Re Dymond [1959] HCA 22; (1959) 101 CLR 11 (27 April 1959)

HIGH COURT OF AUSTRALIA

RE DYMOND [1959] HCA 22; (1959) 101 CLR 11

Constitutional Law (Cth.)

High Court of Australia
Dixon C.J.(1), McTiernan(2), Fullagar(3), Kitto(4), Taylor(5), Menzies(6) and Windeyer(7) JJ.

CATCHWORDS

Constitutional Law (Cth.) - Sales tax legislation - Validity - Laws imposing taxation - Laws dealing with the imposition of taxation - The Constitution (63 & 64 Vict. c. 12), s. 55 - Sales Tax Assessment Act (No. 1) 1930-1953, s. 46 - Sales Tax Assessment Act (No. 2) 1930-1936, s. 10 (2B).

HEARING

Sydney, 1958, November 18, 19; 1959, April 27. 27:4:1959
CASE STATED pursuant to s. 20 (3) of the Bankruptcy Act 1924-1958.

DECISION

April 27, 1959.
The following written judgments were delivered:-
DIXON C.J. I agree in the reasons for judgment prepared by Fullagar J. and

McTIERNAN J. I concur in the reasons and conclusion of Menzies J. (at p17)

FULLAGAR J. This is a case stated by the Federal Court of Bankruptcy (Clyne J.) under s. 20 (3) of the Bankruptcy Act 1924-1958. The estate of Peter Terence Dymond was sequestrated by an order made on his own petition on 24th May 1957. The only proof of debt lodged was lodged by the Deputy Commissioner of Taxation for the State of New South Wales, who claimed a sum of 17,253 pounds, later reduced to 17,148 pounds, as payable under the Sales Tax Assessment Act (No. 2) 1930-1936 and the Sales Tax Act (No. 2) 1930-1956 of the Commonwealth on sales of goods made by the bankrupt between September 1949 and June 1956. On 25th February 1958 the bankrupt, by motion on notice to the commissioner, sought the annulment of the sequestration order on the ground that he was not indebted to the commissioner. His contention was that all relevant provisions of the Sales Tax Assessment Act (No. 2) are invalid because the Act does not comply with the requirements of s. 55 of the Constitution. The question asked by the case stated is whether this contention is sound. (at p17)

2. Section 55, so far as material, provides that "Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Laws imposing taxation . . . shall deal with one subject of taxation only." (at p18)

3. By reason of the provisions of s. 55 it has been the invariable practice since the establishment of the Commonwealth, when Parliament has proposed to levy a tax on any subject of taxation, to pursue that object by means of two separate Acts, the one of which actually imposes the tax and fixes the rate of tax, and the other of which provides for the incidence, assessment, and collection, of the tax and for a variety of incidental matters. It is common to refer to the latter Act as the Assessment Act, and to the former as the Taxing Act. When Parliament decided in 1930 to levy a tax on sales of goods, this practice was followed, and, since it was proposed to levy the tax on nine different classes of sales, nine pairs of Acts, numbered consecutively, were passed. In each case the tax was imposed by a Taxing Act, which has been amended from time to time. So far as the Assessment Acts are concerned, the necessary general provisions were set out in Act No. 1, and most of these were not repeated but incorporated by reference in each of the other eight Acts. (at p18)

4. The relevant Act in the present case is Act No. 2. The debtor finds a foothold for his argument in s. 46 of the Sales Tax Assessment Act (No. 1) 1930-1953 which, by s. 12 of the Assessment Act (No. 2), is made to "apply mutatis mutandis to the imposition assessment and collection of the tax chargeable under" Act No. 2. Section 46, so far as material, provides: - ". . . any person who - (a) fails or neglects duly to furnish any return or information as and when required by this Act or the Regulations thereunder or by the Commissioner; or (b) fails to include any particulars of goods the sale value of which is subject to tax under this Act in any return, or includes those particulars in a column of the return provided for particulars of goods in respect of which sales tax is not payable, shall, if a taxpayer to whom paragraph (a) of this sub-section applies, be liable to pay additional tax at the rate of ten per centum per annum upon the amount of tax assessable to him . . . or the sum of One pound, whichever is the greater, or, if a taxpayer to whom paragraph (b) of this sub-section applies, shall be liable to pay by way of additional tax the amount of One pound or double the amount of the difference between the tax properly payable and the tax payable upon the basis of the return lodged, whichever is the greater: Provided that the Commissioner may, in any particular case, for reasons which he thinks sufficient, remit the additional tax or any part thereof." There is in Act No. 2 itself another provision which must be mentioned. Section 10 (2A) authorises the commissioner to make what is commonly called a "default assessment" of the tax which in his judgment ought to be paid by any person, and s. 10 (2B) provides: - "Any person who becomes liable to pay sales tax by virtue of an assessment made under the last preceding sub-section shall also be liable to pay, by way of additional tax, double the amount of that sales tax or the amount of One pound whichever is the greater: Provided that the Commissioner may, in any particular case, for reasons which he thinks sufficient, remit the additional tax or any part thereof." (at p19)

