Dennis Hotels Pty Ltd v Victoria

[1960] HCA 10
104 CLR 529

---

(Judgment by: Menzies J)

Dennis Hotels Pty Ltd
vVictoria

Court:

Judges: Dixon CJ
McTiernan J
Fullagar J
Kitto J
Taylor J

Menzies JWindeyer J

Subject References:
Constitutional Law (Cth)
Duties of excise
Exclusive power of Commonwealth Parliament
Victualler's licence fee imposed under State law
Fee equal to six per cent of gross amount paid or payable for all liquor purchased for the licensed premises during the twelve months preceding application for renewal of licence
Temporary victualler's licence fee imposed under State law
Fee to include sum equal to six per cent of gross amount paid or payable for all liquor purchased for sale or disposal under such licence
Validity
The Constitution (63 & 64 Vict. c. 12), s. 90
Licensing Act 1958 (Vict.) (No. 6293), ss. 7, 19 (1) (a), (b).

Case References:
Parton v Milk Board (Vict) - [1949] HCA 67; (1949) 80 CLR 229
The Commonwealth and Commonwealth Oil Refineries v South Australia - [1926] HCA 47; (1926) 38 CLR 408
Matthews v Chicory Marketing Board (Vict) - (1938) 60 CLR 263
Meredith v Fitzgerald - [1948] HCA 11; (1948) 77 CLR 161
R v Caledonian Collieries - (1928) AC 358
Griffith v Constantine - [1954] HCA 80; (1954) 91 CLR 136
Browns Transport Pty Ltd v Kropp - [1958] HCA 49; (1958) 100 CLR 117
Peterswald v Bartley - [1904] HCA 21; (1904) 1 CLR 497
Crothers v Sheil - (1933) 49 CLR 399
Hartley v Walsh - [1937] HCA 34; (1937) 57 CLR 372
Hopper v Egg and Egg Pulp Marketing Board (Vict) - [1939] HCA 24; (1939) 61 CLR 665
Atlantic Smoke Shops Ltd v Conlon - (1943) AC 550
Brewers and Maltsters' Association of Ontario v Attorney-General for Ontario - (1897) AC 231
John Fairfax & Sons Ltd and Smith's Newspapers Ltd v New South Wales - (1927) 39 CLR 139
Browns Transport Pty Ltd v Kropp (1958) - [1958] HCA 49; 100 CLR 117
Hughes and Vale Pty Ltd v State of New South Wales - [1953] HCA 14; (1953) 87 CLR 49
Bank of Toronto v Lambe - (1887) 12 App Cas 575
Jones v Whittaker - (1870) LR 5
Attorney-General for British Columbia v Kingcome Navigation Company - (1934) AC 45
Bergin v Stack - [1953] HCA 53; (1953) 88 CLR 248
Meredith v Fitzgerald (1948) - [1948] HCA 11; 77 CLR 161
Attorney-General (NSW) v Homebush Flour Mills Ltd - [1937] HCA 3; (1937) 56 CLR 390
John Fairfax & Sons Ltd v New South Wales - [1927] HCA 3; (1927) 39 CLR 139
Henriksen v Grafton Hotel Ltd - [1942] 2 KB 184
Attorney-General for Manitoba v Attorney-General for Canada - (1925) AC 561
Brewers and Maltsters' Association of Ontario v Attorney-General for Ontario - (1897) AC 231
Sharpe v Wakefield - (1891) AC 173
Reg v Flintshire County Council County Licensing (Stage Plays) Committee Ex parte Barrett - (1957) 1 QB 350
Lancashire v Staffordshire Justices - (1857) 26 LJMC 171

