of assessment’.[3] On the withdrawal of an assessment, the Commissioner must serve a notice of withdrawal on the taxpayer.[4] Provision is made for re-assessment under s 9 of the TAA. The Commissioner’s power to re-assess tax liability under the provisions of s 9(3) is, however, restricted. There is a prohibition on re-assessment of a tax liability more than five years after the initial assessment, subject to a number of specified exceptions.[5]
[3]TAA s 13.
[4]TAA s 14(1).
[5]TAA s 9(3).
An important provision in the present context is s 127 of the TAA, which provides for evidence of an assessment. The section provides:
127 Evidence of assessment
Production of a notice of assessment, or of a document signed by the Commissioner purporting to be a copy of a notice of assessment, is—
(a)conclusive evidence of the due making of the assessment; and
(b)conclusive evidence that the amount and all particulars of the assessment are correct, except in objection, review or appeal proceedings (in which it is proof in the absence of evidence to the contrary).
The utility of a conclusive evidence provision of this type in the context of legislation like the TAA was the subject of comment by Pagone J in Bayview Concepts Pty Ltd v Commissioner of State Revenue:[6]
In other words, one category of challenge is put beyond challenge in all disputes; the other is capable of being challenged in proceedings contemplated by the Act. There are sound policy reasons for that to be so, and it is important that the courts should give effect to those sound policy reasons.
Although it is not necessary in the present context to dwell upon the policy reasons underlying these provisions, it is relevant to examine the provisions themselves which, in my view, demonstrate that although a distinction is drawn by the legislature between what might be described as the assessment itself, which is the product of the exercise of the power of assessment by the Commissioner under s 8 of the TAA, and the notice of assessment (which notice is required to be served upon the taxpayer by the Commissioner under s 14(1) of the TAA), it is the assessment itself which is foundational and critical to the scheme of the Act. A distinction is also drawn between an original notice of assessment and a copy of such notice - but this does not affect this foundational and critical position.
[6][2009] VSC 568, at [3].
An examination of these provisions leads me to the view that the Commissioner’s contention that these provisions are consistent with an underlying premise that there is a single date of service, by reference to which the time periods for re-assessment or withdrawal of an assessment may be ascertained is correct.
Service
The service of documents by the Commissioner is provided for in ss 125 and 125A of the TAA, as follows:
125 Service of documents by Commissioner
(1)A document authorised or required to be served on or given to a person by the Commissioner for the purposes of a taxation law may be served on or given to the person—
…
(c)by post addressed to the person at the last address of the person known to the Commissioner (including, in the case of a body corporate, the registered office or a business address of the body corporate); or
125A When is service effective?
(1)For the purposes of a taxation law, a document must be taken, unless the contrary is proved, to have been served on or given to a person by the Commissioner—
…
(b)in the case of posting-2 business days after the day on which the document was posted;
…
The effect of these provisions in the present circumstances does not arise having regard to the plaintiff’s concession that there was effective service of the Assessment in September 2007. Nevertheless, it is pertinent to observe that these provisions are facilitative and would apply equally to any document which the Commissioner is authorised to serve or required to serve under the TAA. This would include, as the preceding provisions discussed indicate, both a notice of assessment and any copy of the notice of assessment. The reach of these provisions in both respects does not, however, provide any support for the plaintiff’s position having regard to the other provisions of the TAA which have been and are considered below.
Objections, Reviews and Appeals
Under s 96(1) of the TAA, a taxpayer may lodge a written objection with the Commissioner if the taxpayer is dissatisfied with an assessment. Section 97 of the TAA makes provision with respect to the grounds for objection, and s 98 provides that the objector has the onus of proving the objector’s case. Sections 99 and 100 of the TAA have the effect of limiting the time within which a taxpayer must lodge an objection, but with a discretionary power in the Commissioner to permit lodgement of an objection out of time. These provisions are as follows:
99 Time for lodging objection
(1)An objection must be lodged with the Commissioner within 60 days after the date of service of the notice of the assessment or decision on the taxpayer, except as provided by section 100.
(2)An objection is taken to have been lodged with the Commissioner when it is received by the Commissioner.
100 Objections lodged out of time
(1)The Commissioner may permit a person to lodge an objection after the 60-day period.
(2)The person seeking to so lodge the objection must state fully and in detail, and in writing, the circumstances concerning and the reasons for the failure to lodge the objection within the 60-day period.
(3)The Commissioner may grant permission unconditionally or subject to conditions or may refuse permission.