5. The argument proceeds in this way. It is said first that the provisions for a minimum payment of 1 pound impose a tax. That tax may become payable by a person who is not otherwise liable to pay any tax at all under the Acts. It follows, it is said, that the Assessment Act is a law imposing taxation within the meaning of s. 55. But all the other provisions of the Assessment Act - or at least all those which are relevant to the liability of the bankrupt - deal with matters other than the imposition of taxation, and s. 55 expressly says that all such provisions are to be of no effect. (at p19)

6. The argument, if sound, may be thought to provide a remarkable example of the tail wagging the dog. It may also, though no doubt the position would be easily remedied, be thought to be of a devastating character, because s. 226 of the Income Tax and Social Services Contribution Assessment Act and s. 47A of the Estate Duty Assessment Act contain precisely similar provisions. So did s. 68A of the Land Tax Assessment Act until that Act was repealed in 1953. (at p19)

7. If the Assessment Act is a law imposing taxation, it is also, in my opinion, a law dealing with matters other than the imposition of taxation. It is, of course, a law dealing with taxation, and it is a law with respect to taxation within the meaning of s. 51 (ii) of the Constitution. But it is a law which deals, in part at least, with matters other than the imposition of taxation. It deals with the collection and recovery of tax, with assessments, objections and appeals, with offences and penalties, and a wide miscellany of other matters which relate to the tax but not to the creation of the liability, which is the "imposition" of the tax. (at p19)

8. That provisions dealing with such matters were not provisions dealing with the imposition of taxation was the view always entertained by Isaacs J. He said, for example, in The Commonwealth v. Melbourne Harbour Trust Commissioners [1922] HCA 31; (1922) 31 CLR 1 "Under the Commonwealth Customs Tariff Act duties of customs are imposed; and by the Customs Acts ancillary provisions are made separately, pursuant to constitutional requirement" (1922) 31 CLR, at p 14 . (The italics are mine.) He explained his view at some length in Federal Commissioner of Taxation v. Munro [1926] HCA 58; (1926) 38 CLR 153, at pp 187-192 . One passage should be quoted. His Honour said: - "We have only . . . to imagine a complete taxation measure combining the Taxing Act and the Assessment Act. If . . . the Bill is 'a proposed law imposing taxation' . . . it is throughout unamendable by the Senate. It may include, as the Income Tax Act would, on this assumption, include, provisions for Boards of Review, their remuneration and duties, provisions enabling this Court to make rules, provisions for criminal consequences, provisions for validating former statutory rules; and yet, because included in a Bill which inter alia does impose taxation, the Senate is entirely precluded from amending a letter of the whole measure. That, in my opinion, is a radical error and cuts away a right which, on the well-understood meaning of parliamentary terms, is conserved to the Senate by the words of the Constitution" (1926) 38 CLR, at p 190 . This passage appears to me to be decisive of the question. It is true that in Munro's Case [1926] HCA 58; (1926) 38 CLR 153 Higgins J. (1926) 38 CLR, at p 209 and Starke J. (1926) 38 CLR, at pp 215, 216 expressed a different view, as did also Latham C.J. (1951) 82 CLR, at p 564 in Moore v. The Commonwealth [1951] HCA 10; (1951) 82 CLR 547 . In the lastmentioned passage, however, no reference is made to what was said by Isaacs J. in Munro's Case [1926] HCA 58; (1926) 38 CLR 153 , and it is the view of Isaacs J. that seems to give their natural meaning to the words of s. 55. (at p20)