Hearing date: 19-21 May 1959
Judgment date: 26 February 1960

Melbourne

---

Judgment by:
Menzies J

This case, which was argued upon demurrer by the defendants to the whole of the plaintiff's statement of claim, calls for the determination of the validity of two provisions of the Licensing Acts of the State of Victoria. The first is that which requires the payment of a licensing fee for a victualler's licence for specific premises of an amount equal to six per cent of the gross amount paid or payable for all liquor which, during the twelve months ended on the 1st June preceding the date of the application for the licence, was purchased for the premises. The second requires the payment for a temporary licence to sell liquor of 1 pound for each day of the currency of the licence together with a further fee equal to six per cent of the gross amount paid or payable for all liquor purchased for sale or disposal under such licence. The plaintiff was during the year 1958 the licensee of the Tower Hotel, Auburn, in the State of Victoria and the holder of a number of temporary licences. It is alleged that it paid 12,702 pound 15s. 0d. for the renewall of its victualler's licence for the year 1st January to 31st December 1958 and a sum of 68 pounds 6s. 6d. for temporary licences over the period 21st January 1958 to 5th July 1958. These sums, totalling 12,771 pounds 1s. 6d., it alleges were demanded from it under invalid provisions of the Licensing Acts, were paid by it involuntarily, and are recoverable as money had and received. (at p579)

2. Although this action is concerned with payments made prior to 1st April 1959, when the Licensing Act 1958 (No. 6293) came into operation, it is convenient to follow the course taken at the hearing and to refer to that consolidating and amending Act rather than to the preceding legislation. Nothing turns upon any of the amendments made by the 1958 Act. In the 1958 Act, the relevant provision relating to victuallers' licences is s. 19 (1) (a), and that relating to temporary licences s. 19 (1) (b). It is the validity of these provisions that the plaintiff denies and that the defendants by their demurrer assert. What is claimed by the plaintiff is that the fees exacted are duties of excise and accordingly, by reason of s. 90 of the Constitution, their imposition by s. 19 of the Licensing Act is something outside the power of the Parliament of the State of Victoria. (at p579)

3. The fees in question, and other like fees covered by s. 19, are imposed as part of the State's detailed control of the liquor trade which is effected by the Act. The key provision is s. 154, which penalizes the selling of any liquor otherwise than by, or on behalf of, a licensed person in accordance with the provisions of a licence. The scheme of the Act is to provide for the granting of various types of licences to sell liquor from the point of production (e.g., brewers) through wholesale dealings (e.g., spirit merchants) down to the point of retail sale (e.g., licensed victuallers). It is part of the statutory shceme that there should be a licensing fund to be applied (subject to particular deductions) towards the carrying out of the provisions of the Act, including the payment of compensation to owners and occupiers of licensed premises deprived of licences under the Act: ss. 290-292. It is into this fund that all licence fees must be paid: s. 289. It was argued, with a good deal of persuasive force, that in a general way, the Act is concerned to raise as revenue for the fund six per cent of the value of all liquor sold by licensed persons to non-licensed persons; it is, however, necessary to examine the matter in some detail. Starting at the production end, a vigeron seeking a licence is required to pay an annual fee of 7 pounds 10s. 0d. and no more; under such a licence, the licensee may, in accordance with s. 13, sell from his vineyard wine of his own making. For a brewer's licence a person is required to pay 10 pounds 0s. 0d. per annum and a further fee of six per cent of sales to unlicensed persons during the preceding year. For a spirit merchant's licence a person is required to pay 40 pounds 0s. 0d. per annum and a further fee equal to six per cent of sales to unlicensed persons during the preceding year; for a grocer's licence, a fee equal to six per cent of liquor purchased and not disposed of to a licensed person during the preceding year; for an Australian wine licence, a fee equal to six per cent of purchases during the preceding year; and for a victualler's licence or a packet licence, a fee equal to six per cent of purchases for the licensed premises or ship. When a club licence is granted, a fee is payable equal to six per cent of purchases during the preceding year. A person seeking a temporary licence is required to pay a fee of 1 pound 0s. 0d. for each day the licence is in force and a further fee equal to six per cent of purchases for sale under the licence. In the foregoing enumeration the phrase "the preceding year" is used in the sense of the twelve months ended on the last day of June preceding the date of the application for the grant or renewal of licences or for the club registration. It is the duty of the Licensing Court to fix finally and conclusively in every case the amount of any fee payable on a percentage basis under the Act. Where an application is made for a new licence or a new club registration, the percentage fee is seemingly charged upon the Licensing Court's estimate of the amount of liquor which is likely to be purchased for sale under the licence during the period of the licence. (at p580)