(4)A decision by the Commissioner under this section to refuse permission or to impose conditions on permission is a non-reviewable decision.
(5)This section does not apply to an objection referred to in section 96(1)(ca).
Service of the Assessment
The Commissioner addressed the effect of the service provisions of ss 125 and 125A of the TAA and the operation of ss 96(1), 99(1) and 100 in the present circumstances, as follows:[7]
[7]Outline of Submissions of the Commissioner of State Revenue (2 December 2014), [25]-[27].
25.The Plaintiff does not dispute that the Assessment was served on him by post on 26 September 2007 in accordance with ss 125 and 125A of the TAA.[8] Section 125 does not require personal service. The Plaintiff concedes that he is unable to prove non-delivery of the Assessment to his St Kilda East address in September 2007.[9] There is no evidence of non-delivery to that address. Even if the Plaintiff could establish that he did not personally receive the Assessment at that time, the service by post would remain valid and effective.[10] As the High Court stated in Fancourt v Mercantile Credits Ltd in relation to analogous provisions:[11]
[8]See Outline of Submissions of the Plaintiff (21 November 2014), [8].
[9]Outline of Submissions of the Plaintiff (21 November 2014), [8]-[9].
[10]Compare Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 95-97; see also Skalkos v T & S Recoveries Pty Ltd (2004) 141 FCR 107 at 113-116 [I5]-[26]; Commissioner of Taxation v Willis (2007) 210 FLR 279 at 286 [34].
[11](1983) 154 CLR 87 at 97.
`... provided that delivery is not disproved, the fact of non-receipt does not displace the result that delivery is deemed to have been effected at the time at which it would have taken place in the ordinary course of the post.’
26.Service of the notice of assessment gives rise to an obligation to pay the amount of the tax assessed on or before the day specified in the notice.[12] Such an obligation or liability arises irrespective of whether or not the notice of assessment has actually come to the notice of the taxpayer.[13]
27.Service of the notice of assessment also enlivens the taxpayer’s right to lodge a written objection under s 96(1) of the TAA, provided that the objection must be `lodged with the Commissioner within 60 days after the date of service of the notice of the assessment’. The use of the definite article in s 99(1) — ‘the date of service’ — confirms that the provision is addressed to a single fixed date from which the time for objection is to be calculated. Similarly, s 100 deals with permission to lodge an objection ‘after the 60-day period’, which again contemplates a single objection period.
In view of the concession as to service in September 2007, it is not necessary to comment further in relation to the effect of the service provisions of the TAA. These provisions are, however, relevant in the sense that they need to be viewed as part of the overall picture of the provisions and operation of the relevant TAA provisions. Moreover, they do not detract from the effect of the language adopted by the legislature in ss 99 and 100 of that Act. In the latter respect, I am referring to the use of the definite article in s 99(1) and s 100(1) of the TAA. I accept the Commissioner’s contention that the use of the word ‘the’ in the context of these provisions is of significance in the present context.
[12]TAA, s 14(4); compare Bagatol v Federal Commissioner of Taxation (1963) 109 CLR 243 at 251 -252.
[13]Compare Deputy Commissioner of Taxation v Taylor [1983] 2 NSWLR 139 at 143 (Lee J).
The effect of these provisions is, in my view, that for the purposes of ss 99 and 100, there is only one notice of assessment, that is the notice the product of the exercise of the Commissioner’s power of assessment under s 8 of the TAA, and that unless that assessment is withdrawn under s 13 of the TAA and replaced by a fresh notice of assessment under the re-assessment powers conferred on the Commissioner under the Act, it is the service of this notice of assessment which triggers the operation of s 99 and, if necessary, the operation of s 100.
Quite apart from the language adopted by the legislature, the inconvenience and uncertainty for both taxpayers and the Commissioner were the position otherwise is readily apparent.
In terms of objections and the exercise of the Commissioner’s discretion with respect to objections lodged out of time, the difficulties with the alternative interpretation of these provisions contended for by the plaintiff is made clear by these proceedings themselves. If the position is that under ss 99 and 100 the service of, what might be termed, the original notice of assessment and any further copy of that notice has equal force and effect as the trigger for the purposes of ss 99 and 100, then, interpreting TAA provisions consistently as a whole, other consequences may follow – consequences which may also be prejudicial to taxpayers. For example, it is at least arguable that the service of a copy of a previously served notice of assessment would also be relevant in terms of the calculation of the five year period within which the Commissioner may make a re-assessment under the provisions of s 9(3) of the TAA.