9. What has been said does not mean that the expression "imposing taxation" and the expression "dealing with the imposition of taxation" are precisely synonymous. It does not mean that an Act imposing taxation can do no more than say "An income tax is imposed at the following rates", and then specify the rates. It would not be "dealing with" anything other than the imposition of taxation if it prescribed the persons who were to pay the tax and the classes of income in respect of which they were to be taxed. It may very well be that an Act imposing an income tax could, without offending against s. 55, contain all or most of the provisions in fact contained in Pt. III of the Income Tax and Social Services Contribution Assessment Act, which is headed "Liability to Taxation". Such provisions do not impose taxation, but they deal with the imposition of taxation, because the specification of the persons who are to be liable to taxation and the definition of their liability is part of the denotation of the term "imposition of taxation". But provisions for administration and machinery, the appointment and powers and duties of a commissioner of taxation, the making of returns and assessments, the determination of questions of law and fact relating to liability, the collection and recovery of tax, the punishment of offences, stand on a different footing. They "deal with" matters which must be dealt with if the imposition of the tax is to be effective. But they cannot be said to deal with the imposition of taxation, because their subject matter is not comprehended within the meaning of the term "imposition of taxation". The creation of a liability and (for example) the enforcement of the liability by civil or criminal proceedings are different subject matters. "Dealing with the imposition of taxation" is a different thing from "dealing with taxation", and the former expression does not mean or include "dealing with matters incidental to the imposition of taxation". I can see no escape from the view that the Assessment Act does deal with matters other than the imposition of taxation. (at p21)

10. I have spent some time on the question considered above, because it is important, a good deal of argument was devoted to it, and there is no actual decision of the Full Court on the point. The view expressed may not go far enough for the purposes of the argument for the bankrupt, because the effect of s. 55 (assuming it to be applicable) may be to leave standing enough of the Assessment Act to establish his liability to the commissioner. But s. 55 has, in my opinion, no application. It seems to me that the argument for the bankrupt breaks down on the very threshold, for its first proposition cannot be maintained. The provisions of the Assessment Act which create the liability to pay the minimum sum of 1 pound do not impose a tax, and therefore do not make the Assessment Act a "law imposing taxation". They impose not a tax but a penalty. (at p21)

11. It is true that the amount payable under s. 10 (2B) or s. 46, whether it be the sum of 1 pound or a larger sum, is expressed to be payable "by way of additional tax". And in Richardson v. Federal Commissioner of Taxation [1932] HCA 67; (1932) 48 CLR 192 this Court, dealing with the similar provision in s. 67 of the Income Tax Assessment Act 1922-1930, held that (to use the words of Dixon J.) ". . . the procedure of assessment, objection, review and appeal does apply to additional tax under s. 67" (1932) 48 CLR, at pp 204, 205 . But all this is matter of machinery, the appropriateness of which is indicated by the words "by way of additional tax". It does not affect the penal nature of the liability imposed. As Evatt J. said in Richardson's Case [1932] HCA 67; (1932) 48 CLR 192 : "But s. 67 is a penal provision, as is indicated by the heading to Pt. VII, and the amount of liability therein specified is an amount in the nature of a penalty. The liability is not to pay 'additional tax' but to pay an amount 'by way of' additional tax" (1932) 48 CLR, at p 214 . The words "by way of additional tax" mean, I think, no more than that the amount of the penalty (to the extent to which it is not remitted) is to be notified, like the tax itself, by a notice of assessment, so that the quantified penalty and the quantified tax are, subject to the right of objection and appeal, made actually payable by the same machinery. The liability is imposed by the Act not as a consequence of a sale of goods but as a consequence of an attempt to evade payment of a tax on a sale of goods. The exaction is directly punitive, and only indirectly fiscal. It is imposed for the protection of the revenue, but as a sanction and not for the sake of revenue as such. It is not a tax on the sale of goods, and it is not a tax on anything else. No distinction can be drawn between the two provisions on which reliance was placed. Section 46 of the Sales Tax Assessment Act (No. 1), like s. 67 of the Income Tax Assessment Act 1922-1930, occurs in a part of the Act headed "Penal Provisions". It is on its face a provision of a penal character, and the liability imposed by s. 10 (2B) of the Sales Tax Assessment Act (No. 2) is not of a different character. (at p22)

