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Administrative Appeals Tribunal of Australia |
Last Updated: 2 October 2009
DECISION AND REASONS FOR DECISION [2002] AATA 9
ADMINISTRATIVE APPEALS TRIBUNAL )
) NT2001/114-115
TAXATION APPEALS DIVISION
)
Re ANDREW PAYNE
Applicant
And COMMISSIONER OF TAXATION
Respondent
DECISION
Tribunal Deputy President J Block
Date 11 January 2002
Place Sydney
Decision Having regard to orders of the High
Court set out fully in the Reasons, the Tribunal determines that the Applicant
should not have
leave, in respect of the years of income ending 30 June 1991 and
30 June 1992 to rely on an additional ground of objection to the
effect that the
Respondent was bound by taxation ruling TR 95/19 to assess the tax payable by
the Applicant in accordance with that
ruling or, in the alternative, and if
leave should be granted, TR 95/19 does not apply in respect of the two years
aforesaid. In
addition and although not covered by the orders of the High Court
and having regard to the Applicant's contentions, the Tribunal
does not find
that the Respondent should, as a matter of fairness, assess the Applicant, in
respect of the two years aforesaid, in
accordance with
TR95/19.
..............................................
Deputy President J Block
CATCHWORDS
Effect of TR95/19 -
public rulings as a system - whether a Public Ruling can apply or be binding
prior to 1 July 1992 - administrative
fairness - correct and preferable
decision
Taxation Administration Act 1953
Taxation Laws
Amendment (Self Assessment) Act 1992
Taxation Ruling IT
2199
TR 95/19
Case 26/97 [1997] AATA 163; (1997) 97 ATC 296
David Jones Finance &
Investments Pty Ltd v Federal Commissioner of Taxation (1990) 90 ATC
4730
Payne v Federal Commissioner of Taxation 98 ATC
4703
Commissioner of Taxation v Payne [1999] FCA 320; (1999) 90 FCR 435
Commissioner of Taxation v Payne [2001] HCA 3; (2001) 202 CLR 93; 177 ALR 270
Federal Commissioner of Taxation v Swift (1989) 18 ALD 679
Wentworth v Wentworth, unreported, NSWSC, 6 February 1998
Lunney and Hayley v Federal Commissioner of Taxation [1958] HCA 5; (1958) 100 CLR 478
REASONS FOR DECISION
Deputy President J Block
1. (a) This matter originally came
before me in 1997 (NT96/184-187) and my decision in respect of the relevant
objection decision
was handed down on 16 May 1997 and reported as AAT case
26/97(1997) [1997] AATA 163; 97 ATC 296. That decision (referred to in these Reasons as the
"original decision") affirmed the objection decision except for the remission
of
all penalties. The Applicant, in respect of each of the years ending June 1991
to June 1994 (inclusive), claimed deductions for
the cost of travel incurred
between Tamworth (where he had his home and at which he conducted a deer farm)
and Sydney where he was
employed as a pilot. The two activities were not
connected with each other.
(b) The original decision was appealed by the Applicant. The appeal was heard
by Foster J; in his judgement ("the Foster judgement")
which was reported as
Payne v Federal Commissioner of Taxation (1998) 98 ATC 4703 Foster
J allowed the appeal and remitted the matter to the Tribunal for
reconsideration.
(c) The Foster judgement was appealed to the Full Federal
Court by the Respondent; in its judgement ("the Federal Court judgement"),
the
Full Federal Court (Hill, Sackville & Hely JJ) by majority (with Hill J in
the minority) affirmed the Foster judgement. The
Full Federal Court judgement
was reported as Commissioner of Taxation v Payne [1999] FCA 320; (1999) 90 FCR 435. The
Respondent then sought and obtained leave to appeal to the High Court; which by
majority (Gleeson CJ, Kirby and Hayne JJ) allowed
the appeal but remitted the
matter to the Tribunal. The full orders of the High Court read as follows:
" 1. Appeal Allowed.
2. Set aside orders 1 and 2 of the orders of the Full Court of the Federal Court of Australia made on 30 March 1999 and in lieu thereof order:
Appeal allowed.
