T.D.S Biz Pty Ltd and Commissioner of Taxation (Taxation)

These interlocutory proceedings concerned an application by T.D.S Biz Pty Ltd (the applicant) to summon Brett Challans, a Director at the Australian Taxation Office (ATO), to give evidence at the hearing of the substantive matter. The substantive matter involved the applicant’s review of the Commissioner of Taxation's (the respondent) decision disallowing its objection to a notice of assessment and penalty notice for the year ended 30 June 2018, specifically relating to research and development (R&D) expenditure. The respondent sought to have the summons set aside, arguing that the request for Mr Challans to attend was not for a legitimate forensic purpose.

The primary legal issue before the Tribunal was whether the potential evidence of Mr Challans would be relevant to the substantive proceedings and therefore serve a legitimate forensic purpose. The applicant contended that Mr Challans possessed relevant knowledge and experience from his involvement in R&D Tax Incentive Reference Group Meetings and had made public comments regarding the eligibility of imported components for R&D activities. The respondent argued that the summons should be set aside because Mr Challans' attendance was not necessary for the determination of the core issue, which was the applicant's entitlement to an R&D tax offset for specific expenditure.

The Tribunal considered that while it is not bound by strict rules of evidence, it has the discretion to set aside a summons if the evidence sought is irrelevant or will not shed light on the issues. The Tribunal found that the applicant sought Mr Challans' evidence regarding his opinion on the interpretation of the relevant law and its application to the applicant's circumstances. However, the Tribunal noted that this aspect had already been addressed in the respondent's Statement of Facts, Issues and Contentions. Crucially, the Tribunal reasoned that in reviewing an administrative decision, it stands in the shoes of the Commissioner and must make the correct or preferable decision based on the evidence before it, rendering Mr Challans' personal opinion on the law's interpretation unhelpful.

Consequently, the Tribunal determined that the potential evidence of Mr Challans was not relevant to the issues in the substantive proceedings and therefore would not serve a legitimate forensic purpose. The summons was accordingly set aside.