12. In Jolly v. Commissioner of Taxation [1935] HCA 21; (1935) 53 CLR 206, at pp 210, 211 Rich and Dixon JJ. in a joint judgment adumbrated, though only as "worthy of consideration", what is substantially the argument now advanced for the bankrupt. In the course of this passage in the judgment they suggested that, if the Charybdis of s. 55 were avoided by holding that s. 67 of the Income Tax Assessment Act imposed not a tax but a penalty, a Scylla might lie in wait in the shape of an argument that to penalise an offence otherwise than by means of the judicial power was not incidental to the legislative power with respect to taxation. But it appears on examination, I think, that there is no real dilemma. The penalty is not imposed by the commissioner, but directly by the Act itself, subject to objection and appeal. If it were imposed by the commissioner, the position might be entirely different. In Federal Commissioner of Taxation v. Trautwein [1936] HCA 48; (1936) 56 CLR 211 Evatt J. said: "But the commissioner does not, under the section challenged, impose a penalty at all. The statute imposes the additional tax in the nature of a penalty and the amount of that is fixed precisely by the statute. The power of the commissioner is the power to remit, a power which belongs essentially to the executive and not to the judicial power" (1936) 56 CLR, at p 216 . (at p23)

13. The question asked by the case stated should be answered by declaring that no provision of the Sales Tax Assessment Act (No. 2) is made of no effect by s. 55 of the Constitution. (at p23)

KITTO J. I agree in the judgment just delivered by my brother Fullagar, and I have nothing to add. (at p23)

TAYLOR J. In my view neither the provisions of s. 10 (2B) of the Sales Tax Assessment Act (No. 2) 1930-1936 nor the adoption by s. 12 of that Act of the provisions of s. 46 of the Sales Tax Assessment Act (No. 1) 1930-1953 constituted the former Act a law imposing taxation within the meaning of s. 55 of the Constitution. Examination of s. 10 (2B) and s. 46 plainly reveals that the exactions for which they provide are, in essence, pecuniary penalties and not taxation. On this point I agree with the observations of Fullagar J. and have nothing to add. (at p23)

2. This conclusion is fatal to the arguments advanced on behalf of the bankrupt and, strictly speaking, it is unnecessary to go further and consider how far, if at all, the provisions of s. 55 of the Constitution would render nugatory the provisions of the second Act if it should, properly be regarded as a law imposing taxation. But in view of what has already been said I feel bound to express briefly the opinion which I have formed on this aspect of the case. (at p23)

