Mutual Acceptance Co Ltd v Federal Commissioner of Taxation
69 CLR 389(Judgment by: Starke J)
Mutual Acceptance Co Ltd
v Federal Commissioner of Taxation
Judges:
Latham CJ
Rich J
Starke JDixon J
Williams J
Subject References:
Taxation and revenue
Pay-roll tax
Collection of instalments due under hire-purchase agreements
Vehicle provided and allowance paid by employer
Liability to tax
Legislative References:
Pay-roll Tax Assessment Act 1941 No 2 - s 3
Judgment date: 4 December 1944
Sydney
Judgment by:
Starke J
Case stated pursuant to s. 18 of the Judiciary Act 1903-1940.
The Pay-roll Tax Act 1941 imposes a tax upon all wages paid or payable by any employer. And, unless the contrary intention appears, the Pay-roll Tax Assessment Act 1941-1942 provides that " `wages' means any wages, salary, commission, bonuses or allowances paid or payable ... to any employee as such." Despite the generality of the definition of the word "wages," pay-roll tax is a tax upon wages, that is, upon payments made in cash or in kind for services rendered, whether those payments be by way of pay, commission, bonus or allowances. And it is not, nor is it meant to be, a tax upon anything else. The facts, which I shall not repeat, are stated in the case. But it appears that the taxpayer paid to his travellers, in addition to their weekly wages and commission, car allowances when the travellers provided and used their own motor cars, varying with the size of the territory which the travellers had to cover and the size of the motor cars used by them. Roughly the car allowances represented two-thirds of the expenditure incurred by the travellers in using the cars.
The question is whether those car allowances are wages within the meaning of the Pay-roll Tax Assessment Act 1941-1942.
That depends, I think, upon whether the car allowances were made to the travellers as part of the remuneration for their services as travellers or whether the allowances were made to the travellers, not for their services as such, but for the use or hire of the cars by the taxpayer. The answer is an inference of fact, though depending in this case upon admitted facts: Cf. Usher's Wiltshire Brewery Ltd v Bruce [F10] , at p. 466.
In my opinion the car allowances were wages within the meaning of the Act above mentioned. The actual expenditure incurred in using the cars did not fall upon the taxpayer but allowances were made to the travellers who used their own cars. The taxpayer had neither the possession, the control nor the direction of the cars, when, where or how they were to be used. The cars were used by the travellers at their own discretion and in performance of their services as travellers for the taxpayer.
The jurisdiction of this Court to hear an appeal from the Board of Review depends upon s. 40 (5) of the Pay-roll Tax Assessment Act, but that jurisdiction is established in this case because the decision of the Board involved an interpretation of the Act: See Ruhamah Property Co Ltd v Federal Commissioner of Taxation [F11] , at p. 151.
Accordingly the question stated should be answered in the affirmative.