Set aside orders 1 and 2 of the orders made by Foster J on 2 July 1998 and in lieu thereof order:
that the matter be remitted to the Tribunal for consideration of the questions:
first, whether the taxpayer should have leave in respect of any of the years of income ended 30 June 1991, 1992, 1993 or 1994 to rely on an additional ground of objection to the effect that the Commissioner was bound in respect of Taxation Ruling TR 95/19 to assess the tax payable by the taxpayer in accordance with that ruling; and
second, if leave is granted, whether and to what extent the Commissioner was so bound.
(ii) otherwise, appeal dismissed."
The High Court judgement was reported as Commissioner of Taxation v
Payne [2001] HCA 3; (2001) 202 CLR 93; 177 ALR 270.
2. (a) The Applicant was
represented by Mr A O'Brien of Counsel instructed by Harris McHugh Lawyers of
Tamworth, while the Respondent
was represented by Mr S Gibb, SC of Counsel
instructed by Mr Denis Stokes of the Australian Government Solicitor.
(b) A
few days prior to the date of the hearing (19 December 2001) the Tribunal
received notice that the parties had entered into
terms of settlement in respect
of the years ending June 1993 and June 1994, leaving in issue only the years
ending June 1991 and
June 1992 (referred to in these Reasons as "the relevant
years").
3 (a) The Tribunal file, as furnished to me a few days prior to the
hearing contained only the original decision, the High Court judgement,
a letter
dated 30 May 2001 by one R A Prince (which in the result proved to be totally
irrelevant) and a memorandum as to a conference
held some time ago. The parties
submitted lists of authorities, but at a late stage, and so that they were
received by me only after
entering the hearing room.
(b) At the commencement
of the hearing I asked the two barristers to inform me as to the issues, and in
particular whether there were
not other documents which might be relevant or
helpful. It was at this stage that Mr Gibb furnished the Tribunal with the
Appeal
Book, in two volumes, in respect of the hearing in the High Court. The
pages of the Appeal Book are numbered sequentially so that
page numbers cited in
these Reasons refer to volume one or volume two of the Appeal Book as
appropriate. Mr Gibb also furnished me
with a letter from the Australian
Government Solicitors to the Applicant's solicitors dated 11 December 2001 and a
letter by the
Applicant's solicitors in reply dated 17 December 2001.
(c) It
transpired that the Applicant's counsel did not have the Respondent's list of
authorities. While my associate was out of the
hearing room preparing a
photocopy, I made a comment to the effect that the progress of this matter
through the courts, coupled with
differences of view as between the various
judges who heard it, had come as something of a surprise to me, given that I had
not thought,
notwithstanding the length and comprehensive nature of the original
decision, that in the light of the judgement in Lunney (Lunney and
Hayley v Federal Commissioner of Taxation (1958)100 CLR 478) the matter was
very complicated. I noted furthermore that the nature of the subsequent
litigation indicated that
the matter was apparently rather more complex than I
had first realised. I noted also that I found it odd, that, notwithstanding
the
fact that the Respondent had seen fit to appeal both the Foster judgement and
the Full Federal Court judgement all the way to
the High Court, the government
has recently announced that legislation is to be introduced in order to amend
the law so as to allow
deductions for travel between two unrelated places of
business. I emphasise that I made these remarks purely as a matter of interest,
and by way of pleasantry, and to fill in the time while photocopies were made,
and having regard in particular to the fact that the
litigation in question had
over a period of years involved a number of eminent counsel, and including both
of Messrs Gibb and O'Brien.
(d) Mr O'Brien explained to me that he would be
seeking to argue that TR 95/19 ("the Public Ruling") applied so as to bind the
Respondent
prior to 1 July 1992 when the public ruling system and the
self-assessment system came into effect. I noted that such an argument
appeared
to me prima facie to be one which would not be easy to run (and the term
"courageous" was used in this context) given that the public ruling system
came
into effect only as from 1 July 1992.
4 (a) Before argument proper
commenced, I reminded Mr O'Brien I was the Senior Member who had heard the
matter originally, and that
if his client wished to object to my hearing this
matter he should do so then, since to do so at some later stage would not be
competent.