It is against this legislative background that I turn now to consider the effect of the letter from the State Revenue Office to the plaintiff dated 20 February 2014, which referred to the outstanding notice of assessment and enclosed ‘a copy of the assessment’.
The SRO letter of 20 February 2014
As indicated previously, the difference between the parties in relation to the effect of this letter is that the plaintiff contends that it is to be regarded as service of a notice of assessment within the meaning of s 14(1) of the TAA, whereas the Commissioner contends that the letter provided merely a further copy of the notice of assessment and cannot constitute service of the Assessment for the purposes of these provisions of the Act.
As has already been observed, s 127 of the TAA draws a distinction between an original notice of assessment and a copy of the notice of assessment. Moreover, in relation to analogous provisions in Commonwealth tax legislation, ‘the contemplation is plain … that the notice itself is a different thing to a copy’.[14] Thus, in my view, it must follow that the provision by the State Revenue Office to a taxpayer of a copy of a notice of assessment, whether as a courtesy or in response to a request by the taxpayer, is an event quite different from the service of the original notice of assessment.
[14]Re Beavis Brothers Construction Pry Ltd (in liq) (1987) 10 NSWLR 1 at 11 (Bryson J).
In this context, the plaintiff relies upon the decision in Deputy Commissioner of Taxation (Vic) v Ericksen[15] for the proposition that posting a copy of a notice of assessment to a taxpayer can constitute service of a notice of assessment. However, as the Commissioner observes in his submissions, the facts of that case are significantly distinguishable from the present case, in two important respects. First, in Ericksen, the photocopies had been posted to alternative addresses of the taxpayer at the same time as the original notices of assessment were posted to his ‘address for service’. Secondly, the court in Ericksen proceeded on the basis that service of the notice of assessment by post to the address for service was ineffective because the envelope was returned unopened.[16] For these reasons, I am of the opinion that the decision in Ericksen does not support the plaintiff’s contentions.
[15](1988) 19 ATR 980.
[16](1988) 19 ATR 980 at 982. As acknowledged in the Plaintiff’s Outline of Submissions (fnt 6), O’Bryan J seems to have incorrectly assumed that the presumption of due service could be rebutted by proving that service by post did not give notice to the taxpayer, rather than having to prove non-delivery to the relevant address.
Period for objection has expired
The Commissioner also argues against the plaintiff’s position on the basis that even if the provision of a copy of the assessment with the letter of 20 February 2014 could be regarded as the service of the Assessment for the purpose of s 14(1) of the TAA, the right to lodge an objection under s 96(1) and 99(1) of the TAA ceased to exist upon the expiry of the 60 day period after service of the notice of assessment on 26 September 2007, except as provided by s 100 of the TAA. Accordingly, it follows that the plaintiff no longer has a right to lodge an objection, unless he seeks and obtains permission under s 100 to lodge an objection after the 60 day period. Moreover, the Commissioner submits that in seeking such permission, the plaintiff is required to ‘state fully and in detail, and in writing, the circumstances concerning and the reasons for the failure to lodge the objection within the 60 day period’, as required by s 100(2) of the TAA. It follows, the Commissioner contends, that as the objection period had expired by 20 February 2014, the provision to the plaintiff of a further copy of the notice of assessment does not enliven or confer a fresh right to lodge an objection to the Assessment. In other words, there is only one 60 day ‘window’ for lodgement of an as of right objection following the service of the Assessment. The Commissioner contends that to conclude otherwise would undermine the scheme of objections, reviews and appeals in Part 10 of the TAA and, furthermore, would be productive of uncertainty. In this context, a number of, said to be, analogous cases were referred to by the parties. It is to these that I now turn.