4. From the foregoing statement, it can be seen that there are gaps which make the general proposition that the Act is concerned to raise as revenue six per cent of the value of liquor sold by licensed persons to non-licensed persons not wholly accurate. One gap relates to sales by vignerons; another (and one more important for present purposes) is that with the possible exception of the case where there is a purchase for sale under a temporary licence, neither the purchase nor the sale of liquor is the occasion for any impost - the fee based upon past purchases or sales is payable only if and when there is an application for a licence to sell liquor in the future, and at the point of purchase or sale it can never be said that a liability to pay is incurred. It is only if there is a successful application for a renewal of licence that a fee based upon past purchases or sales becomes payable. This, as will appear later, seems to me to be a matter of great significance by itself even if it be that the number of licences not renewed is comparatively small. At the same time I see no reason to dismiss from consideration the fact, commonly known, that some licences are not renewed or to disregard as insignificant the quality of liquor sold under licences not renewed. (at p581)

5. It is convenient at this point to refer to s. 19 (3), which provides that where a licensed victualler is not the owner of the licensed premises, he may pass on three-eighths of the percentage fee to the owner of the premises. The significance of this provision for present purposes is that it shows that it was not in the contemplation of the legislature that the whole of the percentage licence fee should be passed on to consumers or borne by the licensed victualler. It is, however, proper, I think, to deal with this case on the basis that some part of the fee would be passed on to consumers so that licence fees would not fall outside the economists' category of indirect taxes. (at p581)

6. In the course of the hearing, Mr. Gowans, for the plaintiff, traced for us the history of the provisions of the Licensing Acts imposing licensing fees, which showed that up to 1906 the fee payable by a licensed victualler was based upon the value of the premises licensed but, in that year, provision was made for the payment of fees amounting to three per cent of the value of liquor purchased during a past year. These fees were to be paid into a separate fund to be used to compensate licensees deprived of their licences. This 1906 Act was passed subsequently to the decision of this Court in Peterswald v. Bartley (1904) [1904] HCA 21; 1 CLR 497 . In 1916 the separate compensation fund was abolished and a general licensing fund, such as that presently constituted under ss. 288-292, was established. By that Act, the percentage fee was increased from three per cent to four per cent and, for the first time, it was required that a percentage fee should be paid for a brewer's licence and for a temporary licence. (at p581)

7. Having now stated the problems and the setting in which they arose, I turn to the Constitution and in particular to s. 90, which makes the power of the Commonwealth to impose duties of customs and excise exclusive. Leaving the cases aside for the moment, I propose to consider what can be derived from the words of the Constitution itself about the character of "duties of excise". The Constitution makes it quite clear that duties of customs and duties of excise are distinct and separate one from the other, because s. 55 provides that "laws imposing duties of customs shall deal with duties of customs only and laws imposing duties of excise shall deal with duties of excise only". The essential distinction between duties of customs and duties of excise is indicated by ss. 92 and 93. The customs duty is chargeable on the importation of goods into the Commonwealth; the excise duty is payable on goods produced or manufactured within the Commonwealth. It is true that the words in s. 93 "duties of excise paid on goods produced or manufactured in a State" do not necessarily restrict the conception of an excise duty to one paid on the production or manufacture of goods, but these words do give the only indication that the Constitution itself provides as to what is a duty of excise - except that it is something altogether distinct from a duty of customs - and there seems no reason why the provisions of s. 93 should apply to only one category of duties of excise, viz., those paid on goods produced or manufactured in a State, if there are other categories such asa duty paid on a dealing with goods after their import into a State. Section 95 contains a further indication that a customs duty is a duty upon the passage of goods into a territory in that it authorizes Western Australia, if an original State, to impose duties of customs "on goods passing into that State and not originally imported from beyond the limits of the Commonwealth". It is true that the insistence of the Constitution that a duty of customs is chargeable "on the importation" of goods or on goods "passing into" a territory does not necessarily show that there may not be duties of excise upon imported goods. These provisions do not define either duties of customs or duties of excise, and although I have spoken of duties of customs as being duties upon importation, it could well be that a duty upon exportation is also a customs duty. Moreover, if "duties of customs" is a description reserved for a duty at the point of import or export, it could be that a tax upon a dealing with goods at a point after their importation might fall within the description of a duty of excise. Theoretically, therefore, a tax upon the sale or purchase of goods after their importation could be treated as a customs duty, an excise duty, or neither one nor the other. The guidance of the Constitution itself is, however, that a duty of customs is a duty charged at the point of importation and a duty of excise is one paid on the production or manufacture of goods, and that a tax upon some dealing with goods which is neither upon importation into Australia nor upon the production or manufacture of goods in Australia, is neither a duty of customs nor a duty of excise. I cannot find in the Constitution any indication that duties of customs and of excise were grouped together as a comprehensive description of any taxation in respect of goods so as to exclude the States altogether from that field. The import, export, and production of goods seem to me to constitute such a cohesive subject matter that considerations of policy as well as of revenue might well be thought to warrant a grant of exclusive taxing power to the Commonwealth with regard thereto without going further to extend that grant to cover taxation in respect of all dealings in goods. If this were the correct view, it would not, of course, follow that a State could directly or indirectly tax goods brought into the State from another State. Section 92 would in general prevent this, and at this point it is perhaps pertinent to refer to s. 113, which is a special provision relating to intoxicating liquids, which assumes that in its absence States would have greater power over locally-produced intoxicating liquids than over such liquids "passing into any State . . . for use, consumpion, sale or storage", and it requires liquids falling in the second category to be regarded as liquids falling within the first category for the purpose of the application of State laws. The only relevant application of s. 113 to the case under consideration is that notwithstanding s. 92, all the provisions of the Licensing Act apply as validly to intoxicating liquids brought into Victoria from other States as they do to such liquids produced in Victoria for sale and consumption in Victoria. (at p583)

