The Commonwealth v Morison

The Commonwealth of Australia (the appellant) appealed to the High Court of Australia against a decision of the Supreme Court of New South Wales concerning the respondent, Mr Morison. The dispute centred on the validity of a notice issued by the Commissioner of Taxation under section 264 of the *Income Tax Assessment Act 1936* (Cth) (the Act), requiring Mr Morison to attend before the Commissioner to answer questions and produce documents relating to his income tax affairs. Mr Morison had refused to comply with the notice, asserting it was invalid.

The High Court was required to determine whether the notice issued by the Commissioner was a valid exercise of the power conferred by section 264 of the Act. Specifically, the Court had to consider whether the notice was sufficiently particular in its demands, and whether the Commissioner had acted *bona fide* in issuing it, or if it was issued for an improper purpose.

The Court, in a joint judgment, held that the notice was invalid. Their Honours reasoned that while section 264 grants broad powers to the Commissioner, these powers must be exercised for the purpose for which they were conferred, namely, the assessment and recovery of income tax. The notice in question was found to be excessively broad and lacking in particularity, demanding the production of documents and answers to questions that were not sufficiently related to the ascertainment of Mr Morison's tax liability. The Court emphasised that the Commissioner's power is not a general power of investigation but is confined to matters relevant to the taxpayer's assessment.

The appeal was dismissed.