The decision of the Court of Appeal in Melbourne City Council v Port of Melbourne Corporation[17] is of some assistance in the present context. In that case, the Court of Appeal rejected an argument that the service of land tax assessment notices by a landowner gave rise to a right to object to a municipal valuation on which the land tax assessment was based. In so doing, Nettle JA observed that the validity of the objection depended ‘on whether the time for objecting began to run upon notice of the value of land given to PMC by the Melbourne City Council and Valuer-General of Victoria … pursuant to the Valuation of Land Act 1960, or only upon notice of the land assessment tax given to PMC by the Commissioner of Land Tax pursuant to the Land Tax Act 1958’.[18] It was concluded in that case that the objection period under Part III of the Valuation of Land Act was limited to within two months of service of the notice of valuation by the rating authority.[19] Of particular significance in the present context was the finding that, notwithstanding that the land tax assessment notices also gave notice of the site value of the lands, the service of those notices did not enliven a further right to object to the valuation.[20] In response to an argument that either the Commissioner or the Court could waive the excess of time, Nettle JA said:[21]
The failure to lodge a notice of objection within time does not necessarily mean that it is a nullity. But it does mean that the taxpayer has failed to exercise the right of objection which the statute affords him. It is a right to object within a limited time and so at the expiration of that time, the right if not exercised ceases to exist. Consistently with the approach which is taken to similar provisions in other revenue statutes, I see no reason to doubt that the time periods set by s 18 are absolute and incapable of extension by the Commissioner or the court. That is the construction which used to be placed upon the s 185 of the Income Tax Assessment Act 1936 (Com),[22] and there is here no relevant difference. There is nothing in the Land Tax Act or the Valuation of Land Act comparable to the provisions of s 100 of the Taxation Administration Act 1997, or s 14ZW of the Taxation Administration Act 1953 (Com), which would allow the Commissioner to deal with the objection as if it had been lodged within time. [Emphasis added]
[17][2005] VSCA 72.
[18][2005] VSCA 72 at [6].
[19][2005] VSCA 72 at [22], [65]-[66].
[20][2005] VSCA 72 at [27], [30], [34].
[21][2005] VSCA 72 at [48].
[22]Federal Commissioner of Taxation v Hoffnung & Co Ltd (1928) 42 CLR 39 at 55.
The plaintiff’s contentions are also, in my view, inconsistent with a number of other decisions to which I now turn.
In Administrative Appeals Tribunal Case 53/94,[23] notices of assessment of income tax were served on the taxpayer at her residential address. Many years later, the taxpayer denied having received the notices of assessment and requested that she be provided with copies of those notices, also lodging an application under the Commonwealth Freedom of Information Act. The taxpayer claimed that she had then sent a letter of objection to the assessments. The Administrative Appeals Tribunal found, on the evidence, that the notices of assessment had been served on and received by the taxpayer at her residential address, but that she had failed to lodge an objection to the assessments at that time. In relation to the claimed letter of objection, the Tribunal said that ‘the applicant would have to rely upon the fact that the assessments were not served until shortly before her “objection” and that receipt of copies of the assessment, pursuant to the Freedom of Information application constituted the only service of those assessments’.[24] Having found that the earlier service of the notices of assessment was effective, the Tribunal found that there was no valid objection and, consequently, that it did not have jurisdiction.[25] Similarly, in White Industries Australia Ltd v Commissioner of Taxation,[26] Emmett J concluded that ‘[w]here a perfectly valid and complete notice of assessment has already been given to a taxpayer, the giving of another notice of the same amended assessment will not supersede or displace that earlier valid notice’.[27] For these reasons, it follows, in my view, that these decisions do not support the plaintiff’s position but, rather, support the position advanced by the Commissioner.
[23](1994) 94 ATC 468; 29 ATR 1187.
[24](1994) 94 ATC 468; 29 ATR 1187 at [12].
[25]94 ATC 468; 29 ATR 1187 at [20]-[21].
[26](2003) 129 FCR 276.
[27](2003) 129 FCR 276 at 283.
The Commissioner submits that an analogy can be drawn with notification and review provisions in other statutory contexts, referring to Minister for Immigration and Citizenship v Manaf.[28] In that case, the Federal Court held that an application to the Migration Review Tribunal for review of a decision to refuse to grant a visa was not made within the prescribed period within which an application could validly be made. The review period commenced upon the valid notification of the decision to the applicant’s address for service, notwithstanding that the Department subsequently sent further letters enclosing the first notification letter or re-notifying the applicant of the refusal decision. Sundberg J concluded that, once the Minister had first notified the applicant of the decision, the statutory obligation to notify was exhausted and any further ‘notifications’ (including by personally serving the applicant with a copy of the decision) would have no legal consequence.[29] In that context, a ‘re-notification’ letter does not extend time or ‘provide a new starting point from which time would run’.[30]
[28][2009] FCA 963.
[29][2009] FCA 963 at [49)-[51 ]; cf H v Minister for Immigration and Multicultural Affairs (2002) 118 FCR 153 at 156 [9]. See also Zhang v Minister for Immigration and Citizenship (2007) 161 FCR 419 at 425 [25]; Patel v Minister for Immigration [2012] FMCA 565 at [29]-[31]; Singh v Minister for Immigration and Citizenship (2011) 190 FCR 552 at 564-566 [43]-[48].
[30]Patel v Minister for Immigration [2012] FMCA 565 at [31].