3. In the first place I wish to express my dissent from the dictum of Isaacs J. in Federal Commissioner of Taxation v. Munro [1926] HCA 58; (1926) 38 CLR 153 that it is "unquestionable" that "no sensible distinction can be drawn between a Bill 'imposing taxation' and a Bill 'dealing with the imposition of taxation'" (1926) 38 CLR, at p 186 . To me it seems clear that a law may deal with the imposition of taxation and yet not, itself, directly impose taxation. Indeed this view seems consistently to have been entertained by members of the Court other than Isaacs J. when the question has arisen for consideration. As Fullagar J. has observed in the present case such a law may deal with the imposition of taxation by specifying or prescribing "the persons who were (are) to pay the tax and the classes of income in respect of which they were (are) to be taxed". A law of this character may be said to deal with the incidence of the tax and as such it would, to my mind, be a law dealing with the imposition of taxation. I do not, however, wish to be understood as suggesting that this lastmentioned expression is appropriate only to describe provisions commonly found in legislative chapters which purport to deal with liability to taxation or that it does not comprehend some provisions commonly relegated to other legislative chapters such as "Collection and Recovery of Tax". Indeed in Pt. VI of the Income Tax and Social Services Contribution Assessment Act - "Collection and Recovery of Tax" - there are to be found provisions which in my view are provisions which deal with the imposition of income tax. For instance s.204 provides that any income tax assessed shall be due and payable by the person liable to pay the tax on the date specified in the notice as the day upon which tax is due and payable. Section 205 contains provisions intended to operate in particular cases to accelerate the due date for payment and s. 208 stipulates that income tax when it becomes due and payable shall be a debt due to the King on behalf of the Commonwealth and payable to the commissioner in the manner and at the place prescribed. Such provisions are, it seems to me, provisions which deal with the imposition of taxation and their true character is to be found in a particular examination of their substance and effect and not by reference to the legislative category in which they have been placed. Secondly, it is apparent that a number of Justices of the Court have consistently held that provisions for the assessment collection and recovery of tax are provisions which deal with the imposition of taxation: see Munro's Case [1926] HCA 58; (1926) 38 CLR 153 ; per Higgins J. (1926) 38 CLR, at p 209 , and Starke J. (1926) 38 CLR, at pp 215, 216 ; Resch v. Federal Commissioner of Taxation [1942] HCA 2; (1942) 66 CLR 198, at p 212 ; Cadbury-Fry-Pascall Pty. Ltd. v. Federal Commissioner of Taxation [1944] HCA 31; (1944) 70 CLR 362 , per Latham C.J. (1944) 70 CLR, at p 375 and Starke J. (1944) 70 CLR, at p 384 and Moore v. The Commonwealth [1951] HCA 10; (1951) 82 CLR 547 , per Latham C.J. (1951) 82 CLR, at p 564 and McTiernan J. (1951) 82 CLR, at p 573 . In these cases various forms of expression were used to describe a category of laws which, though they may not impose taxation, yet may be regarded as laws which deal with the imposition of taxation. In Munro's Case (1926) 38 CLR 153 both Higgins and Starke JJ. saw no reason why all of the provisions of the Income Tax Assessment Act as it then stood should not be included in an Act which directly imposed the tax. In Resch's Case [1942] HCA 2; (1942) 66 CLR 198 Starke J. saw no objection to the insertion in a law imposing taxation of any provision which is "fairly relevant or incidental to the imposition of a tax on one subject of taxation" (1942) 66 CLR, at p 213 . This expression was taken from the judgment of Higgins J. in Osborne v. The Commonwealth and George Alexander McKay (Commissioner of Land Tax) [1911] HCA 19; (1911) 12 CLR 321, at p 373 . In Moore's Case [1951] HCA 10; (1951) 82 CLR 547 Latham C.J. expressed the view that "provisions for the assessment, collection and recovery of tax are provisions which deal with the imposition of taxation even though only those which make the grant of the tax are to be regarded as provisions actually imposing taxation" (1951) 82 CLR, at p 564 . On those occasions, as now, the Court had before it particular provisions for its consideration and the decisions remain unaffected by the fact that, perhaps, some of these broadly formulated views may be regarded as too wide. But once a distinction is allowed between a law imposing taxation and a law dealing with the imposition of tax it is apparent that a law prescribing or regulating the incidence of the tax falls within the latter category. Perhaps to say this, is to say no more and no less than was said by Starke J. in Resch's Case (1942) 66 CLR, at p 213 . But in any event the question whether any particular provision may properly be so described can only be resolved by considering the character and effect of the particular provision and not by reference to the legislative category to which it has been assigned. Finally, I should say that I have examined those provisions of the second Act upon which the bankrupt's liability may be said to depend and it seems to me beyond doubt that he can obtain no assistance from s. 55 of the Constitution for even if the Act should be regarded as a law imposing taxation none of the provisions upon which his liability depends would be invalidated by the constitutional provision. (at p25)

MENZIES J. On 24th May 1957 Dymond was upon his own petition made bankrupt. Since then he has sought the annulment of the order sequestrating his estate, alleging that an amount of 17,148 pounds 8s. 11d., for sales tax claimed to be owing to the Commissioner of Taxation and which is the only debt for which proof has been lodged against his estate, is not owing because the provisions of the Sales Tax Assessment Act (No. 2) 1930-1936 upon which liability depends, are of no effect by reason of s. 55 of the Commonwealth Constitution. The judge of the Federal Court of Bankruptcy has, pursuant to s. 20 (3) of the Bankruptcy Act, stated a special case for the opinion of the High Court which raises the question of the validity of these provisions. (at p25)

