COMMISSIONER OF STATE REVENUE (VIC) v ACN 005 057 349 PTY LTD

Judges: Kiefel J
Bell J

Gageler J
Keane J
Gordon J

Court:
Full High Court

MEDIA NEUTRAL CITATION: [2017] HCA 6

Judgment date: 8 February 2017

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Gageler J

For the reasons given by Bell and Gordon JJ, and for the additional reasons given by Kiefel and Keane JJ, I would allow each appeal with costs and make the consequential orders proposed by Bell and Gordon JJ. I add my own response to the argument of the taxpayer on the central issue of the relationship between ss 19 and 90AA of the Land Tax Act.

93. Section 90AA was explained by the Victorian Treasurer at the time of its introduction in 1993 to be one of a number of similarly worded provisions in State taxation legislation designed to provide certainty and finality to Victoria ' s revenue collections by providing that, except in the case of a claim for a refund based on an argument that a statutory provision is invalid, proceedings for a refund cannot be brought unless an application for the refund has first been made to the Commissioner within three years of the payment in question ^[110] Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 21 October 1993 at 1254. . Axiomatically, a construction that would give effect to that legislative design is to be preferred to a construction that would not ^[111] Section 35(a) of the Interpretation of Legislation Act 1984 (Vic). .

94. Section 90AA(1) is expressed to prohibit " [ p ] roceedings for the refund or recovery of tax paid under, or purportedly paid under " , the Land Tax Act. Section 92A spells out that the prohibition prevents the Supreme Court of Victoria entertaining proceedings of the kind to which s 90AA(1) refers.

95. By defining " proceedings " to include seeking the grant of any relief or remedy in the nature of certiorari, prohibition, mandamus or quo warranto , or the grant of a declaration of right or an injunction, as well as to include seeking any order under the Administrative Law Act 1978 (Vic), s 90AA(8) makes clear that proceedings prohibited by s 90AA(1) are not confined to proceedings in which the refund or recovery of tax paid is part of the relief claimed. The prohibition extends to encompass any proceeding seeking judicial review of any administrative action or inaction on the part of the Commissioner where the object of the proceeding is to obtain a refund or recovery of tax paid under, or purportedly paid under, the Land Tax Act.

96. The comprehensiveness of the prohibition imposed by s 90AA(1) on proceedings whose object is the refund or recovery of tax paid under, or purportedly paid under, the Land Tax Act is given emphasis by the exceptions from it, which are limited to those for which the remainder of s 90AA goes on to provide. Section 90AA(3) creates the principal exception, for proceedings commenced within three months after refusal by the Commissioner to allow under s 90AA(6) a refund claimed under s 90AA(2) within three years after payment. Section 90AA(5) creates the only other exception: for proceedings based on a claim of invalidity of a provision of the Land Tax Act, which by force of s 20A of the Limitation of Actions Act 1958 (Vic) must be commenced within one year of the date of payment.

97. Section 19, empowering the Commissioner to " amend an assessment by making such alterations or additions to it as he thinks necessary to ensure its completeness and accuracy " , forms part of the administrative machinery of the Land Tax Act which the prohibition in s 90AA(1) overlays. A proceeding which seeks judicial review of action or inaction on the part of the Commissioner under s 19 is a proceeding which falls within the scope of the prohibition in s 90AA(1) if the object of the proceeding is the refund or recovery of tax paid under, or purportedly paid under, the Land Tax Act.

98. The gist of the taxpayer ' s argument is that a proceeding which seeks mandamus to compel the Commissioner to amend an assessment under s 19 as a step in recovering an amount paid in response to an inaccurate original assessment is not within the scope of the prohibition in s 90AA(1) for the reason that the object of the proceeding cannot be characterised as the refund or recovery of " tax " paid under, or purportedly paid under, the Land Tax Act. The amount paid in response to the inaccurate original assessment cannot be characterised as " tax " within the context of such a proceeding, it is said, because correction of the assessment pursuant to the order of mandamus will operate to establish " ab initio " that the amount assessed and paid was not the amount that was required to be assessed and paid under that Act.