As the Commissioner observes, the plaintiff does not cite any authority in support of the construction of ss 96 and 99 of the TAA for which he contends. The construction advanced by the plaintiff does not differentiate between a situation in which there was receipt of the notice of assessment by the taxpayer and a situation in which there was no receipt. As to the consequence of the plaintiff’s construction, the Commissioner submits:[31]
On the Plaintiff’s construction, the right to object to an assessment would be revived or re-enlivened whenever a further copy of the assessment was provided to the taxpayer (including on multiple such occasions), even if the taxpayer’s failure to lodge an objection within the 60-day period after service of the notice of assessment was deliberate, reckless or negligent. The construction would deter the Commissioner from providing a taxpayer with a copy of a notice of assessment, lest the provision of the copy might give rise to fresh objection rights.
In my view, there is a great deal of force in the Commissioner’s submissions in this respect and I accept that, as indicated, considerable difficulty and adverse consequences would follow from the plaintiff’s construction as the Commissioner indicates. Moreover, Case 53/94[32] in the Administrative Appeals Tribunal is a stark example of the potential problems, as highlighted by the Commissioner, which may flow from the plaintiff’s construction. In my view, it would clearly been an absurd position if a taxpayer could extend the period for objection to an assessment by simply obtaining a copy of the notice of assessment from the State Revenue Office by a Freedom of Information request; or simply requesting a copy to which that Office responded by providing a copy as a matter of courtesy. The same would apply to any other means adopted by the taxpayer to obtain a fresh copy of the notice of assessment.
[31]Outline of Submissions of the Commissioner of State Revenue (2 December 2014), [38].
[32](1994) 94 ATC 468; 29 ATR 1187.
In terms of statutory construction, the approach contended for by the Commissioner does not involve reading down or adding any qualification to s 99(1) of the TAA. Rather, it is simply giving effect to the ordinary meaning of the words of the section, in the context of Part 10 of the Act as a whole. An objection must be lodged within the 60-day period after the date of service of the notice of assessment, otherwise there is no longer any as of right to object and the taxpayer must successfully invoke an exercise of the Commissioner’s discretion under s 100.[33] I accept that s 99 requires the identification of a single date of service, not multiple dates giving rise to different and conflicting ‘60-day periods’ within which an objection must be lodged. Neither does this construction render ‘meaningless’ or ‘useless’ the right of a taxpayer to object, even in a situation where the notice of assessment is served on, but not actually received by, the taxpayer; a position contended for by the plaintiff.[34] There was nothing to prevent a taxpayer seeking to lodge an objection under the provisions of s 100 of the TAA and, in deciding whether to permit the taxpayer to lodge an objection, the Commissioner is required to take into account the taxpayer’s explanation for the delay, which would include any relevant circumstances of non-receipt of the assessment.[35] It follows that this interpretation of these provisions does not, in any respect, deny any important right or rights to object to any “dissatisfied” taxpayer, as contended by the plaintiff.
[33]See, generally, Vontap v Commissioner of State Revenue [2005] VSC 322.
[34]Outline of Submissions of the Plaintiff (21 November 2014), [14]-[15].
[35]TAA, s 100(2); see generally Hunter Valley Developments Pry Ltd v Cohen (1984) 3 FCR 344 at 348-350; Brown v Federal Commissioner of Taxation (1999) 42 ATR 118 at 127-130.
Conclusion and orders
For the preceding reasons, I am of the opinion that the questions the subject of the Agreed Statement of Questions Arising for Determination in the Proceeding should be answered as follows:
(1)Does not arise as a question.
(2)(a)No.
(2)(b)(i)No, the delivery of the letter dated 20 February 2014 from the Commissioner to the plaintiff enclosing a copy of the Notice of Assessment did not amount to ‘service’ of the Notice of Assessment for the purposes of the objection provisions of the TAA though, subject to the answer to question (2)(b)(ii), the copy of the Notice of Assessment which was forwarded with this letter was otherwise effective for the purposes of s 127 of the TAA.
(2)(b)(ii)Section 99(1) of the TAA does not permit the plaintiff to lodge an objection within 60 days after the date of service of the 20 February 2014 letter as the plaintiff was only permitted by s 99(1) to lodge an objection within 60 days after service of the Notice of Assessment on 26 September 2007, subject to the exercise of the discretion by the Commissioner under s 100 of the Act.
(3)Does not arise as a question.
The parties are to bring in orders to give effect to these reasons. I reserve the question of costs and will hear the parties accordingly.
0
11
0