2. The point taken is that because either s. 10 (2B) of the Sales Tax Assessment Act (No. 2) or s. 46 of the Sales Tax Assessment Act (No. 1) 1930-1953 (which is incorporated in the Sales Tax Assessment Act (No. 2)) imposes taxation and the other provisions of the Sales Tax Assessment Act (No. 2) (including other provisions incorporated from the Sales Tax Assessment Act (No. 1)) do not deal with the imposition of taxation, those other provisions are of no effect. This point must therefore fail if neither s. 10 (2B) nor s. 46 impose taxation or if the other provisions do deal with the imposition of taxation. (at p26)

3. I am content to decide this case on the ground that all the provisions of the Sales Tax Assessment Act (No. 2) that are essential to the debtor's liability for sales tax do deal with the imposition of taxation. (at p26)

4. Since 1926 at least, differences of judicial opinion have been manifest about the extent of the prohibition in the first part of s. 55 which is as follows: "Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect." In Federal Commissioner of Taxation v. Munro [1926] HCA 58; (1926) 38 CLR 153 , Isaacs J. (1926) 38 CLR,at pp 184-192 stated his opinion that there is no distinction between "imposing taxation" and "dealing with the imposition of taxation" and that machinery provisions regulating the assessment, levy, collection and enforcement of taxation do not deal with the imposition of taxation and so cannot be part of an Act which imposes taxation. In the same case Higgins J. (1926) 38 CLR, at p 209 and Starke J. (1926) 38 CLR, at pp 215, 216 took a contrary view, asserting that the words "deal only with the imposition of taxation" allow much freer scope than if the section had read "laws imposing taxation shall only impose taxation". Starke J. after referring to this said: "Consequently, in my opinion, it is not unlawful to include in a taxing Act provisions incidental and auxiliary to the assessment and collection of the tax. This would include provisions for administration, returns, assessments, reviews of assessments and so forth" (1926) 38 CLR, at pp 215, 216 . This opinion Starke J. reiterated in Resch v. Federal Commissioner of Taxation (1942) 66 CLR, at p 212 . In Moore v. The Commonwealth [1951] HCA 10; (1951) 82 CLR 547 Latham C.J. (1951) 82 CLR, at p 563 and McTiernan J. (1951) 82 CLR, at p 573 both decided that "provisions for the assessment collection and recovery of tax are provisions which deal with the imposition of tax" and that such provisions can without contravening s. 55 be part of a law "imposing taxation". The question of the validity of s. 67 of the Income Tax Assessment Act 1922-1934 was referred to in two cases: Jolly v. Federal Commissioner of Taxation [1935] HCA 21; (1935) 53 CLR 206 and Federal Commissioner of Taxation v. Trautwein [1936] HCA 48; (1936) 56 CLR 211 . This section, like s. 10 (2B) and s. 46, imposed liability to pay 1 pound as minimum additional tax in case of default in complying with the provisions of the Income Tax Assessment Act which dealt inter alia with the assessment, collection and enforcement of income tax. In neither case was the validity of the provisions of the Act other than s. 67 called into question (as corresponding provisions are here) but in Jolly's Case [1935] HCA 21; (1935) 53 CLR 206 the question was raised by Rich and Dixon JJ. (1935) 53 CLR, at pp 210, 211 to use the words of the headnote, "whether s. 67 . . . in imposing the additional tax or the minimum sum of 1 pound does not contravene s. 55 of the Constitution as not imposing a tax upon income, which is the subject matter of the Act, or as not dealing with taxation at all" [1935] HCA 21; (1935) 53 CLR 206 . In Trautwein's Case [1936] HCA 48; (1936) 56 CLR 211 Evatt J. rejected the contention that s. 67 "imposes a tax, not upon income but upon a subject of taxation different from income, contrary to s. 55 of the Constitution" (1936) 56 CLR, at p 216 . In both cases it seems to me that the view was taken that the Income Tax Assessment Act, apart from s. 67, is a law dealing with the imposition of income tax. (at p27)

5. This review shows that Isaacs J. is alone in his opinion that a law providing machinery for the assessment, levying, collection and recovery of tax is not a law dealing with the imposition of taxation and that in Moore's Case [1951] HCA 10; (1951) 82 CLR 547 a contrary view was part of the decision of the case. (at p27)