8. There is one other matter to be noticed. I find nothing in the language of the Constitution which would exclude from the categories of duties of customs or duties of excise, duties to be borne as well as paid by the importer or manufacturer. In other words, unless it be by the use of the words "customs" and "excise" themselves, the Constitution does not adopt the distinction between direct and indirect taxes so that, unless the usage of the words otherwise requires, an import duty on goods imported for use or consumption by the importer would be a customs duty, and a duty upon the production of goods for the producer's own use or consumption would be an excise duty, and both would be beyond the power of the Parliament of a State. (at p583)

9. I turn now to the decided cases. Peterswald v. Bartley [1904] HCA 21; (1904) 1 CLR 497 decided that a brewer's licence fees which corresponded with the lump sum portion of the licence fees covered by s. 19 (1) (g) are not duties of excise on the grounds that a duty of excise is a tax imposed upon goods in the process of manufacture, and is an indirect tax, i.e., one demanded from a manufacturer in the expectation and intention that it should be passed on. Griffith C.J., delivering the judgment of the Court, said that the word excise "is intended to mean a duty analogous to a customs duty imposed upon goods either in relation to quantity or value when produced or manufactured" and is not used "in the sense of a direct tax or personal tax" (1904) 1 CLR, at p 509 . Later, it is said: "Rejecting, then, the larger view as to the meaning of the term 'duties of excise', which found favour with the majority of the Supreme Court, and regarding the term as it is used in the Constitution, where it is limited to taxes imposed upon goods in process of manufacture, we find nothing in the State Act to show that this licence fee was other than a direct tax upon the manufacturer" (1904) 1 CLR, at p 512 . (at p584)

