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Federal Court of Australia |
Last Updated: 19 December 2008
FEDERAL COURT OF AUSTRALIA
M W McIntosh Pty Ltd v Commissioner of Taxation [2008] FCA 1949
TAXATION – extent of the
Commissioner’s power under s 388-55(1) of Schedule 1 to the Taxation
Administration Act 1953 to defer the time within which approved forms are
required to be given to the Commissioner – application, if any, of the
Commissioner’s
power under s 388-55(1) to an application for an
extension, nunc pro tunc, of the period described in s 703-50(3) of the
Income Tax Assessment Act 1997 within which a head company may give an approved
form to the Commissioner specifying a day on and after which a consolidatable
group
is taken to be consolidated
Held:
application dismissed
Taxation Administration Act 1953 (Cth)
s 3AA(1)-(3) and Schedule 1 ss 45-140(1)-(2), 255-10(1),
255-10(3), 388-50, 388-52 and 388-55
Income Tax Assessment Act 1997
(Cth) ss 703-1, 703-50, 719-4, 719-5(6), 719-40, 719-50, 950-100,
950-105 and 995-1(1)
Income Tax Assessment Act 1936 (Cth)
s 161(1)
Patents Act 1952 (Cth) ss 141(1) and
160(2)
Acts Interpretation Act 1901 (Cth) s 15AB
Corporations Law ss 459G(1) and 1322(4)(d)
Corporations
Act 2001 (Cth) ss 9,70, 459F and 459G
Australian Paper Manufacturers Limited v
C.I.L. Inc [1981] HCA 64; (1981) 148 CLR 551
Project Blue Sky Inc v Australian
Broadcasting Authority [1998] HCA 29; (1998) 194 CLR 355
Texel Pty Ltd v
Commonwealth Bank of Australia (1994) 2 VR 298
David Grant & Co
Pty Limited (Receiver Appointed) v Westpac Banking Corporation (1995) 184
CLR 265
Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation
[2008] HCA 9; (2008) 232 CLR 314
M W MCINTOSH PTY LTD
(ACN 000 014 915) and INDIOC PTY LTD (ACN 003 934 692) v THE COMMISSIONER OF
TAXATION OF THE COMMONWEALTH OF
AUSTRALIA
NSD 190 of
2008
GRAHAM J
19 DECEMBER
2008
SYDNEY
THE COURT ORDERS THAT:
1. The Further Amended Application filed in Court on 4 December 2008 be dismissed.
2. There be no order as to costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
The text of entered orders can be located using eSearch on the
Court’s website.
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BETWEEN:
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M W MCINTOSH PTY LTD (ACN 000 014 915)
First Applicant INDIOC PTY LTD (ACN 003 934 692) Second Applicant |
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AND:
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THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF
AUSTRALIA
Respondent |
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JUDGE:
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GRAHAM J
|
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DATE:
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19 DECEMBER 2008
|
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PLACE:
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SYDNEY
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REASONS FOR JUDGMENT
The central issue
1 The central issue in the matter presently before the Court concerns the application, if any, of s 388-55 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (‘the Administration Act’) to the variation of the period for the making of a choice, conferred by s 703-50 of the Income Tax Assessment Act 1997 (Cth) (‘the 1997 Act’), to consolidate a consolidatable group.
Section 388-55 of Schedule 1 to the Taxation Administration Act
2 By virtue of s 3AA(1) of the Administration Act ‘Schedule 1 has effect’.
3 Section 388-55 was inserted into the Administration Act by A New Tax System (Tax Administration) Act (No. 2) 2000 (Cth) (Act No. 91 of 2000). It provided as follows:
Note: Section 255-10 allows the Commissioner to defer the time for payment of an amount of a tax-related liability.’‘388-55(1) The Commissioner may defer the time within which an approved form is required to be given to the Commissioner or to another entity.
(2) A deferral under subsection (1) does not defer the time for payment of any amount to the Commissioner.
4 Section 388-55 follows s 388-52 which was inserted into the Administration Act by the Taxation Laws Amendment Act (No. 3) 2001 (Cth) (Act No. 73 of 2001). Section 388-52 also used the expression ‘an approved form is required to be given to the Commissioner or to another entity’. It provided as follows:
‘388-52 Where an approved form is required to be given to the Commissioner or to another entity by, or on, a day (the lodgement day) that is not a business day, the approved form may be given on the first business day after the lodgement day.’
5 The concept of approved forms, including returns, notices, statements, applications or other documents under a taxation law, being ‘given’ to the Commissioner is used extensively throughout the taxation laws. For example s 161(1) of the Income Tax Assessment Act 1936 (Cth) (‘the 1936 Act’) provides for persons who are required by the Commissioner to do so to ‘give to the Commissioner’ a return for a year of income within a specified period. In relation to returns, notices, statements, applications or other documents that are required to be ‘given’ to the Commissioner, s 388-50(1)(d) allows the Commissioner to specify the manner in which they are to be given.
Notwithstanding the extensive use of ‘give’ or ‘given’ throughout the taxation laws, one finds in Explanatory Memoranda referable to the relevant Bills that ‘lodge’, ‘lodged’ or ‘lodgment’ have been used.
6 By virtue of s 3AA(2) of the Administration Act expressions used in Schedule 1 to the Administration Act have the same meanings as they have in the 1997 Act. The definitions in the 1997 Act are to be found in s 995-1, which spans some 180 pages.
7 Apart from the definitions contained in s 995-1 there are expressions that are defined elsewhere in the 1997 Act, which supplement those definitions.
8 By s 995-1(1) of the 1997 Act ‘this Act’ is defined to include:
(i) this Act [the 1997 Act] or the Income Tax Assessment Act 1936; or (ii) Schedule 1 to the Taxation Administration Act 1953; and‘(a) the Income Tax Assessment Act 1936; and
(b) Part IVC of the Taxation Administration Act 1953, so far as that Part relates to:
(c) Schedule 1 to the Taxation Administration Act 1953;
except in Division 950 (Rules for interpreting this Act).’
9 Whilst ‘this Act’ did not include the 1936 Act or Schedule 1 to the Administration Act where used in Division 950 (Rules for interpreting this Act), s 3AA(3) of the Administration Act provided:
‘3AA(3) Division 950 of the Income Tax Assessment Act 1997 (which contains rules for interpreting that Act) applies to Schedule 1 to this Act as if the provisions in that Schedule were provisions of that Act.’
