Summerland Financial Services Limited and Commissioner of Taxation (Taxation)

[2018] AATA 3370

Summerland Financial Services Limited and Commissioner of Taxation (Taxation) [2018] AATA 3370 (11 September 2018)

Division:TAXATION & COMMERCIAL DIVISION

File Number(s):      2018/3734

Re:Summerland Financial Services Limited

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:11 September 2018

Place:Brisbane

The objection decision as it relates to assessments made with respect to the periods commencing 1 January 2014 through to 30 June 2017 is before the Tribunal. The objection decision as it relates to the earlier periods is not currently before the Tribunal. 

........................[SGD].................................

Deputy President Bernard J McCabe

Catchwords

TAXATION – objection decision – single objection against multiple assessments of GST – jurisdiction issue – invalid objection for earlier assessment periods – valid objection for later assessment periods

Legislation

A New Tax System (Goods and Services Tax) 1999 (Cth)

Taxation Administration Act 1953 (Cth)

REASONS FOR DECISION

Deputy President Bernard J McCabe

11 September 2018

Background  

1. The applicant lodged a single objection against multiple assessments of GST on 30 October 2017. The objection related to multiple assessments for the periods between 1 July 2012 and 30 June 2017. A jurisdiction question has arisen because the Commissioner says the applicant’s objection was out of time in respect of the assessment periods prior to the end of 2013, which meant the objection in respect of those periods was invalid. The Commissioner accepted there was a valid objection in respect of the later assessment periods. As it happens, the Commissioner did not make a decision on the objection within 60 days of a request from the applicant pursuant to s 14ZYA(1) of the Taxation Administration Act 1953 (“the TAA”) and the objection was deemed to be disallowed on 23 June 2018. The applicant now argues the deemed decision on the objection should be treated as an objection decision on all of the assessment periods, including the objection in respect of the earlier periods which the Commissioner says were out of time. If the applicant is right, the whole of the dispute is before the Tribunal. The Commissioner insists the deemed objection decision only relates to the assessment periods that were within time – which means the Tribunal does not have jurisdiction with respect to the earlier periods unless and until and extension of time is allowed.

2. I am satisfied the objection decision only relates to what the parties have identified as the later assessment periods. It will now be necessary for the applicant to make submissions on why the Tribunal should grant an extension of time in respect of the earlier periods.

   The history of the interaction between the parties

3. On 30 October 2017, the applicant lodged an objection against GST assessments for the period of 1 July 2012 through to 30 June 2017. The applicant claims it was entitled to additional input tax credits during all of those quarterly periods. The Commissioner wrote to the applicant on 14 November 2017 in response to the objection. In that letter, the Commissioner said two things of relevance for present purposes. First, the Commissioner advised:

   Your objection partially invalid [sic] because you are out of time for the period 1 July 2012 to 30 September 2013; section 93-5 of the GST Act denies entitlement to any portion of an input tax credit not already taken into account in an entity’s net amounts within 4 years of when the credit would be attributable under sub-sections 29-10(1) or 29-10(2) of the GST Act. Please note that you will lose entitlements to ITCs for more tax periods the longer it takes for you to quantify the additional claims due to the operation of section 93-5.

4. Second, the Commissioner expressly declined to exercise the discretion to treat the objection in relation to the period of 1 July 2012 to 30 September 2013 as being within time – although the Commissioner expressly acknowledged the objection in respect of the subsequent periods was valid. At the interlocutory hearing, Ms Roberson for the Commissioner explained s 14ZY of the TAA required the Commissioner to decide an objection that was lodged within time. The earlier periods concluded more than four years before the date when the objection was filed, so the objection with respect to those periods was not within time and therefore did not have to be decided.

5. The applicant subsequently provided some additional information and there was further correspondence. The applicant said the Commissioner proceeded to consider the substance of the objection with respect to all of the periods which were the subject of the original objection. But on 23 February 2018, the Deputy Commissioner wrote to the applicant and repeated the advice that the objection with respect to the earlier periods was invalid and added that the objection in relation to the period 1 October 2013 through to 31 December 2013 was now out of time. The letter went on to request that the applicant provide additional information quantifying the additional claims by 12 March 2018.

6. The import of that letter was clear enough. The Commissioner remained of the view that the objection was not valid insofar as it related to the earlier claims because they were now out of time. The letter also made clear the Deputy Commissioner’s view that the time for reviewing more recent quarterly periods was also expiring in the absence of a quantification of those claims.

