Seboa v The Commissioner of Business Franchises

The applicant, Mr P.K. Searle, appeared before the High Court of Australia on behalf of the applicant, while Mr D. Graham QC, Solicitor-General for Victoria, with Mr N. Lucarelli, appeared for the respondent, the Commissioner of Business Franchises. The dispute concerned whether a default assessment issued under section 19A of the Business Franchise (Tobacco) Act imposed a duty of excise, thereby contravening section 90 of the Australian Constitution. The applicant argued that the case presented an opportunity for the Court to apply a modern interpretation of section 90, as established in *Capital Duplicators*.

The central legal issue before the Court was whether the tax of $655,000, levied as a default assessment under the Business Franchise (Tobacco) Act, constituted a duty of excise. This question was framed as a matter of legal argument, with the applicant contending that the tax was not a fee for a licence to carry on a business, but rather a tax on sales. The applicant sought to distinguish the present case from earlier decisions where licence fees were considered, arguing that this assessment did not involve a fee for a licence that had been granted.

The applicant's reasoning focused on the characterisation of the tax in light of established High Court jurisprudence, particularly *Dennis Hotels*, *Dickenson's Arcade*, and *Philip Morris*. The applicant submitted that the principles outlined in the dissenting judgments of McHugh J and Brennan J in *Philip Morris* were apposite. The applicant argued that the tax, particularly the ad valorem component of 30 per cent of purchases over a year and a half, was a tax on sales and therefore an excise, rather than a fee for the privilege of carrying on business. The applicant explicitly stated that their submission did not seek to overrule or reconsider *Dennis Hotels* or *Dickenson's Arcade*, but rather argued for their inapplicability to the facts of this case, drawing on elements identified by McHugh J in *Philip Morris* concerning the proximity and duration of calculation periods, the size of the tax, and its collection point in the chain of distribution.