Shiraz Nominees Pty Ltd and Commissioner of Taxation
[2003] AATA 778
•11 August 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 778
ADMINISTRATIVE APPEALS TRIBUNAL Nº VT2002/122
TAXATION APPEALS DIVISION
Re: SHIRAZ NOMINEES PTY LTD
Applicant
And: COMMISSIONER OF TAXATION
Respondent
DECISION
Tribunal: Mr B.H. Pascoe, Senior Member
Date: 11 August 2003
Place: Melbourne
Decision:The Tribunal revokes the summons issued by the Deputy Registrar on 10 July 2002 at the request of the applicant to the respondent.
(sgd) B.H. Pascoe
Senior Member
PRACTICE AND PROCEDURE - summons issues to respondent - whether doc relevant - whether unreasonable and oppressive - whether disclosure of documents prohibited by secrecy provisions - summons revoked
Income Tax Assessment Act1936
Sales Tax Assessment Act 1992
Taxation Administration Act 1953
Case 19 (1996) 96 ATC 248
RePerpetual Trustee Company (Canberra) Ltd and Commissioner for ACT Revenue
(1993) 29 ALD 817
Cosco Holdings Pty Ltd v Commissioner of Taxation (1997) 37 ATR 432
REASONS FOR DECISION
11 August 2003 Mr B.H. Pascoe, Senior Member
This is an application by the Commissioner of Taxation (the respondent) to set aside or revoke a summons issued by the Tribunal at the request of Shiraz Nominees Pty Ltd (the applicant) in proceedings under an application to review a decision of the respondent under the Sales Tax Assessment Act 1992.
The background to this matter is that, on 18 March 1999, the respondent issued a notice of assessment of sales tax alleging the manufacture and application to own use of a game fishing boat. The applicant objected on the grounds that the boat was manufactured by a boat builder, Mr P. Caterson, and not by the applicant. The objection was disallowed and that reviewable decision is sought to be reviewed by the Tribunal with a hearing of the application set down for 8 and 9 September 2003.
A summons was issued to the respondent on 19 July 2003 at the request of the applicant requiring the production of the following documents:
1.Copies of income tax returns for Mr Patrick Caterson, of 43 Waterway Dve Coomera Qld 4209 (or of Lot 12 Kopps Road, Oxenford Qld 4210 or of 316 Brisbane Road Labrador, Qld 4215) for the years ending 30 June 1996, 30 June 1997 and 30 June 1998.
2.Copies of any documents that indicate how Mr Patrick Caterson, of 43 Waterway Dve Coomera Qld 4209 (or of Lot 12 Kopps Road, Oxenford Qld 4210 or of 316 Brisbane Road Labrador, Qld 4215) treated his income in his income tax returns for the years ending 30 June 1996, 30 June 1997 and 30 June 1998.
3.Copies of any documents that indicate that Mr Patrick Caterson, of 43 Waterway Dve Coomera Qld 4209 (or of Lot 12 Kopps Road, Oxenford Qld 4210 or of 316 Brisbane Road Labrador, Qld 4215) was registered as a group employer under the PAYE provisions of Division 2 of Part VI of IncomeTax Assessment Act 1936, at any time between 1 April 1996 and 30 June 1998.
4.Copies of any statutory declarations provided by Mr Patrick Caterson, or by Mr Gordon Douglas or Mr Don Scott, in respect of the construction of boats by Mr Caterson or in the construction of which Mr Caterson was involved.
5.Copies of any documents that indicate that Mr Patrick Caterson complied with his obligations, as an employer, under any Act administered by the Commissioner of Taxation.
6.Copies of assessments for sales tax issued to Mr Gordon Douglas in respect of a boat built at premises at 316 Brisbane Road, Labrador.
7.Copies of assessments for sales tax issued to Mr Don Scott in respect of a boat built at premises at 316 Brisbane Road Labrador.
8.Copies of invoices, held by the Australian Taxation Office, that were issued by Mr Patrick Caterson or by Ken Caterson Marine or by Caterson Boat Building or by Caterson Shipbuilding and Repairs to customers between 1 April 1996 and 31 July 1997 (other than invoices issued to Shiraz Nominees Pty Ltd).
The respondent applied to have the summons set aside or revoked. This application was on the grounds that:
· the documents were not relevant to the issue before the Tribunal
· the requirements of the summons were unreasonable and oppressive
· the documents sought were by way of a fishing expedition
· the documents related to affairs of other taxpayers and the secrecy provisions of the Income Tax Assessment Act1936, the Sales Tax Assessment Act 1992 and the Taxation Administration Act 1953 prohibited disclosure.
It is appropriate to consider the various documents sought in relation to each ground of objection.
It was submitted for the applicant that a principal issue in this case is whether or not Mr Caterson was an employee of the applicant at the time of the manufacture of the boat. It was contended that it was relevant whether Mr Caterson regarded himself as a employee or whether he was carrying on a business in his own right and whether Mr Caterson, in turn, was the employer of others who worked on the boat. It was submitted that his income tax returns and group employer documents would disclose this information. The documents relating to Mr Douglas and Mr Scott were said to be relevant on the basis that the applicant would allege that boats were manufactured by or for these two gentleman at or about the same time as the applicant’s boat was manufactured.