6. I am not as a matter of construction prepared to accept the view of Isaacs J. in Munro's Case [1926] HCA 58; (1926) 38 CLR 153 . (at p27)

7. It was said, however, that the adoption of any other view would restrict the power of the Senate beyond anything that could have been in the contemplation of the framers of the Constitution, in that if machinery provisions of the sort to which I have referred could be made part of a law imposing taxation, then the Senate could not amend such provisions. This consequence may follow but, if so, there are two things to be said about using it as a reason for giving s. 55 an extended operation. The first is that, as appears from Erskine May's Parliamentary Practice (1893) 10th ed, p 542, the parliamentary convention, upon which ss. 53 to 55 of the Constitution were unquestionably based, prevented the Lords from amending Bills which they received from the Commons dealing with aids and supplies, so as to alter, whether by increase or reduction, the amount of a rate or charge - its duration, mode of assessment, levy, collection, appropriation, or management; or the persons who pay, receive, manage, or control it: or the limits within which it is leviable. The second is that a parliamentary convention has developed in Australia of having separate "tax" Acts and "assessment" Acts which goes beyond what is necessary to avoid invalidity under s. 55, but which is directed to securing to the Senate a wider power of amendment than it would have if tax Acts were themselves to contain the machinery for the assessment, collection and enforcement of tax. This parliamentary practice, therefore, while maintaining and facilitating the observance of s. 53, goes further than the Constitution does by s. 55 to safeguard the position of the Senate in respect of the amendment of laws dealing with taxation. The maintenance of this convention is not, however, any part of the function of the Court and the convention itself affords no ground for departing from the strict construction of s. 55 that has always been adopted. (at p28)

8. It is now necessary to examine the provisions of the Sales Tax Assessment Act (No. 2) which it is said are of no effect by reason of the first part of s. 55. The Sales Tax Assessment Act (No. 2), by s. 12, incorporates much of the Sales Tax Assessment Act (No. 1) and with that incorporation the Act (No. 2) deals with (i) the administration of the Act by the Commissioner of Taxation; (ii) the registration of taxpayers and the quotation of certificates; (iii) the liability to taxation; (iv) the making of returns; (v) the collection and recovery of tax; (vi) objections and appeals; (vii) the penal provisions; (viii) taxation prosecutions; and (ix) miscellaneous provisions relating to the construction of the Act, the making of regulations, the prevention of imposition by pretending to have paid tax and so on. In my opinion, these provisions, at least to the extent to which they are essential for the liability of the debtor for sales tax, viz. those dealing with administration, the registration of taxpayers, the quotation of certificates, the liability to taxation, the making of returns and the collection and recovery of tax including additional tax, do deal with the imposition of tax. In confining myself to deciding that laws providing machinery for the administration of laws imposing taxation and for the assessment, levying, payment and recovery of tax and additional tax do deal with the imposition of tax and that the provisions of the Sales Tax Assessment Act (No. 2) upon which the liability of the debtor for sales tax depends are laws of that description - I do not intend to state exhaustively what are laws dealing with the imposition of taxation; moreover, I refrain from expressing any opinion upon the question whether s. 46 or s. 10 (2B) impose taxation and whether there are any provisions of the Sales Tax Assessment Act (No. 2), with the incorporation effected by s. 12, which do not deal with the imposition of tax or upon the other questions that arose in the course of the argument. (at p29)

9. The question submitted to this Court was: "Whether the Sales Tax Assessment Act (No. 2) 1930-1936 or any and if so what sections thereof are of no effect by virtue of the first paragraph of s. 55 of the Constitution?" To this my answer would be that no section upon which the liability of the debtor for sales tax depends is of no effect by virtue of the first paragraph of s. 55 of the Constitution. (at p29)

WINDEYER J. I agree with the judgment of Fullagar J. (at p29)

ORDER

Question reserved by the judge of the Federal Court of Bankruptcy for the opinion of this Court answered by declaring that no provision of the Sales Tax Assessment Act (No. 2) is made of no effect by s. 55 of the Constitution. Order that the costs of the special case be disposed of by the order of the Federal Court of Bankruptcy.