10. The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia [1926] HCA 47; (1926) 38 CLR 408 (the Petrol Case) decided inter alia that the Taxation (Motor Spirit Vendors) Act 1925 (S.A.) did impose a duty of excise. This Act defined "vendor" to mean "every person who sells motor spirit within the State to persons within the State for the first time . . . after the production . . . of such motor spirit within the State." It was on the basis of this definition that a tax upon vendors at the rate of 3d. a gallon on motor spirit sold was held to be an excise duty. Knox C.J. said: "The tax imposed is payable by the person who within the State for the first time sells and delivers to persons within the State motor spirit produced in the State according to the quantity of spirit sold. In the ordinary course of events the first seller within the State of such spirit is the producer. In effect, the tax is payable by every producer in the State of motor spirit on all spirit produced by him within the State, except so much thereof as is not sold or is sold for export from the State. In my opinion, such a tax is a duty of excise within the meaning of the Constitution" (1926) 38 CLR, at pp 419, 420 . The Chief Justice then examined the Victorian duty of excise on tobacco manufactured in Victoria and found no distinction between the petrol duty in question and that duty which he treated as an obvious duty of excise. With this judgment, Powers J. agreed (1926) 38 CLR, at p 436 . Isaacs J. rejected the argument that the expression "excise duties" in the Constitution should be construed as widely as the law regards it in England and agreed with the reasoning in Peterswald v. Bartley [1904] HCA 21; (1904) 1 CLR 497 . He said: "Licences to sell liquor or other articles may well come within an excise duty law, if they are so connected with the production of the article sold or are otherwise so imposed as in effect to be a method of taxing the production of the article. But if in fact unconnected with production and imposed merely with respect to the sale of the goods as existing articles of trade and commerce, independently of the fact of their local production, a licence or tax on the sale appears to me to fall into a classification of governmental power outside the true content of the words 'excise duties' as used in the Constitution" (1926) 38 CLR, at p 426 . Later, he said the second limb of the definition of vendor (i.e., that quoted earlier) "is also a contravention of s. 90 of the Constitution, even on the more limited field of excise duties that I adopt. The first sale of motor spirit, after its production either by primary or later processes, is naturally and in the ordinary course of business a sale by the producer, and a sale by him is certainly included. A tax on that sale, so described, is essentially a burden and a tax on the production of the goods" (1926) 38 CLR, at p 430 . He also said: "A tax laid expressly on the production alone of goods would affect everyone who produced them, even for personal use or consumption" (1926) 38 CLR, at p 431 . Higgins J. said: "For the purpose of s. 90 and our Constitution as a whole, customs duty is a duty on the importation or exportation whether by land or by sea; whereas excise duty means a duty on the manufacture, production, & c., in the country itself; and it matters not whether the duty is imposed at the moment of actual sale or not, or sale and delivery, or consumption" (1926) 38 CLR, at p 435 . Rich J. adopted an entirely different stand from that taken by the other members of the Court. He said that the tax was void because "it is simply an inland tax directly imposed upon the sale of a commodity and this always was and still is denominated a duty of excise" (1926) 38 CLR, at p 437 . He rejected the notion that a tax is not a duty of excise because "it is not confined to goods of home manufacture" (1926) 38 CLR, at p 437 and said: "In my opinion, the Constitution gives exclusive power to the Commonwealth over all indirect taxation imposed immediately upon or in respect of goods, and does so by compressing every variety thereof under the term 'customs and excise'. If the expression 'duties of excise' be restricted to duties upon or in respect of goods locally produced the fiscal policy of the Commonwealth may be hampered" (1926) 38 CLR, at p 437 . Starke J. said: "Duties of customs under the Constitution are duties levied upon the importation or exportation of commodities into and out of the Commonwealth. Duties of excise under the Constitution have received a definite interpretation from this Court in Peterswald v. Bartley [1904] HCA 21; (1904) 1 CLR 497 . They are duties charged upon goods produced or manufactured within Australia itself. Both are what John Stuart Mill calls indirect taxes; but that classification appears to be one of convenience rather than of strict logical division" (1926) 38 CLR, at p 438 . (at p585)

11. In John Fairfax & Sons Ltd. and Smith's Newspapers Ltd. v. New South Wales [1927] HCA 3; (1927) 39 CLR 139 (the Newspaper Case) it was decided that a tax of one half-penny upon each copy of a newspaper sold otherwise than for transmission to a place outside New South Wales was a duty of excise. The Court treated the case as covered by the Petrol Case [1926] HCA 47; (1926) 38 CLR 408 . Rich J. said: "In the recent case, The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia (1926) [1926] HCA 47; 38 CLR 408 , I was of the opinion that the expression 'duties of excise' found its way into the Constitution, ss. 86, 90 and 93, without any precise connotation. And I considered that the expression was not restricted in its denotation to duties upon or in respect of goods of local production but comprised inland duties upon or in respect of goods wherever produced. . . . I gather, however, from the opinions of the majority of the Court in the South Australian case, that they hold that the expression 'duties of excise' is used in the Constitution with the restricted meaning. Even so, I think it is clear that the proposed tax is an excise duty because the newspapers in question are material things or commodities produced or manufactured for sale in New South Wales" (1927) 39 CLR, at pp 146, 147 . (at p586)