Sections 950-100 and 950-105 of the 1997 Act provided as follows:
‘950-100(1) These all form part of this Act:● the headings of the Chapters, Parts, Divisions and Subdivisions of this Act;
● the headings for groups of sections of this Act (group headings); ● the notes and examples (however described) that follow provisions of this Act. ...● Guides;
● the headings of the sections and subsections of this Act;
● footnotes and endnotes; ● Tables of Subdivisions; ● Tables of sections.’950-105 These do not form part of this Act:
10 In the foregoing context ‘approved form’ and ‘business day’ as used in s 388-52 and s 388-55 of Schedule 1 to the Administration Act were defined by s 995-1(1) of the 1997 Act as follows:
(i) any State; or (ii) the Australian Capital Territory; or (ii) the Northern Territory‘995-1(1) In this Act [an expression having the expanded meaning referred to above], except so far as the contrary intention appears ...
approved form has the meaning given by section 388-50 in Schedule 1 to the Taxation Administration Act 1953.
...
business day means a day other than:
(a) a Saturday or a Sunday; or
(b) a day which is a public holiday for the whole of
...’
11 Section 388-50 of Schedule 1 to the Administration Act relevantly provided:
(a) it is in the form approved in writing by the Commissioner for that kind of return, notice, statement, application or other document; and (b) it contains a declaration signed by a person or persons as the form requires (see section 388-75); and (c) it contains the information that the form requires, and any further information, statement or document as the Commissioner requires, whether in the form or otherwise; and (d) for a return, notice, statement, application or document that is required to be given to the Commissioner – it is given in the manner that the Commissioner requires (which may include electronically) ...’‘388-50(1) A return, notice, statement, application or other document under a taxation law is in the approved form if, and only if:
The ‘approved form’ in this case included ‘Mailing details for lodging this notification’.
12 Section 388-55 is to be found in Division 388, which is entitled ‘Requirements about giving material to the Commissioner’, and which itself forms part of ‘Part 5-25 - RECORD-KEEPING AND OTHER OBLIGATIONS OF TAXPAYERS’.
13 Sections 388-52 and 388-55 taken together are directed at providing relief from the consequences of fixed time limits.
14 Having regard to the use of the expression ‘the time within which an approved form is required to be given’ in s 388-55, I have difficulty in seeing how the Commissioner may lawfully ‘defer’ a time, unless the time was one within which an approved form was ‘required to be given’ to the Commissioner or to another entity. In my opinion the words ‘required to be given’ in ss 388-52 and 388-55 are directed at the fulfilment of an obligation, non-compliance with which will put the giver at risk under a provision such as s 284-75(3) of Schedule 1 to the Administration Act.
15 However, this view needs to be tested by reference to what was said about ss 141(1) and 160(2) of the Patents Act 1952 (Cth) (‘the Patents Act’) in Australian Paper Manufacturers Limited v C.I.L. Inc [1981] HCA 64; (1981) 148 CLR 551 (the ‘Paper Manufacturers case’).
16 It seems to me that ‘defer’ where used in s 388-5 means ‘extend’. Whilst senior counsel for the applicants generally agreed with this meaning he suggested that the power to ‘defer’ was in the nature of a power to allow a further period. In my opinion it is not helpful to go beyond the words of the statute and address, as he put it, the ‘concept’.
17 In the Revised Explanatory Memorandum circulated by authority of the Treasurer in respect of the Bill which became Act No. 91 of 2000 the following appeared in respect of the provision which became s 388-55(1):
‘Additional time for notifying the Commissioner of BAS [Business Activity Statement] amounts 1.166 The Commissioner will have a discretion to allow taxpayers further time for lodging any approved form. This deferral power is the same as the discretion to defer the time for lodgment of an income tax return, an FBT return or a GST return. The general deferral discretion will allow for an extension of the time for notifying the Commissioner of BAS amounts. Currently the discretion only exists for a GST return. [Schedule 2, items 132 and 143, subsection 388-55(1)] 1.167 It is important to note that a deferral of the due date for lodgment does not defer the due date for the payment of tax-related liabilities notified in the approved form. The deferral of payment requires the Commissioner to exercise a separate discretionary power under section 255-10 in Schedule 1 to the TAA 1953. This will allow the Commissioner, if necessary, to defer the due date for lodgment but maintain the due date for payment. For example, a PAYG large withholder is required by section 16-150 in Schedule 1 to notify the Commissioner of amounts it withholds by the due date in the table in subsection 16-75(1). The Commissioner may defer the date of notification, but the payments are still required to be made the date in the table (sic) unless the large withholder has been granted a deferral of payment under section 255-10. [Schedule 2, item 143, subsection 388-55(2)] 1.168 Conversely, the Commissioner may defer the due date for payment but require an approved form to be given by the statutory due date. For example, the Commissioner may defer the due date for payment of a PAYG instalment by annual payers, but still require notification of the election (under subsection 45-140(2) in Schedule 1 to the TAA 1953) to become an annual payer to be made by the original due date for payment.’18 Under s 45-140(1) of Schedule 1 to the Administration Act certain companies were given the choice to pay instalments annually instead of quarterly. The manner of making the relevant choice was set out in s 45-140(2) as follows:
‘45-140(2) You must make the choice by notifying the Commissioner, in the approved form, on or before the day on which that instalment would otherwise be due.’
19 The applicants submit that ‘is required to be given’ in s 388-55(1) should be construed to mean ‘is required to be or may be given’. They rely upon the first sentence of 1.166 of the Explanatory Memorandum to contend that s 388-55 should be construed as conferring a power on the Commissioner to defer or extend any time for giving or lodging any approved form, including one which, if it is to be effective under s 703-50 must be given to the Commissioner no later than the end of one or other of the days mentioned in s 703-50(3)(b) of the 1997 Act. I am disinclined to accept the applicants’ submission.
20 One cannot read the first sentence of 1.166 out of context. The heading to paragraphs 1.166-1.168 and the two sentences that follow the sentence relied upon by the applicants, make it clear that the purpose of s 388-55 was to allow relief to be granted in respect of a failure to meet a requirement in respect of the giving of an approved form to the Commissioner. The references to ‘defer the time for lodgment of an income tax return, an FBT return or a GST return’, ‘general deferral discretion will allow for an extension of time for notifying the Commissioner of BAS amounts’, ‘will allow the Commissioner ... to defer the due date for lodgment but maintain the due date for payment’ and ‘the Commissioner may defer the due date for payment but require an approved form to be given by the statutory due date’ all suggest to me that the word ‘required’ where used in s 388-55(1) should be construed in the sense which I have indicated above.
