Shaw and Commissioner of Taxation (Taxation)

This matter concerned an appeal by Mr Shaw against a decision of the Deputy Commissioner of Taxation that disallowed his objection to an earlier decision not to grant him a release from his eligible taxation debt. The Administrative Appeals Tribunal was required to determine whether Mr Shaw should be released, in whole or in part, from his eligible taxation debt under section 340-5(3) of Schedule 1 of the *Taxation Administration Act 1953* (Cth), by assessing whether satisfying the liability would cause him serious hardship.

The legal issues before the Tribunal were twofold. Firstly, it had to determine whether Mr Shaw would suffer serious hardship if required to satisfy his taxation liability, as stipulated in the condition for release under section 340-5(3) of Schedule 1 of the *Taxation Administration Act 1953* (Cth). Secondly, if serious hardship was established, the Tribunal had to consider whether to exercise its discretion to grant a release, in whole or in part, from that liability.

The Tribunal applied a two-stage approach to this determination. The first stage involved assessing whether the applicant would suffer serious hardship if required to satisfy the liability. If this threshold was met, the second stage required the Tribunal to consider whether, in all the circumstances, it was just and proper to exercise its discretion to grant the requested relief. This discretion is not a matter of right for the applicant but a matter for the Tribunal to decide, considering the incidence and consequences of the tax and its effect on the applicant's affairs. The Tribunal ultimately set aside the Reviewable Decision and substituted it with a decision granting Mr Shaw a partial release of his eligible taxation debt, specifically the General Interest Charges accrued as at the date of the decision.