Fairfax v Federal Commissioner of Taxation
(1965) 114 CLR 139 ALJR 308
(Judgment by: Windeyer JJ.)
FAIRFAX
v FEDERAL COMMISSIONER OF TAXATION
Judges:
Barwick C.J.
Kitto
Taylor
Menzies
Windeyer JJ.
Judgment date: 2 December 1965
Judgment by:
Windeyer JJ.
This case is dealt with fully in the judgments that have been delivered which I had the advantage of reading. Therefore, as I am in substantial agreement with the reasons given for upholding the validity of the enactment in question, I need not myself deal with the matter at any length. The Commonwealth Parliament may use its power to make laws with respect to taxation in order to promote some purpose that it desires to promote. The law is not thereby rendered invalid. The question is only: is it properly described as a law with respect to taxation? The cases to which the Solicitor-General referred us contain emphatic assertions of that principle. A law with respect to taxation may do no more than exempt from a tax that would otherwise be exigible persons or transactions that answer certain descriptions or fulfil certain conditions. In considering the enactment here in question it is not to be seen as it were in outer darkness, but in the light that is shed upon it by the scheme into which it comes. It is a familiar incident of laws with respect to taxation, especially of income tax and estate duty, that they provide for a great variety of exemptions, concessions, rebates and deductions, some of them absolute some conditional, the products of policies or purposes that the Parliament wishes to advance.
I do not mean to say that a case could not be imagined in which an Act in the guise of a law with respect to taxation might be seen to be in its true character something else. But here the very matter that is relied upon as remote from the character of taxation seems to lead to quite the opposite conclusion. Taxes are ordinarily levied to replenish the Treasury, that is to provide the Crown with revenue to meet the expenses of government. That is the prime purpose of the income tax. It seems to me far from foreign to such a tax that its incidence should be so adjusted as to encourage persons to subscribe to government loans.
I would answer the question in the stated case, Yes.