21 The Revised Explanatory Memorandum circulated by the authority of the Treasurer in respect of the Taxation Laws Amendment Bill (No. 3) 2001, which became Act No. 73 of 2001 relevantly provided in respect of the introduction of s 388-52:
‘Due date for lodgment of an approved form or payment of a tax debt falling on a Saturday, Sunday or a public holiday 7.36 The law is also being amended to address due dates for the lodgment of an approved form or payment of a tax debt that fall on a day that is a Saturday, a Sunday or a public holiday. Where these due dates occur, taxpayers will be permitted to lodge the form and make associated payments on the first day following which is not a Saturday, a Sunday, or a public holiday. The new rule will apply to the due dates for all obligations to lodge approved forms and pay tax debts under the tax law. A tax debt does not include GIC that is already accruing on an existing debt. ...’22 Needless to say, one cannot treat an Explanatory Memorandum in respect of a later Bill as extrinsic material to which reference may be made in discerning the meaning of an earlier statutory provision. However, it may be observed that s 388-52 employs the same phrase as appears in s 388-55 namely ‘an approved form is required [emphasis added] to be given to the Commissioner or to another entity’. It is clear from the heading to the relevant part in the Revised Explanatory Memorandum and the reference to ‘to address due dates for the lodgment of an approved form’, ‘Where these due dates occur’ and ‘The new rule will apply to the due dates for all obligations to lodge approved forms’ that the word ‘required’ is again used in respect of the fulfilment of obligations arising under the taxation legislation.
23 Section 15AB of the Acts Interpretation Act 1901 (Cth) permits regard to be had to extrinsic material in the interpretation of an Act. It relevantly provides:
(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or (b) to determine the meaning of the provision when: (i) the provision is ambiguous or obscure; or (ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.‘15AB(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a) all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer; ... (e) any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before, or furnished to the members of, either House of the Parliament by a Minister before the time when the provision was enacted; (f) the speech made to a House of the Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the provision be read a second time in that House; ...(2) Without limiting the generality of subsection (1), the material that may be considered in accordance with that subsection in the interpretation of a provision of an Act includes:
(a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and (b) the need to avoid prolonging legal or other proceedings without compensating advantage.’(3) In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be had, in addition to any other relevant matters, to:
Section 703-50 of the Income Tax Assessment Act 1997
24 At this stage, it is appropriate to turn to Part 3-90 of the 1997 Act entitled ‘Consolidated groups’ and, in particular, to Division 703 and s 703-50.
25 Section 700-1 addresses ‘What this Part is about’ and relevantly provided:
‘This Part allows certain groups of entities to be treated as single entities for income tax purposes. Following a choice [emphasis added] to consolidate, subsidiary members are treated as part of the head company of the group rather than as separate income tax identities. The head company inherits their income tax history when they become subsidiary members of the group. ...’26 Section 703-1 addressed ‘What this Division is about’. It provided as follows:
‘A consolidated group and a consolidatable group each consists of a head company and all the companies, trusts and partnerships that: (a) are resident in Australia; andA consolidatable group becomes consolidated at a time chosen [emphasis added] by the company that was the head company at the time.’(b) are wholly-owned subsidiaries of the head company (either directly or through other companies, trusts and partnerships).
27 Section 703-50, which lies at the heart of this case, relevantly provided:
...‘703-50(1) A company may make a choice in the approved form given to the Commissioner within the period described in subsection (3) that a consolidatable group is taken to be consolidated on and after a day that is specified in the choice and is after 30 June 2002, if the company was the head company of the group on the day specified.
(2) The choice cannot be revoked, and the specification of the day cannot be amended, after the choice is made under subsection (1).
(3) The period for giving the choice to the Commissioner:
(i) the day on which the company gives the Commissioner its income tax return for the income year during which the day specified in the choice occurs; or (ii) the last day in the period within which the company would be required to give the Commissioner such a return if it were required to give the Commissioner such a return.(a) starts at the start of the day specified in the choice; and
(b) ends at the end of:
(a) being made by the company at a time when it is not a head company; or (b) having effect in relation to a time before the consolidated group ceased to exist, even if that time is before the choice is made....
(4) The choice does not have effect after the consolidated group that came into existence because of the choice ceases to exist. To avoid doubt, this subsection does not prevent the choice from:
Note: Subsection (6) does not let the Commissioner make the choice effective if it did not have effect because it was not made in accordance with subsection (1). This could have happened if: (a) the choice was not in the approved form (for example because it did not include information the Commissioner required (whether in the form or otherwise)); or (b) the choice was not given to the Commissioner within the period described in subsection (3); or (c) the company was not the head company of a consolidatable group on the day specified in the choice....
(5) The choice does not have effect (and is taken not to have had effect) if the Commissioner is satisfied that the choice contains information that is incorrect in a material particular.
...
(6) Subsection (5) does not prevent the choice from having effect (and being taken to have had effect) if the Commissioner gives the company written notice that the choice has effect despite the incorrect information.
...
(7) The choice does not have effect (and is taken not to have had effect) if, on the day specified, the company was a member of a MEC group.’
28 ‘MEC group’ was defined in s 995-1(1) of the 1997 Act to have ‘the meaning given by section 719-5’.
29 It is probably unnecessary to set out in detail the provisions of s 719-5 of the 1997 Act and sufficient to simply refer to s 719-4 which addressed ‘What this Subdivision is about’ in relation to MEC (Multiple Entry Consolidated) groups. Section 719-4 relevantly provided:
‘A MEC group and a potential MEC group each consist of certain Australian-resident entities that are wholly-owned subsidiaries of a foreign top company. A company that is a first-tier subsidiary of the top company is a tier-1 company. A MEC group cannot be formed unless there are at least 2 tier-1 companies of the top company that are eligible to be members of the group. A MEC group becomes consolidated at a time chosen by the eligible tier-1 companies. One of the eligible tier-1 companies becomes the head company of the group. The remaining members of the group are the subsidiary members.’30 Just as s 703-50 conferred a choice on the head company of a group to be taken to be consolidated, s 719-50(1) conferred a choice on eligible tier-1 companies being wholly-owned subsidiaries of a foreign top company to make a choice that the potential MEC group be consolidated on and after a specified day. Section 719-50(3) was expressed in similar terms to s 703-50(3). However it was more prescriptive and employed language which was different from that chosen for use in s 703-50(3).