In particular, and in respect of the original decision I noted that
there was no issue whatever as to the credibility of the Applicant,
which was
accepted totally, and that the original decision had been decided (excepting
only as regards penalties and then in favour
of the Applicant) purely as a
matter of law and that furthermore the only outstanding issue before me appeared
to be a matter of
law. I noted however that actual bias and apprehended bias may
be differing concepts and that I might be inclined to entertain an
application
for my own disqualification on the basis of apprehended bias, even though and as
I noted at the time, the Applicant had
become aware prior to the hearing date
that the matter was listed for hearing before me. That statement was made before
hearing from
Mr Gibb and at a time when I was not aware of certain other
relevant considerations referred to later in these Reasons.
(b) After a
brief adjournment to enable Mr O'Brien to take instructions, Mr O'Brien asked me
to disqualify myself on the grounds
of apprehended bias. He cited three reasons;
two of those reasons were the remarks by me referred to previously in these
Reasons
being firstly the remarks as a matter of interest in respect of the
subsequent litigation and secondly my remark as to the fact that
it might be
difficult to run an argument as to the applicability of the public ruling prior
to the public ruling regime coming into
effect; the third ground related to my
conduct of the original hearing at which, so it was alleged, I had on occasion
cut the Applicant
short. That third allegation was unfounded; as the transcript
(which is included in the Appeal Book) in respect of the original hearing
indicates, there is no truth whatever in it. On the contrary, I allowed the
Applicant to give evidence at the original hearing without
restriction. (It may
be noted that the Applicant was then represented by Mr D B McGovern of Counsel
who is very experienced in tax
matters.) I noted also that although at the
original hearing I had accepted that the Applicant conducted a deer farm at his
home
in Tamworth, I had nevertheless allowed the Applicant (at his own
insistence), to show in full a lengthy video of the activities
conducted
therein, and even though that showing was unnecessary.
(c ) Mr Gibb pointed
out in reply that in the first half of 2001, and at the conference attended by
Mr O'Brien, the parties were
advised that I would be listed to hear this matter,
and that Mr O'Brien did not object. Moreover in September 2001 the parties were
informed by the Registry staff of the Tribunal that there was no member
available to hear the matter in November 2001 but that I
had dates available in
December 2001. The parties agreed that I should hear the matter in December
2001. This is the information
which was not known to me when Mr O'Brien applied
for my disqualification. In respect of both of these aspects, Mr O'Brien
accepted
that Mr Gibb's contentions in this regard were correct.
(d) Mr Gibb
cited authority supporting the proposition that there is no invariable rule that
a remitted matter be heard by a differently
constituted Tribunal. Moreover he
contended that there are instances where for the original Tribunal to hear the
remitted matter
is advantageous as far as the parties are concerned, in that the
remitted matter will be heard by a Tribunal which is cognisant of
all of the
relevant ramifications.
(e) Mr Gibb argued also that to demonstrate
apprehended bias it must be shown that a third party observer might on
reasonable grounds
feel that the matter would not be fairly decided.
(f) In
refusing the disqualification application (and indeed, and in my view, to have
granted it would have been manifestly unjust
to the Respondent) I referred the
parties to the decision of Santow J in Wentworth v Wentworth, unreported,
NSWSC, 6 February 1998 and where I noted that the authorities indicate
that a judge should not lightly abandon his bench and moreover that remarks made
during
the proceedings may assist the parties since it gives them the
opportunity if so desired to endeavour to persuade the judge otherwise.
(g)
The disqualification application, was as I have said based on one ground which
was demonstrably false; I refer in this context
to the suggestion that the
Applicant was in some way hampered during the original hearing. Remarks as to
the applicable public ruling
system were designed to be helpful, and to indicate
to Mr O'Brien that his case was not an easy one (and of which he must have been
aware). Mr O'Brien is too experienced a lawyer not to appreciate that to
persuade a Tribunal that it should apply a public ruling
before it became
effective could never be easy. The ground referable to my remarks as to the
subsequent litigation demonstrates the
paucity of the application; to read bias
into my reference to the litigation which followed the original decision is
simply ludicrous.
(h) Nevertheless, it is at least arguable that the remarks
in question (or perhaps some of them) were unnecessary, and I regret that
I made
them.
