The Commonwealth and Commonwealth Oil Refineries Ltd v South Australia

The High Court considered the validity of the South Australian Taxation (Motor Spirit Vendors) Act 1925. The dispute arose from the imposition of a tax on vendors of motor spirit, with the Commonwealth and Commonwealth Oil Refineries Ltd. challenging the Act's constitutional validity. The plaintiffs argued that the Act infringed upon provisions of the Commonwealth Constitution relating to federal powers and interstate trade.

The court was required to determine whether the South Australian Act violated section 90 of the Commonwealth Constitution, which grants the Commonwealth Parliament exclusive power to impose duties of customs and excise, and section 92, which mandates that trade, commerce, and intercourse among the States shall be absolutely free. The plaintiffs contended that the tax imposed by the state legislation encroached upon the Commonwealth's exclusive powers and unduly burdened interstate commerce.

A majority of the High Court, comprising Knox C.J., Isaacs, Higgins, Powers, Rich, and Starke JJ., held that the Taxation (Motor Spirit Vendors) Act 1925 was invalid. The court found that the Act contravened section 90 of the Constitution by purporting to levy a tax that fell within the exclusive power of the Commonwealth to impose customs and excise duties. Furthermore, Isaacs, Higgins, Powers, Rich, and Starke JJ. also found the Act to be invalid on the ground that it violated section 92 of the Constitution by impeding the freedom of trade, commerce, and intercourse among the States. Gavan Duffy J. dissented on both grounds.