31 It may be observed that both s 703-50 and s 719-50 were inserted into the 1997 Act by the same Act, namely the New Business Tax System (Consolidation) Act (No. 1) 2002 (Cth) (Act No. 68 of 2002).
32 Section 719-50(3) relevantly provided:
‘719-50(3) If, as a result of a choice: (a) subsection 719-75(1), (2) or (3) would apply to the MEC group concerned in relation to the income year of a company in which the specified day occurred; and (b) in a case where subsection 719-75(1) or (2) applies--the company will be the head company of the group as at the end of the income year; and (c) in a case where subsection 719-75(3) applies--the company will be the head company of the group immediately before the group ceased to exist; notice of the choice must be given to the Commissioner: (d) if the company is required to give the Commissioner an income tax return for the income year in which the specified day occurred--during the period: (i) beginning on the specified day; and (ii) ending on the day on which the company gives that return; or (e) if the company is not required to give the Commissioner an income tax return for the income year in which the specified day occurred--during the period: (i) beginning on the specified day; and (ii) ending at the end of the period within which the company would have been required to give an income tax return for that income year, if the company had been required to give an income tax return for that income year. ...’33 Further provisions within Schedule 1 to the Administration Act which should be noted were s 719-5(6) and 719-40(2). Each of these defined the ‘applicable period’ for the giving of written notices to the Commissioner in the relevant ‘approved form’ in the circumstances to which they applied. The applicable period for the purposes of s 719-5(4) was defined in s 719-5(6) as follows:
‘719-5(6) ...(d) if the company is required to give the Commissioner an income tax return for the income year in which the time mentioned in paragraph (4)(b) occurred--the period:the applicable period is:
(i) beginning at that time; and (ii) ending on the day on which the company gives that return; or (e) if the company is not required to give the Commissioner an income tax return for the income year in which the time mentioned in paragraph (4)(b) occurred--the period: (i) beginning at that time; and (ii) ending at the end of the period within which the company would have been required to give an income tax return for that income year, if the company had been required to give an income tax return for that income year.’
34 The applicable period for the purposes of s 719-40(1)(e) was defined in s 719-40(2) as follows:
(a) if the company mentioned in paragraph (1)(b) is required to give the Commissioner an income tax return for the income year in which the time mentioned in paragraph (1)(c) occurred--the period: (i) beginning at that time; and (ii) ending on the day on which the company gives that return; or‘719-40(2) For the purposes of paragraph (1)(e), the applicable period is:
(b) if the company mentioned in paragraph (1)(b) is not required to give the Commissioner an income tax return for the income year in which the time mentioned in paragraph (1)(c) occurred--the period: (i) beginning at that time; and (ii) ending at the end of the period within which the company would have been required to give an income tax return for that income year, if the company had been required to give an income tax return for that income year.’
35 The Explanatory Memorandum circulated by authority of the Treasurer in respect of the New Business Tax System (Consolidation) Bill (No. 1) 2002 which became Act No. 68 of 2002 included the following in respect of the consolidation of consolidatable groups:
‘How does a head company choose to consolidate a consolidatable group?Events affecting a consolidated group3.91 A choice to consolidate a consolidatable group must be in the approved form and must specify a day (after 30 June 2002) from which the group will be consolidated. The company that makes the choice must have been the head company of the consolidatable group on the day specified in the choice. However, the company that makes the choice need not be the head company of the group when it gives the Commissioner the choice (unless the choice is given to the Commissioner on the day specified in the choice). [Schedule 1, item 2, subsections 703-50(1) and (4)]
3.92 The choice may be given to the Commissioner on any day within the period beginning on the day specified in the choice and ending on the day that the group’s first consolidated income tax return is lodged. However, if there is no requirement to lodge this income tax return, the choice can be given to the Commissioner on any day within the period, beginning on the day specified in the choice and ending on the last day within the period that lodgement of such an income tax return would have been required had there been a requirement to lodge this return. [Schedule 1, item 2, subsection 703-50(3)]
3.93 Once given to the Commissioner, the choice is irrevocable and remains effective until the consolidated group ceases to exist. [Schedule 1, item 2, subsections 703-50(2) and (4)]
3.94 Further, the day specified in the notice of choice, from which the group will be consolidated, cannot be amended. [Schedule 1, item 2, subsection 703-50(2)]
3.95 A choice has no effect if the Commissioner is satisfied that the notice of choice contains information that is incorrect in a material particular. The Commissioner may nevertheless give effect to an incorrect choice of this type by giving the head company written notice that the choice is effective. [Schedule 1, item 2, subsections 703-50(5) and (6)]
3.96 A choice to consolidate under the ordinary membership rules for consolidated groups, the subject of this chapter, will have no effect where it is given by a company that is a member of a MEC group on the date specified in the choice (on or after which the group would otherwise have been treated as consolidated). [Schedule 1, item 2, subsection 703-50(7)]
Membership changes generally do not affect the existence of a consolidated group
3.97 Consistent with the principle that the choice of a head company to consolidate is irrevocable, a change in the membership of a consolidated group will generally not affect the existence of that consolidated group. The consolidated group will continue to exist so long as the same head company exists as a head company, unless the head company becomes a member of a MEC group. [Schedule 1, item 2, subsection 703-5(2)]
Notice of events affecting a consolidated group
3.98 The head company must give notice to the Commissioner in the approved form within 28 days of an entity becoming a member of a consolidated group, or within 28 days of the exit of a subsidiary member from a consolidated group. [Schedule 1, item 2, subsection 703-60(1), items 1 and 2 in the table]
3.99 If a consolidated group ceases to exist, the company that was the head company of the group must notify the Commissioner within 28 days of that event in the approved form. [Schedule 1, item 2, subsection 703-60(1), item 3 in the table]
...
3.102 Section 388-55 of the TAA 1953 allows the Commissioner to defer the time within which an approved form is required to be given to the Commissioner.’
36 The same Explanatory Memorandum included material in relation to the formation and membership of an MEC group. It relevantly provided as follows:
‘Formation and membership of a MEC groupDetailed explanation of new law Formation and membership of a MEC group4.5 A MEC group is formed by 2 or more eligible tier-1 companies making an irrevocable choice to consolidate a potential MEC group derived from those eligible tier-1 companies. ...
4.6 A MEC group can also be formed as a result of an ordinary consolidated group converting to a MEC group. ...
...
How does a MEC group come into existence?
