Smith's Snackfood Company Ltd v Chief Commissioner of State Revenue (NSW)

The appeal concerned the Chief Commissioner of State Revenue (NSW) and Smith's Snackfood Company Ltd regarding payroll tax liability. The dispute centred on whether certain contractors engaged by Smith's Snackfood Company were engaged under "relevant contracts" for the purposes of the *Payroll Tax Act 2007* (NSW) and its predecessor, the *Payroll Tax Act 1971* (NSW). Specifically, the Commissioner had assessed payroll tax on payments made to these contractors, arguing they fell within the definition of a relevant contract, particularly concerning services ancillary to the conveyance of goods by a vehicle provided by the person conveying them.

The Court of Appeal was required to determine whether the contracts between Smith's Snackfood Company and its contractors constituted "relevant contracts" under the *Payroll Tax Act*. This involved considering whether the services provided by the contractors were ancillary to the conveyance of goods by means of a vehicle provided by the contractors themselves, and whether the apportionment provisions of the *Payroll Tax Acts* were applicable in this context. The central question was whether the payments made to these contractors were subject to payroll tax.

The Court allowed the appeal and in part allowed the cross-appeal. It found that the contractors were not engaged under relevant contracts as defined by the legislation, meaning the payments made to them were not subject to payroll tax. The Court reasoned that the services provided by the contractors did not meet the criteria for a relevant contract, particularly the requirement that the services be ancillary to the conveyance of goods by a vehicle provided by the person conveying them. Consequently, the notices of assessment were set aside, and the Commissioner was ordered to issue replacement notices as if the appellant's objections had been allowed in full. The respondent was also ordered to pay the appellant's costs of the proceedings.