5. What then is this case all about? It can conveniently be summarised
in the following manner:-
(a) As from 1 July 1992 (but not previously) a
public ruling system was brought into effect in connection with the
self-assessment
regime which commenced at the same time.
(b) A public ruling can bind the Respondent in the circumstances set out in the Taxation Laws Amendment (Self Assessment) Act. Part IVAAA of the Taxation Administration Act sets out the public ruling provisions and what is necessary for a ruling to be a binding public ruling. (See also in this regard TR 92/1 which is included in the Appeal Book). A public ruling will inter alia be a binding public ruling only when it contains a statement that it is a public ruling, and is published on or after 1 July 1992. Moreover a public ruling cannot apply to any arrangement commenced before 1 July 1992.
(c) A public ruling can apply for the benefit of a taxpayer both after and prior to its date of issue but not prior to 1 July 1992; put in other words the relevant "arrangement" as defined must have commenced after 1 July 1992. Under the terms of the High Court orders referred to previously in these Reasons, the Applicant must first apply for leave to rely on an additional ground of objection
" ...to the effect that the Commissioner was bound in respect of Taxation Ruling TR 95/19 to assess the tax payable by the taxpayer in accordance with that ruling...."
(d) (i)The Australian Government Solicitor in its letter to the Applicant's solicitors dated 11 December 2001 asked the Applicant to specify the relevant "facts and circumstances" in the following terms:
"I refer to the hearing before the Tribunal on 19 December 2001 in respect of the years of income ended 30 June 1991 and 1992.
Would you kindly furnish as a matter of urgency, the following further and better particulars of your client's application in respect of those years -
1. Upon what facts and circumstances does the applicant rely for any contention that he should have leave to rely on an additional ground of objection to the effect that the Commissioner was bound in respect of Taxation Ruling TR 95/19 to assess the tax payable by the applicant in accordance with that ruling?
2. If the applicant contends that there was an "arrangement" within the meaning of that expression in section 14ZAAA of the Taxation Administration Act 1953 (Cth.), please identify precisely what that arrangement was, and the facts and circumstances upon which the applicant relies to establish it.
3. If the applicant contends that the arrangement had begun to be carried out so as to attract application of Part IVAAA... please specify precisely when and how that arrangement had begun to be carried out (bearing in mind that the ruling could not apply to any arrangement which began to be carried out before 1 July 1992, as Senior Counsel for the Applicant correctly acknowledged in argument before the High Court).
4. If the applicant contends that TR 95/19 applied to the applicant in relation to any part of the travelling expenditure, please identify precisely which part of the ruling (specifying paragraphs or passages) and which expenditure.
5. If the applicant contends that the income tax law (subsection 51(1) of the Income Tax Assessment Act 1936 (Cth) applied to the Applicant in relation to his travelling expenditure in a different way, please specify in what way it applied.
6. If the Applicant contends that the tax payable under the amended assessments in relation to the applicant exceeded what it would have been if TR 95/19 applied, please identify the tax payable in each case, and state how it was calculated." (Exhibit B)
(ii) The Applicant's solicitors in their reply dated 17 December 2001 said:
"1.The basis on which leave should be granted to allow the taxpayer to rely on an additional ground is firstly that there is no prejudice to the Commissioner and secondly as demonstrated by the following references the issue was one that was agitated before the Commissioner and Administrative Appeal Tribunal albeit no decision was made by either in respect of the issue:
2. The applicant does not so contend.
3. The applicant does not so contend.
4. Paragraphs 148 to 151 of TR 95/19.
5. The Commissioner was bound by his administrative practice to apply section 51(1) in accordance with his stated practice.
6. The amounts claimed as allowable deductions for the years of income ended 30 June 1991 and 1992 was $2,092 and $2,988 respectively. These amounts were not in dispute at the previous hearing before the AAT: see Reasons for Decision dated 16 May 1997 paragraph 1(c)." (Exhibit C)
The Tribunal notes, having regard in particular to clauses 2 and 3 of the
letter referred to in subclause (i) above and the replies
in the letter referred
to in subclause (ii) above, that the Applicant did not furnish details of the
relevant arrangement and facts
and circumstances. It is on this basis that the
Respondent contended that unless and until the Applicant specifies the basis on
which
he seeks leave, the Tribunal does not have jurisdiction to hear this
matter. It is clear of course that when the original decision
was handed down,
the Tribunal became functus officio in that its function must now of
necessity be confined to the boundaries of the High Court orders. In accordance
with the High Court
orders the Tribunal must first determine whether leave to
amend should be granted and if granted whether TR95/19 applied in favour
of the
Applicant.