4.14 A MEC group can be formed in one of 2 ways – firstly as a result of a choice being made to form the group and secondly as a result of a consolidated group converting to a MEC group. [Schedule 1, item 2, subsection 719-5(1); Schedule 5, item 13, subsection 995-1(1) of the ITAA 1997]
Choosing to form a MEC group
4.15 A MEC group is formed as a result of a choice by 2 or more eligible tier-1 companies of a top company jointly notifying the Commissioner of their choice to consolidate the potential MEC group derived from those eligible tier-1 companies. The eligible tier-1 companies must specify a day in the notice as the day from which the group will begin to exist, which may be any day after 30 June 2002....
Consolidated group becoming a MEC group
4.17 A MEC group is also formed when a consolidated group converts to a MEC group. The conversion of a consolidated group to a MEC group is referred to as a special conversion event. [Schedule 1, item 2, subsection 719-40(1); Schedule 5, item 28, subsection 995-1(1) of the ITAA 1997]...
Notification to be given to the Commissioner
4.20 The notification to the Commissioner by the head company of the consolidated group that the MEC group is to form must be in writing and in an approved form and must be given to the Commissioner within the period:
• beginning at the time the other companies became eligible tier-1 companies of the top company; and
• ending on the day on which the head company of the consolidated group lodges its income tax return for the income year in which the companies became eligible tier-1 companies of the top company.
[Schedule 1, item 2, paragraphs 719-40(1)(e) and 719-40(2)(a)]
4.21 However, if the head company of the consolidated group does not have to give an income tax return for that income year, the period during which the choice can be given will end at the end of the period within which the company would have been required to give an income tax return had it been required to give an income tax return for that period.[Schedule 1, item 2, paragraph 719-40(2)(b)]
When does a MEC group cease to exist?4.22 If the head company does not notify the Commissioner within the specified period that the MEC group is to form, the company will continue to be the head company of the consolidated group and the MEC group will be taken not to have formed. The Commissioner may defer the time within which the notification is to be given under section 388-55 of the TAA 1953....
...
No provisional head company of the group...
4.85 Where a company ceases to be the provisional head company of a MEC group, a replacement provisional head company must be appointed by the remaining eligible tier-1 companies in the group. Notification of the replacement provisional head company must be given to the Commissioner within 28 days of the cessation. The Commissioner has a discretion under section 388-55 of the TAA 1953 to defer the time for lodgment of the notification....
Choosing to form a MEC group
Who can make a choice to form a MEC group
4.108 A MEC group can only be formed when there are at least 2 eligible tier-1 companies of the same top company. ...
4.109 To form a MEC group, 2 or more eligible tier-1 companies of a top company must jointly notify the Commissioner of their choice to consolidate the potential MEC group derived from those eligible tier-1 companies. The notification to the Commissioner must be in writing and in the approved form.
4.110 The notice must state the date the group is to form, which must be after 30 June 2002. Once the choice to form a MEC group takes effect, which will be from the day specified in the notice, it cannot be revoked and the specification of the commencement day cannot be altered.
[Schedule 1, item 2, subsections 719 50(1) and (2) and subsection 719-55(1)]
...
Time period for giving the choice to the Commissioner
4.113 The notice informing the Commissioner of the choice to form a MEC group must be given to the Commissioner at any time during the period:
• beginning on the day the group commences; and
• ending on the day on which the first head company of the group lodges its income tax return for the income year in which the group came into existence.
[Schedule 1, item 2, paragraphs 719-50(3)(a) to (d)]
4.114 However, if the head company of the group does not have to give an income tax return for that income year, the period during which the choice can be given will end at the end of the period within which the company would have been required to give an income tax return had it been required to give an income tax return for that period. [Schedule 1, item 2, paragraphs 719-50(3)(a) to (c) and (e)]
...’
Principles of statutory construction
37 In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29; (1998) 194 CLR 355 (‘Project Blue Sky’) McHugh, Gummow, Kirby and Hayne JJ said at [78]:
‘[78] ... the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. ...’ (footnotes omitted)38 In relation to the reconciliation of conflicting statutory provisions their Honours said at [69]-[71]:
‘[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed. [70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme. [71] Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".’ (footnotes omitted)The Paper Manufacturers case
39 As mentioned above, the construction which I favour for ‘required to be given’ where used in s 388-55 of Schedule 1 to the Administration Act needs to be tested by reference to what was said in the Paper Manufacturers case. In that case, Stephen J posed the question for determination by the Court, at 554, as follows:
‘In this appeal the question is whether the power of the Commissioner of Patents to extend times for doing acts or taking steps, conferred by s. 160 (2) of the Patents Act 1952 (Cth), may be exercised in relation to the period of twelve months which is referred to in s. 141 (1) of the Act.’40 Section 141 of the Patents Act 1952 (Cth) provided as follows:
‘141(1) Where an application for protection in respect of an invention (in this Part referred to as "the basic application") has been made in a Convention country and a person, being a person referred to in section 34, who – (a) is the applicant in the Convention country; (b) is the assignee of the applicant in the Convention country; (c) is the legal representative of the applicant in the Convention country or of his assignee; or (d) has the consent of the applicant in the Convention country or of a person who is his assignee or legal representative, makes an application, or 2 or more of such persons make a joint application, for a standard patent or a petty patent within 12 months after the date on which the basic application was made, the priority date of a claim of the complete specification or of the claim of the petty patent specification, as the case may be, being a claim fairly based on matter disclosed in the basic application, is the date of making of the basic application. (2) Where 2 or more applications have been made for protection in respect of the invention in one or more Convention countries, the period of 12 months referred to in sub-section (1) shall be reckoned from the date on which the earlier or earliest of those applications was made.’ (emphasis added)41 In the Paper Manufacturers case Stephen J said at 555:
‘Compliance with the twelve month time-limit in s. 141 (1) is no pre-requisite to a successful Convention application for an Australian patent; such an application may be made at any time after the making of the basic application in the overseas Convention country. But the important advantage of a back-dated Australian priority date will be denied to an applicant who fails to observe the time-limit of twelve months.’ (emphasis added)42 His Honour proceeded to address the question of whether or not the making of an application ‘within 12 months after the date on which the basic application was made’ was an act or step in relation to the application ‘required to be done or taken’ within a certain time within the meaning of s 160(2) of the Patents Act 1952 (Cth). Section 160 relevantly provided as follows:
‘160.(1) Where, by reason of an error or omission on the part of an officer or person employed in the Patent Office, an act or step in relation to an application for a patent or in proceedings under this Act (not being proceedings in a court) required to be done or taken within a certain time has not been so done or taken, the Commissioner shall extend the time for doing the act or taking the step. (2) Where, by reason of – (a) an error or omission on the part of the person concerned or of his agent or attorney; or (b) circumstances beyond the control of the person concerned, an act or step in relation to an application for a patent or in proceedings under this Act (not being proceedings in a court) required to be done or taken within a certain time has not been so done or taken, the Commissioner may, upon application by the person concerned, but subject to this section, extend the time for doing the act or taking the step. (3) The time for the doing of an act or the taking of a step may be extended under sub-section (1) or (2) although that time has expired. ...’43 Because the 12 month time limit in s 141(1) did not operate to debar later applications but only deprived them of an earlier priority date, it was said that s 141(1) involved no ‘requirement’ as to time such as the Commissioner could relieve against under s 160(2).