7. A representative of the applicant contacted the case officer at the Australian Tax Office by email on 27 March 2018 and agreed to provide additional material. The case officer responded by return email and asked for the additional information sought in the earlier correspondence. The officer added the case file would remain open but the information should be supplied as soon as possible. The applicant says that remark from the case officer in a hasty response to an email amounted to an extension of time which binds the Commissioner notwithstanding the remarks made in the Deputy Commissioner’s letter of 14 November 2017 expressly declining to grant an extension of time, and in spite of the Commissioner’s repeated view that the objection was invalid insofar as it related to the earlier periods of review. The applicant supplied additional information in an email dated 24 April 2018. That email also included a formal request that the objection be dealt with in 60 days pursuant to s 14ZYA of the TAA.

8. In an email dated 5 June 2018, the case officer sought to clarify the position. He explained that an objection in relation to a series of assessments was technically a series of separate objections – and a decision was technically made with respect to each objection. He continued:

   …the decision communicated to you in the letter dated 23^rd of February 2018 does not represent a partial disallowance of any objection. What it represents is a full disallowance of the objections lodged in respect to the assessment of net amount covering periods of up to and including the December 2013 tax period.

9. The Commissioner did not make a further decision on the objection within 60 days and the decision insofar as it was lodged within the required period was taken to be affirmed pursuant to s 14ZYA(1).

   The argument between the parties

10. The applicant says there was one objection lodged in respect of all the periods in question – and the deemed decision with respect to that objection was therefore made in respect of all the periods referred to in the objection. That is wrong.

11. There is no doubt a taxpayer can object to more than one assessment in the course of a single objection, particularly where the same point is made in relation to each assessment. Section 14ZR says the decision made in response to that decision is deemed to be a single objection decision. The section provides:

    (1)  If:

    (a)  a provision of an Act (including a provision as applied by another Act) provides that a person who is dissatisfied with a taxation decision may object against it in the manner set out in this Part; and

    (b)  a notice incorporates notice of 2 or more such taxation decisions;

    then, for the purposes of the provision and of this Part, the taxation decisions are taken to be one taxation decision.

12. But it is also clear the Commissioner is able to conclude the single objection to a number of the assessments is allowed insofar as it relates to some of the assessments and that it is disallowed and reach a different conclusion in relation to other assessments that were the subject of the single objection decision (or conclude the objection with respect to those assessments is not valid because the objection is not within time). The single decision is effectively severable into individual decisions that operate with respect to individual assessments.

13. The deemed objection decision can only operate with respect to those assessments which were the subject of a valid assessment. That much is clear from s 14ZYA(1) which says:

    This section applies if the taxation objection… has been lodged with the Commissioner within the required period…

14. It follows the deemed objection does not extend to the earlier assessments because they were not filed within time. I do not accept the Commissioner effectively granted an extension of time notwithstanding the express refusal to do so in the letter of 14 November 2017. The email remark by the case officer suggesting he would keep the case file open while waiting for the additional information did not suggest the Commissioner had resiled from his earlier decision. The case officer was clearly referring to the letter of 23 February 2018 which repeated the view about part of the objection being invalid then asked for information about additional claims – that is, claims that were raised in relation to assessments that were the subject of a valid objection. The looseness of some of the language (including the language in the email dated 5 June 2018 suggesting the objection in respect of the earlier claims had, in fact, been disallowed) does not amount to retraction of the refusal to give an extension of time.

    Conclusion  

15. The objection decision – insofar as it relates to assessments made with respect to the periods commencing 1 January 2014 through to 30 June 2017 – is before the Tribunal. The objection decision insofar as it relates to the earlier periods is not currently before the Tribunal. Ms Roberson agreed the Commissioner was content to permit the applicant to proceed with an application for an extension of time. The applicant should be given 7 days from the date of these reasons to supply written submissions in support of the application. The Commissioner should respond with written submissions within 7 days of receiving the applicant’s submissions. A decision will be made on the papers unless either party wishes to make oral submissions.

16.     I certify that the preceding 15 (fifteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

.....................[SGD]............................

Associate

Dated:   11 September 2018               

Date of hearing:	27 August 2018
The Applicant’s Representative:	The Blackbridge Group Pty Ltd
The Respondent’s Representative:	Australian Taxation Office