Thorn, EMI Pty Ltd v Commissioner of Taxation for the Commonwealth of Australia - [1987] FCA 108

Re: THORN EMI PTY. LIMITED
And: COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA
No. G184 of 1986
Sales Tax

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.

CATCHWORDS

Sales Tax - applicant sold goods by retail through an agent - "indirect marketing arrangements" - new regulations deeming certificate to have been quoted - sales tax imposed on notional wholesale sales - whether permissible to refer to regulation - whether regulation beyond power.

Sales Tax Assessment Act (No.1) 1930; ss.3(1),3(4A), 11, 12, 73

Sales Tax Assessment Act (No.2) 1930; ss.3, 4(1), 10(2A)

Sales Tax Regulations; regs.11, 12(1)(a), 12(1)(e), 14A(2), 48(1)(b), 49(1), 49(2), 50(5).

Deputy Federal Commissioner of Taxation for the State of South Australia v. Ellis & Clark Limited (1934) 52 CLR 85

Brayson Motors Proprietary Limited (In Liquidation) v. The Commissioner of Taxation (1985) 156 CLR 651

Davies Coop and Company Limited v. Federal Commissioner of Taxation (1948) 77 CLR 299

Coates v. Commissioner for Railways (1960) 78 WN (NSW) 377

Hunter Douglas Australia Pty. Ltd. v. Perma Blinds (1970) 122 CLR 49

Webster v. McIntosh (1986) 32 ALR 603

University of Wollongong v. Metwally (1984) 56 ALR 1

Neill v. Glacier Metal Co. Ltd. (1965) 1 QB 16

Jackson v. Hall (1980) AC 854

Morton v. The Union Steamship Company of New Zealand Limited (1951) 83 CLR 402

Shannahan v. Scott (1957) 96 CLR 245

HEARING

SYDNEY

#DATE 16:3:1987

Counsel and Solicitors for Applicant: D.G. Hill Q.C. with B.J. Sullivan instructed by Freehill, Hollingdale & Page.

Counsel and solicitors for Respondent: Mrs. P. Flemming Q.C. with D.H. Bloom instructed by Australian Government Solicitor.

ORDER

The proceedings be dismissed.

The applicant pay the respondent's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

In these proceedings, which were remitted from the High Court, the applicant seeks, inter alia, a declaration that it is not liable to pay sales tax pursuant to the provisions of the Sales Tax Assessment Act (No.2) 1930 ("the (No.2) Act") in respect of the sale by it of certain goods.

At material times, the applicant carried on the business of purchasing, and selling by wholesale, records, cassettes and compact discs under the name "EMI Records Australia"; it also carried on the business of purchasing, and selling by retail, records, cassettes and compact discs under the name "EMI Retail Promotions". Prior to 30 May 1985 (the date upon which relevant amendments were made to the (No.2) Act) the applicant: (a) purchased from the manufacturer certain records, cassettes and compact discs ("the goods"); (b) delivered those goods to a retailer at arm's length with the applicant upon the terms (i) the retailer would act as the applicant's agent for the sale of the goods; (ii) until such sale, property in the goods would remain in the applicant; (iii) the retailer would be entitled to a commission on any sale. After 5 June 1985 (the date upon which relevant amendments…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Thorn, EMI Pty Ltd v Commissioner of Taxation for the Commonwealth of Australia [1987] FCA 108
Case: [1987] FCA 108
Decision Date: 16 MARCH 1987

CaseChat Overview and Summary

Thorn, EMI Pty Ltd brought a case against the Commissioner of Taxation for the Commonwealth of Australia. The central dispute revolved around the imposition of sales tax on goods sold by the applicant through an agent under what were termed "indirect marketing arrangements". The regulations in question deemed a certificate to have been quoted, thereby subjecting the sales to tax on notional wholesale sales. The applicant contested the legality of the regulations, arguing they exceeded the legislative power of the parliament.

The court was tasked with determining whether it was permissible to refer to the regulation in question and whether the regulation exceeded the legislative power of the parliament. This required an examination of the legislative framework and the extent to which the regulation was authorised by the relevant statutes. The applicant argued that the regulation was beyond the power granted by the parliament, as it purported to impose a tax that was not expressly authorised.

The court found that the regulation was within the legislative power and permissible to refer to. It held that the regulation did not exceed the legislative power of the parliament, thereby upholding the imposition of sales tax on the notional wholesale sales. The court dismissed the applicant's proceedings and ordered that the applicant pay the respondent's costs. The dismissal and costs order were made in accordance with Order 36 of the Federal Court Rules.

Orders

Orders of the court

The proceedings be dismissed.

The applicant pay the respondent's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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