44 Brennan J, as his Honour then was, with whom Murphy J agreed, was of the opinion that s 141(1) involved no ‘requirement’ as to time such as the Commissioner could relieve against. At 559-560 Brennan J said:
‘One of the conditions prescribed for making a Convention application under s. 141 (1) is that the application be made "within 12 months after the date on which the basic application was made". The question is whether the time specified by s. 141 (1) can be extended by the Commissioner in exercise of the powers reposed in him by s. 160 (2). The answer to that question turns on whether the making of a Convention application – for that is the act in reference to which the time limit is specified – is "an act or step in relation to an application for a patent ... required to be done or taken within a certain time". I would give a negative answer to that question.’His Honour then continued at 560-561 by saying
‘Section 160 (2) relates to a requirement that an act be done or a step be taken, where the requirement is to be fulfilled within a certain time. Before s. 160 (2) applies, there must be an act which is required to be done or a step which is required to be taken and a time specified within which the act is to be done or the step is to be taken. If the sub-section applies, the power conferred by it is to extend the time for doing the required act or taking the required step. An act is required to be done if the omission to do the act attracts a liability or results in the loss or forfeiture of some right or privilege. If the omission to do the act attracts no liability but merely loses an opportunity of gaining a right or privilege, I find it difficult to predicate of the act that it is "required to be done": the doing of the act in such a case is an exercise by the actor of his entitlement to seek the right or privilege, not a fulfilment of a requirement. A requirement to do an act connotes a person who is required to do it. A person who will incur a liability or who will lose or forfeit a right or privilege if he omits to do the act is the person required to do the act. But where the statute entitles any of a number of persons to do an a act (in this case, to make an application under s. 141) and thereby gain a right or privilege (in this case, to secure a priority date which is earlier than the date of making the application) none of those persons can be said to be required to do the act. Their respective rights, privileges and liabilities are unaffected by an omission to do the act within the time specified, though an opportunity to gain a right or privilege is lost by the omission. ... I do not construe the sub-section as referring to a requirement in respect of time for doing an act or taking a step which is not itself required to be done or taken. As s. 141 does not require an application to be made, either within a certain time or at all, I do not find in s. 160 (2) a power to extend the time for the making of a Convention application.’45 However, Brennan and Murphy JJ were in the minority.
46 Stephen J with whose reasons for judgment Mason J, as his Honour then was, and Wilson J agreed said at 557:
‘... so long as the provision is either permissive of the doing of an act or else confers a benefit or right as a result of doing it, being in either case linked with a period within which it is to be done, "required" can aptly be used.’47 At 556 his Honour posed the relevant question as:
‘...is the act or step of making formal application one which is, by s. 141 (1), "required to be done or taken" within twelve months? ...’to which his Honour’s answer was ‘Yes’.
48 Stephen J continued at 556-557:
‘... It is a condition precedent to the benefit which the sub-section confers that the application must be made within the time-limit which it imposes. This is a requirement of the sub-section and may accurately be described as being "required" by it. Whenever the doing of some act is linked with a period within which it is to be done it can with perfect accuracy be described as being required to be done within that period; the particular consequence attaching to a failure to do the act within the specified period is irrelevant to the aptness and propriety of the use of the word "required" to link and explain the connexion between the act and the time-limit. Legislation may provide that an act may only be done, if at all, within some prescribed period, the doing of it later being either prohibited or being declared to be ineffective and a nullity; or again, where the provision in question confers a benefit, the doing of the act within the period may be a condition of obtaining the benefit. But in either case the word "required" will aptly describe the nature of the link between the doing of the act and the time for the doing of it. ...’The extension of periods under corporations legislation
49 In a different statutory context Hayne J, then of the Supreme Court of Victoria, held that the Court’s power, contained in s 1322(4)(d) of the Corporations Law, to extend a period for doing any act, matter or thing could not be utilised in relation to the time allowed for an application to be made for an order setting aside a statutory demand served on a company in accordance with s 459G(1) of the Corporations Law. In Texel Pty Ltd v Commonwealth Bank of Australia (1994) 2 VR 298 (‘Texel’) at 300 Hayne J said:
‘In my view the language of the provisions of the Corporations Law shows a clear legislative intention that the special provisions made by s.459G(2) and (3) are not to be extended by resort to s.1322. Otherwise the limitations imposed in such clear and emphatic language by s.459G(2) and (3) would be rendered nugatory.’(see also per Gummow J in David Grant & Co Pty Limited (Receiver Appointed) v Westpac Banking Corporation (1995) 184 CLR 265 (‘David Grant’) at 277-278)
50 Hayne J expressed the view that the Paper Manufacturers case did not assist in the resolution of the matter before him. At 300 he said:
‘The provisions of the Patents Act ... are markedly different from the provisions with which I am concerned, if only because they do not contain any language suggesting an intention to prescribe an exhaustive code. ...’51 Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Limited [2008] HCA 9; (2008) 232 CLR 314 (‘Aussie Vic’) raised similar issues to those considered by Hayne J in Texel and the Court in David Grant. In Aussie Vic the period for compliance with a statutory demand had been extended on the hearing of an application under s 459G of the Corporations Act 2001 (Cth) (‘the Corporations Act’) to set aside a statutory demand served upon the appellant to 4 July 2006. However the appellant failed to comply with the demand within the extended period for compliance specified in the Court’s order. Thereafter the appellant applied for a further order extending the time for compliance with the statutory demand under s 459F(2)(a)(i) of the Corporations Act.
52 Gleeson CJ, Hayne, Crennan and Kiefel JJ held that the period for compliance with the statutory demand could not be extended after the period for compliance had expired notwithstanding the terms of s 70 of the Corporations Act and the definition of ‘extend’ in s 9 of the Corporations Act. Section 70 provided:
‘70 Where this Act confers power to extend the period for doing an act, an application for the exercise of the power may be made, and the power may be exercised, even if the period, or the period as last extended, as the case requires, has ended.’