12. Attorney-General (N.S.W.) v. Homebush Flour Mills Ltd. [1937] HCA 3; (1937) 56 CLR 390 (the Flour Case) decided that the Flour Acquisition Act 1931-1933 (N.S.W.) imposed a duty of excise. The decision is important here only because of the statements as to what makes a tax a duty of excise. Latham C.J. said: "In so far as it is paid in respect of flour produced or manufactured in New South Wales it is plainly an excise duty within the narrowest definition of that term (Peterswald v. Bartley (1904) 1 CLR, at p 509 ). The flour in question in this case was gristed in New South Wales from wheat grown in New South Wales. But though the flour is acquired upon production (s. 3 (2)) the difference between the two prices becomes payable by the miller only upon resale of the flour to him by the Government (ss. 6 (3) and 6 (5)). But a tax payable on the occasion of the sale of goods is also an internal revenue duty by way of indirect taxation amounting to an excise duty" (1937) 56 CLR, at pp 400, 401 . Rich J. said: "In The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia (1926) 38 CLR, at p 437 , I expressed the opinion that s. 90 gives exclusive power to the Commonwealth over all indirect taxation imposed immediately upon or in respect of goods, and does so by compressing every variety thereof under the term 'customs and excise'. I said that I was not aware of any authority which explicitly denied the application of the word excise to duties upon goods collected in respect of use, consumption or sale because the duty is not confined to goods of home manufacture. These views I repeated in John Fairfax & Sons Ltd. and Smith's Newspapers Ltd. v. New South Wales (1927) 39 CLR, at p 146 . But I said that I gathered from the opinions of the majority of the court in the South Australian Case [1926] HCA 47; (1926) 38 CLR 408 that they held that the expression 'duties of excise' was used in the Constitution with the restricted meaning, that is, restricted to duties upon or in respect of local production. I remain of the opinion which I expressed in those cases, but the limitation to goods of local production is of no importance in the present case" (1937) 56 CLR, at p 403 . Starke J. said: "Excise duties have often been described as inland imposts levied upon articles of manufacture or sale, and also upon licences to pursue certain trades or deal in certain commodities. But this court, in Peterswald v. Bartley [1904] HCA 21; (1904) 1 CLR 497 denied that the words were used in this extended sense in the Constitution: the Constitution limited the words to duties charged upon goods produced or manufactured in Australia itself or upon a sale of such commodities" (1937) 56 CLR, at p 408 . McTiernan J. said: "The occasion for levying the liability created by the Act on a miller or any person exercising the power to sell any flour is the sale of such flour. In my opinion the liability is therefore an excise tax on flour" (1937) 56 CLR, at p 421 . (at p587)

13. In Matthews v. Chicory Marketing Board (Vict.) [1938] HCA 38; (1938) 60 CLR 263 , the Court by a majority held that a levy on producers of 1 pound for every halfacre of land planted with chicory was a duty of excise. The real division between the members of the Court was whether a tax that has no relation to the quantity or value of goods can yet be a duty of excise. The minority (Latham C.J. and McTiernan J.) held the view that it could not; the majority decided that it could, and, as was said by Starke J.: "It remains a tax in respect of the commodity produced for sale" (1938) 60 CLR, at p 286 and later: "It still remains a tax or levy upon production for sale. Such a tax or levy is usually and normally susceptible of being passed on, which assists the conclusion that it is an excise duty" (1938) 60 CLR, at p 286 . The most important judgment for present purposes is, however, that of Dixon J., (as he then was), who, after a comprehensive examination of the use of the expression "duties of excise" in statutes, decisions, dictionaries and writings of economists, said: "The chief purpose of the foregoing discussion of the considerations governing the connotation of the word 'excise' is to show that, although, as it is used in the Commonwealth Constitution, it describes a tax on or connected with commodities, there is no ground for restricting the application of the word to duties calculated directly on the quantity or value of the goods. A definition which makes quantity and value the only basis of taxation which would satisfy the notion of 'excise' has no foundation either in history, economic or fiscal principle, nor in any accepted specialization. The basal conception of an excise in the primary sense which the framers of the Constitution are regarded as having adopted is a tax directly affecting commodities" (1938) 60 CLR, at pp 302, 303 . His Honour also said: "The history of the word 'excise' does not disclose any very solid ground for saying that, according to any established English meaning, an essential part of its connotation is, or at any time was, that the duty called by that name should be confined to goods of domestic manufacture or production. The application of the word by economists and others to duties so confined is scarcely logical proof that the word is inapplicable to inland duties levied on commodities independently of the place of manufacture. But, of course, it is a factor to be weighed, and context and other considerations may show that the word is so restricted. Whether the limitation of the word 'excise' in the Constitution to duties upon commodities produced or manufactured within Australia is justified is a question which I think should be regarded as open for future decision" (1938) 60 CLR, at p 299 . At the end of his judgment, his Honour, described a duty of excise as follows: "To be an excise the tax must be levied 'upon goods,' but those apparently simple words would permit of much flexibility in application. The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. But if the substantial effect is to impose a levy in respect of the commodity the fact that the basis of assessment is not strictly that of quantity or value will not prevent the tax falling within the description, duties of excise" (1938) 60 CLR, at p 304 . (at p588)