(e) Although the Tribunal considers that the argument referred
to subclause (d) may well be correct, it decided nevertheless to
allow Mr
O'Brien to argue the substantive application, on the notional hypothesis that
the Tribunal had found that there was a valid
basis upon which the original
objection could and should be amplified.
6. It is convenient at this juncture to consider (albeit briefly) the Public
Ruling and the manner in which it was dealt with in the
various hearings.
(a) the Public Ruling was not referred to in the objection; so much is
clear from the fact that an amendment is required.
(b) At the original hearing there was a brief reference to the Public Ruling; there was reference at greater length to IT 2199 (the "non-public ruling").
(c) In respect of the original decision, and as set out previously, I remitted the penalties entirely; clauses 10(c) and 10(d) of the original decision read as follows:
"(c ). The Respondent's argument, however, was identical in respect of both regimes, namely that the Applicant failed to take reasonable care in returning his income. The Respondent points towards the existence of various rulings, such as Taxation Ruling IT 2199 and Miscellaneous Tax Ruling MT 2027 (the 'Rulings') in support of this position, claiming that the law was made manifestly clear in each of these instruments, and that had the Applicant consulted these rulings and correctly read them he would not have returned his income as he did, or at least, that there would have been sufficient doubt as to whether he could claim the deduction such as to necessitate further inquiries. I am not, however, persuaded by these arguments.
(d)The Rulings are far from clear in their treatment of the fact situation which concerned the Applicant, namely that of travel between a place of business and an unrelated place of full-time employment. Taxation Ruling IT 2199 (the conclusions of which are adopted in a number of subsequent rulings, including MT 2027 and relevantly Taxation Ruling TR 95/19) makes a distinction (which, I might add, I am not convinced is altogether helpful) between, on the one hand, the situation of travel between a business or place of full-time employment and a home based part-time employment; and on the other travel between a place of business or full-time employment and a home based full-time employment. It treats the expenses of the former situation as non-deductible, but does not deal at all with the latter situation. In fact the tenor of the Ruling gives rise to the inference that travel between "two places of employment or business" (see paragraph 4 and 9) when found as a fact, will automatically be deductible, an interpretation with which I do not agree." (Exhibit D)
(d) The Foster judgement dealt in the main in this context with the non-public ruling; I refer to the following extract from the Foster judgement (p 327 of the Appeal Book):
"It appears from portions of the transcript of the hearing before the Tribunal, to which I was taken by counsel for the applicant, that an issue in these terms was sought to be raised before the Tribunal. It is submitted on behalf of Mr Payne that an agreed issue was in fact presented to the Tribunal for determination, namely that the deduction should be allowed if the circumstances fell within the wording of IT 2199. The Tribunal's failure to determine this issue, it is now submitted, amounted to a denial of procedural fairness. I have read and considered the passages to which I have been taken. In my view they do not support the applicant's contention. The matter was raised in what I regard as a tentative way at the beginning and at the end of the proceedings. In my view, it would reasonably have appeared to the Tribunal to be no more than a statement of an expectation on the part of the applicant that the Commissioner would concede that this was an issue for determination. The concession was, quite clearly, not made. In my view, the Tribunal was amply justified in regarding the matter of compliance or non-compliance with IT 2199 as going only to the question of whether penalties should have been imposed. As I have already indicated, the learned Senior Member considered that it was not unreasonable that the applicant should have been misled by the ambiguity of IT 2199 and consequently set aside the penalties. This aspect of the Tribunal's determination has not been made the subject of a cross-appeal to this Court. I do not consider that any procedural unfairness in the proceedings before the Tribunal has been demonstrated. Accordingly, I reject this ground of appeal." (Exhibit E)
(e) That the Public Ruling did not figure before the Tribunal is clear also from the Federal Court judgment; (see p 383 of the Appeal Book) as follows;
"Taxation Ruling TR 95/19