Section 9 relevantly provided:
‘9 Unless the contrary intention appears
...extend, in relation to a period:
(a) includes further extend; and
(b) has a meaning affected by section 70.
...’
53 Gleeson CJ, Hayne, Crennan and Kiefel JJ held at [12] that there were several features of Part 5.4 of the Corporations Act which led to the conclusion that a contrary intention did appear. Accordingly, their Honours held that the period for compliance with the statutory demand could not be further extended.
Issues for consideration
54 It seems to me that there are two distinct issues to be considered at the outset. Firstly, is there anything in the Administration Act, or s 388-55 of Schedule 1 in particular, which allows the Paper Manufacturers case to be distinguished? Did the use of ‘required’ in ‘Where ... an act or step in relation to an application for a patent or in proceedings under this Act [the Patents Act] ... required to be done or taken within a certain time has not been so done or taken ...’ in s 160(2) of the Patents Act, have a wider meaning or field of operation than ‘required’ as used in ‘may defer the time within which an approved form is required to be given to the Commissioner ...’ in s 388-55(1)?
55 Secondly, can it be said that, whilst ‘required’ can aptly be used where a provision is either permissive of the doing of an act or else confers a benefit or right as a result of doing it, being in either case linked with a period within which it is to be done (see [46] above), nevertheless s 703-50 is not such a provision? Is s 703-50 so expressed that it evinces an intention that the ‘period for giving the choice’ is fixed and not to be expanded by the exercise of a general power such as that contained in s 388-55(1) of Schedule 1 to the Administration Act to ‘defer’ the time within which the approved form may be given to the Commissioner under s 703-50, as was the case in relation to expanding the time for compliance with statutory demands for which the Corporations Law/Corporations Act provided (see Texcel, David Grant and Aussie Vic).
56 Later, it will be necessary to consider whether the power, if any, under s 388-55(1) may be invoked nunc pro tunc after the relevant period has ended, or may it only be exercised before the period has ended. Then, assuming the necessary power, there will be administrative law considerations to address in respect of the exercise of the power in the manner in which it was exercised.
The first issue
57 In relation to the first issue, I am unable to find anything in the Administration Act or s 388-55 of Schedule 1 in particular, which would allow the leading judgment of the majority in the Paper Manufacturers case to be distinguished. Unconstrained by authority, I would have preferred the reasoning of Brennan J. However, having concluded that ‘defer’ where used in s 388-55 simply means ‘extend’, I cannot see how ‘required to be given’ as used in s 388-55 could be limited to those cases where an obligation to ‘give’ has gone unfulfilled and the giver has been put at risk.
The second issue and the facts in this case
58 Turning to the second issue, I do not consider s 703-50 to be a provision akin to s 141(1) of the Patents Act where there was a link with a period of 12 months following the making of a basic application for protection in respect of an invention in a Convention country, within which an application for a patent was to be made.
59 Under s 703-50(1) a head company could not specify a day on and after which a consolidatable group was taken to be consolidated unless the day:
(a) post-dated 30 June 2002, and
(b) was a past date or the actual date of the giving of the choice to the Commissioner.
60 Under s 703-50(3) a further limitation applied, since a day could not be specified if it fell within an income year for which the head company had, on an earlier day, given its income tax return to the Commissioner.
61 The choice conferred by s 703-50(1) was not simply linked to a calendar period within which it was to be exercised. One could perhaps describe the choice as being a ‘pre-lodgment option’.
62 In the present case, no approved form specifying a day on and after which a consolidatable group, comprising the applicants, was taken to be consolidated was ever given by the first applicant, as the relevant head company, to the Commissioner. However, the first applicant now wishes to give the Commissioner an approved form specifying that the consolidatable group is taken to be consolidated on and after 1 July 2003. Whilst 1 July 2003 would satisfy (a) and (b) above, it would not satisfy s 703-50(3), since 1 July 2003 fell within the income year ended 30 June 2004 and the first applicant gave the Commissioner its income tax return for that income year on or about 24 October 2005. Once 24 October 2005 had passed it was no longer open to the first applicant to specify 1 July 2003 as a day on and after which a consolidatable group comprising the applicants was taken to be consolidated.
63 However, on 30 March 2006 the first applicant applied to the Commissioner for an extension of the period described in s 703-50(3) on the assumption that the Commissioner’s power under s 388-55(1) of Schedule 1 to the Administration Act permitted the Commissioner to grant the necessary extension.
64 In my opinion, there a number of reasons why the pre-lodgment option should lapse upon the giving by a head company of its income tax return for the income year during which the specified day occurred, to the Commissioner. These include:
(a) if it were otherwise, the clear and emphatic language of s 703-50(3) would be rendered nugatory;
(b) the Note to s 703-50(6) makes it clear that the Commissioner’s discretion, to give notice that a choice has and is taken to have had effect despite the inclusion in the approved form of information that was incorrect in a material particular, did not extend to cases where the making of the choice was not in accordance with s 703-50(1), e.g. where there was a failure to give the choice within the period described in s 703-50(3);
(c) the proscription of any opportunity to revoke or amend the specified day ‘after the choice is made under subsection (1)’, indicates that a strict approach to the definition of the period described in s 703-50(3) was intended;
(d) the closure of the period described in s 703-50(3), primarily by reference to a self-executing event, brought about at the initiative of the relevant head company. By giving the Commissioner its income tax return for the income year during which the relevant specified day occurs, a head company drops its own guillotine upon ‘giving the choice to the Commissioner’;
(e) the wording chosen by the legislature for ‘describing’ the relevant period in s 703-50 is quite different from that chosen to define the periods mentioned in ss 719-5(6)(d) and (e), 719-40(2)(a) and (b) and 719-50(3)(d) and (e);
(f) whilst the Explanatory Memorandum for the Bill which became Act No. 68 of 2002 made mention of the Commissioner’s power or discretion under s 388-55 of Schedule 1 to the Administration Act, to defer the time within which an approved form was required to be given to the Commissioner under other statutory provisions (see paragraphs 3.102, 4.22, 4.85 and 4.102), no mention was made of s 388-55 having any application to the period described in s 703-50(3) within which a choice in the approved form might be given to the Commissioner.
