Deputy Federal Commissioner of Taxation v. Mackey.

Judges: Moffitt P

Hutley JA
Glass JA

Court:
Supreme Court of New South Wales - Court of Appeal

Judgment date: Judgment handed down 16 November 1982.

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Hutley J.A.

I entirely agree with what the President said, but because of the importance of this matter and it being, as far as I know, the first case in which sec. 201 of the Income Tax Assessment Act 1936 has been dealt with in the Court of Appeal, I wish to say a few words in support.

Having regard to the argument presented by Mr. Bennett Q.C. I would state that the discretion under sec. 201 should be exercised without regard to
I.R. Commrs. v. Duke of Westminster (1936) A.C. 1 and similar cases. The fact that a taxpayer may arrange his affairs in any manner consistent with the law provides no justification for a Court giving any assistance to him in his attempts to resist the collection of assessments issued by the Commissioner of Taxation. In my opinion the power to stay under sec. 201 should be exercised with great caution and only under special circumstances. In deciding whether to exercise it, there is no similarity whatsoever to the issue which faces the Court when it is asked to grant an interlocutory injunction. A person who applies for an interlocutory injunction is applying for an exercise of the Court's power in his favour, and the burden lies on him to establish his right to it.

The Commissioner starts off with rights under sec. 201 and the taxpayer is seeking on special bases to have a special discretion exercised in his favour. It is not possible to work out in advance all possible bases for the exercise of such a discretion and it would not be proper even to attempt to do so. It is an open-ended discretion.

But there are only two cases where it is clear the Court should exercise that discretion. First the comparatively rare case where the Commissioner abuses his position, for example by assessing and endeavouring to collect tax in defiance of a decision of the High Court or other superior Court precisely in point. Second, in cases of extreme personal hardship to a taxpayer called upon to pay. The obligation to pay which has been cast upon him by law is not a hardship of itself and the mitigation of the effect of inflation and the burden of interest is a matter for the legislature, not for the Court.

I am also of the opinion that speculation as to the result of appeals is not a significant factor to be borne in mind. This Court should be concerned only with the question of the impact of the assessment upon the particular person concerned and not with what is going to happen in the future to the appeal. In my opinion, the orders proposed are proper.