The taxpayer contended that the AAT committed an error of law in failing to determine whether the Commissioner was obliged to issue an assessment in accordance with public ruling TR 95/19 if the public ruling was contrary to law. In view of the conclusion which we have reached, it is not necessary for detailed consideration to be given to the various problems which are or may be associated with the taxation ruling. It is sufficient to say that this matter was not raised before AAT for its determination and that this may well be an insurmountable barrier to the taxpayer being able to rely on the point in this Court: see Glennan v Federal Commissioner of Taxation (unreported, Full Federal Court, 26 March 1999)." (Exhibit F)
(f) The minority judgement in the High Court, in dealing with the Public Ruling and at p 21, reads:-
"That conclusion makes this appeal an inconvenient occasion to determine whether the decision of the Full Court should be affirmed but on a ground other than that relied upon by the majority. The further ground is said to be that the AAT committed an error of law in failing to determine whether the Commissioner was obliged to issue an assessment which allowed a deduction to the taxpayer in reliance upon a public ruling, TR 95/19. There is a dispute between the parties as to the extent to which the application of this public ruling was ever raised for determination by the AAT. The Notice of Appeal to the Federal Court asserted an error of law by the AAT by its alleged failure to determine whether the facts as found fell within the terms of a "non-binding" ruling, IT 2199. No error of law was asserted respecting TR 95/19. Not surprisingly, Foster J did not consider TR 95/19. The point was apparently agitated in the Full Court but was not determined by it. The taxpayer seeks to raise the matter in this Court by a proposed Notice of Contention. Given the lapse of time since the filing and service of the Notice of Appeal in December 1999, leave to the filing of the Notice of Contention is required by O 70 r 6(5) of the High Court Rules. Leave is opposed and in the circumstances it should be refused." (Exhibit G)
However the majority in the High Court made the orders referred to earlier in
these Reasons.
7 (a) Mr O'Brien (citing David Jones Finance and
Investments Pty Ltd v Federal Commissioner of Taxation (1990) 90 ATC 4730)
contended that the Respondent should determine matters fairly; to do so fairly
(so he argued) in respect of the relevant years requires
that they be determined
as if the Public Ruling were then in force. This would result, so he contended,
in the correct and preferable
decision. He contended furthermore that the
Tribunal, standing in the shoes of the Respondent, should deal with the matter
in exactly
the same manner. Mr O'Brien presented the Tribunal with written
submissions; clause 12 of his written submissions reads as follows:
"It is obvious that the Commissioner is possessed of a power that allows him to apply the law contrary to determinative decisions of the court, even where the provision being considered does not confer a discretion on the Commissioner. Presumably this power flows from section 8 of the Income Tax Assessment Act 1936 pursuant to which the Commissioner is mandated to attend to the general administration of the Act. It is often stated by the courts that the AAT "stands in the shoes of the Commissioner". Even if the view is formed that the Commissioner has not acted unfairly in the current context such that his action is capable of judicial review (which is not admitted), it does not mean that the AAT in re-exercising the power and performing its administrative function cannot decide the matter in a different manner in order to achieve a more fair or preferable result in all the circumstances of the case ie, from an administrative prospective [sic] a more desirable outcome." (Exhibit G)
(b) Mr Gibb referred the Tribunal to Commissioner of Taxation v Swift (1989) 18 ALD 679 and in particular to a passage in p 692 reading as follows:
"In the absence of any statutory direction, the Tribunal is not bound to apply the administrative policies by which the exercise of the discretion under review is regulated at the primary decision-making level. In particular, it was not bound in this case to apply taxation ruling IT 2063 to which reference has already been made." (emphasis added)
8 (a) As set out previously in these Reasons the parties have entered into
terms of settlement in respect of the 1993 and 1994 years;
and pursuant to which
the Applicant has been allowed the deductions claimed by him. It would appear
then that the Respondent has
accepted that the Public Ruling, in respect of
those two years, applied in favour of the Applicant.
(b) The heading to
paragraph 148 of the Public Ruling, and that paragraph, are in the following
terms: -
"Travel between two places of employment or between a place of employment and a place of business
148. A deduction is allowable for the cost of travelling directly between two places of employment or between a place of employment and a place of business. This is provided that the travel is undertaken for the purpose of engaging in income-producing activities."