(g) no note was included at the foot of s 703-50(3) of the 1997 Act such as that which appeared at the foot of s 161(1) of the 1936 Act, namely:
‘Note: The Commissioner may defer the time for giving the return: see section 388-55 in Schedule 1 to the Taxation Administration Act 1953’
65 In commenting on the pre-lodgment option as I have, I have concentrated my attention on s 703-50(3)(b)(i), rather than (ii). However (ii) does not, in my opinion, relevantly change the position. Taking (i) and (ii) together, it is clear that the legislature’s description of an ‘end’ to the relevant period was by reference to the end of the day on which the first of (i) and (ii) was to occur i.e.
(a) the end of the day on which the head company gave the Commissioner its income tax return for the income year during which the day specified in the choice occurred, or
(b) the end of the day on which the period for the giving of such a return expired, were the giving of a return required.
66 I appreciate that paragraph 3.92 of the Explanatory Memorandum for the New Business Tax System (Consolidation) Bill (No. 1) 2002, which became Act No. 68 of 2002, predicated the operation of (ii) upon ‘if there is no requirement to lodge this income tax return’. However, I do not consider that these words in the Explanatory Memorandum can be used to alter the wording of the Act itself so as to make (ii) read:
‘(ii) if there is no requirement to lodge this income tax return, the last day in the period within which the company would be required to give the Commissioner such a return if it were required to give the Commissioner such a return.’
As previously observed, ‘lodged’ is not a word which the legislature has used in the relevant section.
67 It follows from what I have said above, that the general power to defer the time within which an approved form is required to be given to the Commissioner, contained in s 388-55(1) of Schedule 1 to the Administration Act, has no application to the period described in s 703-50(3) of the 1997 Act. The legislature did not intend that the clearly defined ‘period for giving the choice to the Commissioner’ could be extended by the exercise of such a general power.
68 One good reason for not allowing such a period to be extended, as now proposed by the applicants, is that, once an income tax return has been given to the Commissioner, it may reasonably be expected that public resources would be brought to bear in considering the return as given, the taxable income of the taxpayer for the income year and the tax payable thereon. There is a public interest in not allowing such productive effort to be wasted.
Does s 388-55(1) allow nunc pro tunc applications for deferment of the time within which approved forms are to be given to the Commissioner?
69 In light of the conclusion which I have reached in respect of the second issue, it is not strictly necessary to consider the other matters referred to at [56] above. Having said that, if, contrary to my conclusion, s 388-55(1) of Schedule 1 to the Administration Act could be invoked to extend the period described in s 703-50(3) of the 1997 Act, it would, in my opinion, be open to the Commissioner to extend the period nunc pro tunc, notwithstanding that the relevant period had ended at the end of the day on which the first applicant gave the Commissioner its income tax return for the income year ending 30 June 2004, on or about 24 October 2005, if it had not already ended earlier than that in accordance with s 703-50(3)(ii).
70 Firstly, there is nothing in s 388-55(1) which expressly precludes the Commissioner from deferring a relevant time unless an application to have the time deferred or extended be made to the Commissioner before the time expired.
71 Secondly, s 388-55(2) makes it clear that the deferral power under s 388-55(1), to ‘defer the time within which an approved form is required to be given to the Commissioner’ has no application to ‘the time for payment of any amount to the Commissioner’. Subsection (2) is followed by a note which provides a cross-reference to s 255-10 of Schedule 1 to the Administration Act. That section allows the Commissioner to defer the time for payment of an amount of a tax-related liability and it includes a note directing attention to the power of the Commissioner under s 388-55 to defer the time for giving an approved form. Clearly, s 255-10 and s 388-55(2) were intended to complement one another.
72 Section 255-10 relevantly provided:
‘255-10(1) The Commissioner may, having regard to the circumstances of your particular case, defer the time at which an amount of a tax-related liability is, or would become, due and payable by you (whether or not the liability has already arisen). If the Commissioner does so, that time is varied accordingly....
(2) The Commissioner must do so by written notice given to you.
(3) A deferral under subsection (1) does not defer the time for giving an approved form to the Commissioner.
Note: Section 388-55 allows the Commissioner to defer the time for giving an approved form.’
73 The reference in s 255-10(1) to the Commissioner’s power to ‘defer the time at which an amount of a tax-related liability is, or would become, due and payable by you (whether or not the liability has already arisen)’ [emphasis added] indicates that a nunc pro tunc extension of the time for payment of a tax-related liability could be granted.
Whilst there are no words in s 388-55(1) to mirror ‘is or would become’ and ‘(whether or not the liability has already arisen)’ in s 255-10(1), the apparent complementary nature of the two provisions leads me to the conclusion that the power to grant a nunc pro tunc extension of time was not intended to be confined to the due time for payment of a tax-related liability alone. Rather, it was to apply to the time within which approved forms were required to be given to the Commissioner, as well.
Conclusion
74 In my opinion, the applicants are not entitled to the declaratory relief sought in paragraph 1A of the Further Amended Application, which was filed in Court on 4 December 2008. That paragraph in the applicants’ claim was as follows:
‘1A A declaration that the Respondent is empowered under section 388-55(1) of the TA Act [a reference to the Administration Act] to defer the time within which a notification of choice to consolidate as at 1 July 2003 pursuant to subsections 703(1) and (3) of the ITAA Act 1997 [a reference to the 1997 Act] is required to be given to the Respondent by the First Applicant.’
75 The balance of the Further Amended Application sought review of a decision of Gary Scanlan, Assistant Commissioner, Policy and New Measures, Debt, as the delegate of the respondent, not to grant a deferral under s 388-55 of Schedule 1 to the Administration Act in respect of the time within which the first applicant could lodge a notification of choice to consolidate for the 2004 financial year. That decision was communicated to the first applicant by a letter dated 21 January 2008 from the Australian Taxation Office to the applicants’ tax agents.
76 The grounds relied upon by the applicants were:
(a) Errors of
law;
(b) Omitted relevant considerations;
(c) Irrelevant
considerations;
(d) Applied policy without regard to
merits;
(e) Extraneous purpose, or other abuse of power;
(f) Manifest
unreasonableness.
77 Given the conclusions which I have reached on the question of power, I do not propose embark upon a consideration of the administrative law aspects of the matter.
78 For the reasons given above I consider that the Further Amended Application should be dismissed.
79 I have been informed by the parties that the respondent has agreed to pay
the costs of both parties on the basis that this is
a ‘test case’.
In these circumstances there should be no order as to costs.
Associate:
Dated: 19
December 2008
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Robert Richards & Associates
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Counsel for the Respondent:
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M A Perry QC and A J O'Brien
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