The Trustee for the Star Enterprises Trust (Eurodrive Tours Pty Ltd) and Commissioner of Taxation (Taxation)

The Trustee for the Star Enterprises Trust (trading as Eurodrive Tours Pty Ltd) appealed against assessments made by the Commissioner of Taxation concerning luxury car tax (LCT). The core of the dispute revolved around whether certain funds provided for the acquisition of luxury vehicles constituted loans from third parties, with the intention of holding the vehicles as trading stock for resale, or whether these transactions were in substance sales of the vehicles to the entities providing the funds. The matter was heard by Theodore Tavoularis SM.

The legal issues before the Tribunal were to determine whether the applicant had discharged the onus of proof to demonstrate that the Commissioner's assessments were excessive. Specifically, the Tribunal was required to consider whether the applicant had provided sufficient evidence to establish that the funds used to acquire the luxury vehicles were indeed loans, and that the intention was to hold these vehicles as trading stock for subsequent resale. The Tribunal also had to assess the credibility and sufficiency of the evidence presented by the applicant, including statutory declarations, in light of the Commissioner's contentions.

The Tribunal found that the applicant had failed to adduce the required evidence to discharge the onus of proof. It noted the absence of witness statements from the putative lenders, which were crucial to demonstrating that the funds comprised loans. In the absence of such corroborative evidence, the Tribunal considered it difficult to displace the Commissioner's contention that the provision of funds effectively constituted sales of the vehicles. The statutory declarations provided by the applicant were found to be too general and failed to address the specific deficiencies in establishing the alleged loan arrangements and the intended course of dealing involving trading stock and profit-sharing. Consequently, the Tribunal concluded that the rule in *Jones v Dunkel* could be applied to draw an adverse inference against the applicant due to the missing evidence.

The Commissioner conceded to the setting aside of the decision under review. Accordingly, the Tribunal ordered that the LCT payable on the luxury vehicles be adjusted according to a specified annexure, and that the GST payable be adjusted accordingly. Penalties attributable to the LCT issue were to be calculated on the adjusted amount. The parties were directed to provide a minute of order dealing with the remaining issues of income tax and GST.