ZCSB and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal (AAT) considered an application by ZCSB (the Applicant) seeking release from a tax debt owed to the Commissioner of Taxation. The Applicant contended that requiring payment of the debt would cause serious hardship. The AAT was tasked with determining whether the Applicant would suffer serious hardship if required to pay the tax debt and, if so, whether the discretion to release the Applicant from the debt, in whole or in part, should be exercised.

The legal issues before the Tribunal were twofold. Firstly, it had to determine whether the Applicant would suffer "serious hardship" if compelled to pay the tax debt, which is a jurisdictional pre-condition for the exercise of the Tribunal's power to release a taxpayer. Secondly, if serious hardship was established, the Tribunal then had to consider whether, in all the circumstances, it was just and proper to exercise its discretion to release the Applicant from the debt, either wholly or partially. The onus was on the Applicant to establish both of these elements on the balance of probabilities.

The Tribunal applied a two-stage process, as established in previous AAT and Federal Court decisions. This process requires a finding of serious hardship before the discretion to release the debt can even be considered. The Tribunal noted that the Applicant had not discharged the onus of proof required to satisfy this jurisdictional pre-condition. Based on the evidence before it and applying relevant authorities and policy guidance, the Tribunal concluded that the Applicant had not established that the reviewable decision should not have been made or should have been made differently.

Consequently, the Tribunal affirmed the Reviewable Decision dated 20 July 2018. This means the Applicant was not released from their tax debt.