(c) It is my view that paragraph 148 might in some respects be ambiguous.
If it contained only the first sentence there would be
no ambiguity; however the
presence of the proviso in the second sentence could arguably require that the
first sentence be construed
subject to the rule in Lunney (supra), and so
that travel costs incurred in order to commence work are not deductible. It is
however unnecessary for me to decide
this issue; in respect of the 1993 and 1994
years, and as set out previously, the Respondent allowed the deductions
claimed.
(d) In respect of the relevant years the position is, in my view,
totally different. Assuming that (despite the reservations expressed
in
subclause (c)) the Public Ruling should be construed in favour of the Applicant
for the 1993 and 1994 years, the Public Ruling
was not applicable in respect of
the relevant years.
(e) It must be remembered that the Tribunal is required
under the orders of the High Court to determine two matters and two matters
only, and being firstly whether an amendment should be allowed, and if so
whether TR95/19 applied in favour of the Applicant. Since
TR95/19 did not apply
during the relevant years, and cannot benefit the Applicant during these years,
it does not matter whether
or not an amendment is allowed, since the
consequences are precisely the same. It is totally clear that the Public Ruling
did not
apply during the relevant years; this being so to allow the amendment
does not assist the Applicant. My own view is that the amendment
should not be
allowed but even if I am wrong, to allow it does not bring about any different
result.
(f) Strictly speaking and confined as I am to the terms of the orders
of the High Court there was in fact no real basis upon which
the Applicant was
entitled to present arguments as to any matters of procedural fairness and as to
what is or might be the "correct
and preferable decision." Mr O'Brien should on
this basis have confined his argument to whether the amendment should be
allowed,
and if so whether the Public Ruling assisted his client during the
relevant years. However, there was no objection at the hearing
by Mr Gibb on
this basis, perhaps because the arguments made by Mr O'Brien are so obviously
untenable.
(g) The Applicant in effect asked me to find that despite the
original decision and the High Court judgement which found that the
Public
Ruling (and for that matter the non-public ruling) was not correct in law, I
should nevertheless, as a matter of administrative
fairness and so as to produce
the correct and preferable decision (and standing in the shoes of the
Respondent) allow the deductions
claimed in the relevant years. Of course the
correctness or otherwise of the non-public ruling was in no way relevant, but in
any
event and having regard to Swift's case (supra), the non-public
ruling cannot possibly be treated as if it were in some way binding. The Public
Ruling could not, as
I have said, have applied in respect of the relevant years.
(h) I have dealt with the non-public ruling only because it was dealt with
in argument. It was, as I have said, not relevant.
(i) It follows then that
the objection decision, in respect of the relevant years must stand (except for
the remission of penalties)
simply because having regard to the orders of the
High Court; TR95/19 (the Public Ruling) does not in any way assist the Applicant
in respect of the relevant years. The determination of the question whether the
amendment sought should be allowed does not in the
end result matter, because
the outcome is in either case, the same. I note though that it is my view that
it should not be allowed.
9. In the result and having regard to orders of the High Court set out fully in these Reasons, the Tribunal determines that the Applicant should not have leave, in respect of the years of income ending 30 June 1991 and 30 June 1992 to rely on an additional ground of objection to the effect that the Respondent was bound by taxation ruling TR 95/19 to assess the tax payable by the Applicant in accordance with that ruling or, in the alternative, and if leave should be granted, TR 95/19 does not apply in respect of the two years aforesaid. In addition and although not covered by the orders of the High Court and having regard to the Applicant's contentions, the Tribunal does not find that the Respondent should, as a matter of fairness, assess the Applicant, in respect of the two years aforesaid, in accordance with TR95/19.
I certify that the 9 preceding paragraphs are a true copy of the reasons for the decision herein of J Block, Deputy President
Signed: R Savage .....................................................................................
Associate
Date/s of Hearing 19 December 2001
Date of Decision 11 January 2002
Counsel for the Applicant Mr A O'Brien
Solicitor for the Applicant Mr Michael McHugh
Counsel for the Respondent Mr S Gibb SC
Solicitor for the Respondent Mr Denis Stokes
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