99. The taxpayer borrows the expression " ab initio " from the reasons for judgment of Isaacs J in Trustees, Executors and Agency Co Ltd v Commissioner of Land Tax ^[112] (1915) 20 CLR 21 ; [ 1915 ] HCA 35 . . Explaining the effect of amendment of an assessment under a provision of the Land Tax Assessment Act 1910 (Cth), expressed in terms materially identical to s 19 of the Land Tax Act, Isaacs J stated that " [ t ] here is at any given moment but one assessment by the Commissioner, and that is conclusive … as to amount, except on appeals " ^[113] (1915) 20 CLR 21 at 41. . " It is subject to correction by the Commissioner " , his Honour continued, " and when altered or added to … it operates ab initio as to the amount of the debt payable " with the result that " [ t ] he assessment when amended is conclusive that the amount it shows at a given moment was the true amount as at the taxable date " ^[114] (1915) 20 CLR 21 at 41. .

100. The taxpayer ' s argument seeks in that way to equate the effect for the purposes of s 90AA(1) of an assessment that is amended under s 19 of the Land Tax Act with the effect for the purposes of s 20A of the Limitation of Actions Act , as it then stood, of the amendment to the Stamps Act 1958 (Vic) considered in Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd ^[115] (1994) 182 CLR 51 ; [ 1994 ] HCA 61 . . The amendment operated retrospectively to abrogate liability to pay stamp duty. Amounts paid as stamp duty during the period of that retrospective operation were held in consequence of the amendment not to answer the description of amounts " paid under the authority or purported authority of any Act " ^[116] (1994) 182 CLR 51 at 80. .

101. The flaw in the argument is that it overstates the legal effect of the exercise of the power conferred by s 19, and in so doing understates the comprehensiveness of the prohibition imposed by s 90AA.

102. Amendment of an assessment under s 19 has no greater effect than the Land Tax Act gives to the assessment as amended. Nothing in the reasoning of Isaacs J in Trustees suggests to the contrary.

103. An assessment as amended operates by force of s 20(1)(b) as conclusive evidence that the amount and all particulars of the amended assessment are correct. To the extent that the amount or particulars of the amended assessment differ from the amount or particulars of the original assessment, the assessment as amended is conclusive evidence that the amount or particulars of the original assessment were incorrect.

104. Amendment of an assessment does not, however, operate to change the historical fact of the original assessment having been issued. Most importantly, amendment of the assessment does not operate to alter the historical legal consequences of the original assessment having been issued. The analogy to the retrospective amendment considered in Royal Insurance is for that reason incomplete.

105. The reference in s 90AA(1) to " tax paid under, or purportedly paid under " , the Land Tax Act is to payment as an historical event. Within the meaning of s 90AA(1), tax paid under the Land Tax Act is tax that was paid in discharge of the liability imposed on a taxpayer through the operation of ss 38, 39 and 57 of the Land Tax Act operating on an original assessment. The tax historically so paid remains tax paid under the Land Tax Act even after amendment of the assessment.

106. Where an amendment decreases the amount of tax from that originally assessed, such entitlement as the taxpayer might have to get back an amount previously overpaid is limited to such entitlement as is conferred by s 90AA(2), (3) and (6) operating in light of the assessment as amended. Tax paid in discharge of the liability imposed on the taxpayer through the operation of ss 38, 39 and 57 on the original assessment was and remains tax paid under the Land Tax Act within the meaning of s 90AA(2) in the same way as it remains tax paid under the Land Tax Act within the meaning of s 90AA(1). An amount of tax so paid that is shown by an amended assessment to have been overpaid is claimable under s 90AA(2) within three years after payment. Where claimable and claimed under s 90AA(2), the amount is refundable under s 90AA(6), in default of which the amount is recoverable as permitted by s 90AA(3). Not otherwise.

107. The proceeding for mandamus which the taxpayer commenced in the Supreme Court of Victoria was for the refund or recovery of tax paid under, or purportedly paid under, the Land Tax Act within the meaning of s 90AA(1). The Supreme Court of Victoria was prevented by that provision from entertaining the proceeding.