It is clear that the Tribunal has power to revoke, amend or vary a summons issued pursuant to s.40(1A) of the Administrative Appeals Tribunal Act1975 (see Case 19 (1996) 96 ATC 248, RePerpetual Trustee Company (Canberra) Ltd and Commissioner for ACT Revenue (1993) 29 ALD 817 and Cosco Holdings Pty Ltd v Commissioner of Taxation (1997) 37 ATR 432.
In relation to income tax returns and related documents of Mr Caterson under items 1 and 2 of the summons, the two principal issues are relevance and the secrecy provisions. I am not satisfied that they are relevant to the issue of the application to this Tribunal by the applicant. The decision in that application will turn on the facts of the relationship between Mr Caterson and the applicant. How Mr Caterson calculated his taxable income and whether this was a correct reflection of his activities is not properly before the Tribunal and is not relevant to the issue that is involved in the application. It is appropriate to note that, since the introduction of self‑assessment some years ago, income tax returns contain little in the way of detail which would allow the information hoped for by the applicant to be found. Secondly, and more importantly, the information sought by the applicant is information provided by an unrelated taxpayer to the respondent and covered by the secrecy provisions of the legislation.
Section 16(4)(c) of the Income Tax Assessment Act1936 allows information respecting the affairs of another person to be communicated to the Tribunal in connection with proceedings under an Act of which the respondent has the general administration. However, the Tribunal is, in turn, bound by the same secrecy provisions under s.16 of that Act. While it is clear that the Tribunal can receive this information, it is of no value to the applicant unless the applicant itself can use the information in the proceedings. In turn, the Tribunal can make use of the information only if it is necessary and relevant in the performance of its duties. Here, I cannot be satisfied that the documents sought by the applicant are sufficiently relevant and necessary for its case to override the compelling need for confidentiality of the affairs of another unrelated taxpayer. As stated earlier, the relevant evidence is that of the contractual relationship between the applicant and Mr Caterson in relation to the building of the particular boat. The applicant can provide this by direct evidence. In addition, it is noted that Mr Caterson has been summonsed to give evidence at the hearing. As a consequence, I am satisfied that items 1 and 2 of the summons should be deleted.
Item 3 of the summons seeks documents relating to whether Mr Caterson was registered as a group employer under s.221F of the Income Tax Assessment Act1936, during the period 1 April 1996 to 30 June 1998. While it may be argued that whether or not such a registration existed is not a matter of significant confidentiality, it is, nevertheless, covered again by the secrecy provisions of the legislation. It is understood that the purpose of including such documents in the summons is to lend weight to the applicant’s allegation that Mr Caterson was not an employee of the applicant in building the boat but himself the employer of others. I am unable to see that whether or not Mr Caterson was so registered is necessarily relevant to the applicant’s argument. One question will be whether Mr Caterson was the employer of others who were involved in the building of the boat. Whether or not he was registered, as a group employer during any part of the relevant period, is not the issue. Consequently, I am not satisfied that the documents sought by the applicant are sufficiently relevant to override the secrecy provisions and should be excluded from the summons.
Items 4, 5 and 7 relate to the manner in which boats were built by or for other individuals and whether or not the respondent assessed the individuals to sales tax. Again, these relate to the affairs of unrelated persons and the documents sought are covered by the secrecy provisions. This is a similar issue to that considered by the Tribunal in Case 19.. In that case, the Tribunal found that it was not relevant whether the decision under review by the Tribunal was consistent with previous or other decisions of the respondent. It is up to the party to call evidence and make submissions upon what is the preferable decision in the application before the Tribunal. Whether or not the respondent has been consistent in his approach to other parties is not relevant to this application. It is the evidence of this matter and the building of this boat which is the relevant matter not what may or may not have occurred in relation to others. Again, these items should be excluded.
Item 5 needs little consideration. It is too broad, unspecific, would involve an inordinate amount of time of the respondent so as to be unreasonable and oppressive, any relevance to the applicant’s case is unclear and the information is, again, subject to the secrecy provisions.
The final item is item 8. Again, the respondent would be put in a difficult position to comply with the requirement. Whether or not the respondent would have such invoices and on what files they may be held would involve significant time, may be impossible to answer with any degree of uncertainty and the request could be well considered oppressive. Again, it is difficult to see the relevance of the documents to the applicant’s case, which will turn on the contractual relationship between the applicant and Mr Caterson. Any evidence of the relationship between Mr Caterson and others is, if relevant, best dealt with by direct evidence.
The consequence of the foregoing findings is that no item on the summons in question can be dealt with by the summons and the summons issued to the respondent on 10 July 2003 should be revoked.
I certify that the thirteen [13] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr B.H. Pascoe, Senior Member
(sgd) Catherine Thomas
Clerk
Date of Hearing: 30 July 2003
Date of Decision: 11 August 2003
Advocate for the applicant: Mr B. Thomas
Solicitor for the respondent: Ms E. Moore, Australian Taxation Office
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