14. The next case is Parton v. Milk Board (Vict.) [1949] HCA 67; (1949) 80 CLR 229 , where it was held that s. 30 (1) (a) of the Milk Board Acts 1933-1939, which provided for dairymen paying an amount not exceeding 1/4d. per gallon of milk sold or distributed in the metropolis, authorized a duty of excise, and that the amount of 1/8d. per gallon fixed by regulations and determinations as the amount of contribution was a duty of excise. The decision was that of a majority (Rich, Dixon and Williams JJ.; Latham C.J. and McTiernan J. dissenting). The difference of opinion was upon the question whether a tax, not imposed upon a producer of milk but imposed upon a sale made after the producer has disposed of milk to a dairyman, is a duty of excise. Rich and Williams JJ. said that a levy imposed at some stage subsequent to manufacture might be a duty of excise and stated: "It must be imposed so as to be a method of taxing the production or manufacture of goods, but the production or manufacture of an article will be taxed whenever a tax is imposed in respect of some dealing with the article by way of sale or distribution at any stage of its existence, provided that it is expected and intended that the taxpayer will not bear the ultimate incidence of the tax himself but will indemnify himself by passing it on to the purchaser or consumer" (1949) 80 CLR, at p 252 . Dixon J. described the levy as a sales tax and said: "As I understand it that is generally regarded as an excise" (1949) 80 CLR, at p 259 . He added: "Finally it falls within the definition of 'excise' given by the Encyclopaedia Britannica, 11th ed., vol. 10, and adopted by the Oxford English Dictionary s.v. viz.: 'a term now well known in public finance, signifying a duty charged on home goods, either in the process of their manufacture or before their sale to the home consumers.' Only if the conception of what is an excise is limited by the condition that the tax must be levied on the manufacturer, that is to say upon the goods while they are still in his hands, can I see any escape from the conclusion that the levy of the contribution is an excise. I cannot adopt the view that this is an essential feature of the conception. What probably is essential is that it should be a tax upon goods before they reach the consumer" (1949) 80 CLR, at pp 259, 260 . Then in deference to Atlantic Smoke Shops Ltd. v. Conlon (1943) AC 550 , his Honour modified his statement on the meaning of the word "excise" already quoted from Matthews Case [1938] HCA 38; (1938) 60 CLR 263 by excluding from the conception of excise a tax on commodities levied at the point of consumption (1949) 80 CLR, at p 261-2 . (at p589)

15. The last case is Browns Transport Pty. Ltd. v. Kropp [1958] HCA 49; (1958) 100 CLR 117 , which decided - as Dixon C.J., Williams and Webb JJ. had previously decided in Hughes and Vale Pty. Ltd. v. State of New South Wales [1953] HCA 14; (1953) 87 CLR 49 - that a levy of road charges upon a transport operator did not amount to a duty of excise because it is not a tax upon commodities; rather it is a tax on a carrier because he carries goods by motor vehicle. (at p589)

16. This survey of the Australian cases shows that the position has now been reached that although an excise duty is a tax on the production or manufacture of goods, a tax upon the sale or purchase of goods manufactured in Australia at any point before sale for consumption is to be regarded as a tax on production or manufacture; and furthermore, that a tax may be an excise notwithstanding that quantity or value of goods is not the basis of the duty. This position I feel bound to accept notwithstanding the reservations I would otherwise have about the glosses upon the main proposition. Although the point has not yet been finally determined, I regard the repeated statements of Rich J. that a duty imposed upon a dealing with goods which are not of home production is a duty of excise, as inconsistent with the view which still prevails and which is accepted by Rich J. himself in Parton's Case (1949) 80 CLR, at p 252 , that an excise is a tax on production or manufacture, as well as being contrary to the explicit pronouncements in Peterswald v. Bartley [1904] HCA 21; (1904) 1 CLR 497 and The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia [1926] HCA 47; (1926) 38 CLR 408 ; furthermore, the statement of Rich J. that "the Constitution gives exclusive power to the Commonwealth over all indirect taxation imposed immediately upon or in respect of goods, and does so by compressing every variety thereof under the term 'customs and excise'" (1926) 38 CLR, at p 437 is, as that learned judge himself recognized, contrary to authority; moreover, his own statement indicates that what his Honour says is based upon his conception of fiscal policy rather than upon anything in the Constitution itself. It is also to be observed that in the cases, there are many statements to the effect that an excise duty is an indirect tax, but there is a good deal to be said for the view expressed by Starke J. on more than one occasion that this particular classification is one of convenience rather than logic and the fact that a duty is "indirect" is no more than one factor in favour of the conclusion that it is an excise. This is the view taken by the Court in Browns Transport Pty. Ltd. v. Kropp [1958] HCA 49; (1958) 100 CLR 117 , but it is said: "It would perhaps be going too far to say that it is an essential element of a duty of excise that it should be an 'indirect' tax. But a duty of excise will generally be an indirect tax, and, if a tax appears on its face to possess that character, it will generally be because it is a tax upon goods rather than a tax upon persons" (1958) 100 CLR, at p 129 . This discounting of the importance of indirectness as the mark of a duty of excise (and of duties of customs too) is another reason for treating the foregoing statement of Rich J. as something other than a precise statement of constitutional law. (at p590)

17. Coming back now to the victualler's licence fee, I am disposed to regard it as an indirect tax in that not only are consumers likely to pay more for liquor than would be the case if licence fees were not charged, but, further, notwithstanding s. 19 (3), licensed victuallers probably endeavour to pass on to consumers the full amount of what they pay as licence fees; it is not, however, a sales or a purchase tax because, as I have already stated, a dealing with the goods does not expose the licensed victualler to liability for tax; the tax is upon the person seeking a licence to sell liquor upon particular premises in the future, not upon the liquor already purchased for sale at those premises although it is calculated upon such purchases; it is a tax upon persons, like that considered in Browns Transport Pty. Ltd. v. Kropp [1958] HCA 49; (1958) 100 CLR 117 , namely, a tax upon a licensed victualler as the price for his franchise to carry on a business, the most important element of which is to sell liquor from the licensed premises independently of whether the liquor is produced in Australia or abroad, or partly in Australia and partly abroad. It is not in truth a tax on the production or manufacture of liquor, and none of the decided cases require that it should be treated as such a tax. For these reasons, I have come to the conclusion that the licensed victualler's fee is not a duty of excise. In reaching this conclusion, I am fortified by the views expressed in Parton v. Milk Board (Vict.) [1949] HCA 67; (1949) 80 CLR 229 , by Latham C.J. (1949) 80 CLR, at p 248 and Dixon J. (1949) 80 CLR, at p 263 . This was also the view of Isaacs J. as appears from his statement in The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia (1926) 38 CLR, at p 426 . (at p591)

18. I find greater difficulty about the character of the fee for a temporary licence. It seems to me that once a temporary licence is granted, every purchase of liquor for sale under that licence, whether it be of local or overseas production, does attract tax at the rate of six per cent of the purchase price. In these circumstances I feel constrained by Parton v. Milk Board (Vict.) [1949] HCA 67; (1949) 80 CLR 229 to treat such fees to the extent that they are upon purchases of liquor produced in Australia, as duties of excise. As s. 19 (1) (b) is not susceptible to the application of what is now s. 3 of the Acts Interpretation Act 1958 (Vict.), I think the provision therein for a percentage fee is wholly invalid. (at p591)

19. I would allow the demurrer to so much of the statement of claim as relates to licensed victuallers' fees, and overrule it so far as it relates to temporary licence fees. (at p592)