Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon. Frank Crean, M.P.)
The provisions of this Bill are designed to amend the appeals provisions of the Income Tax Assessment Act (the "Principal Act").
Under the Principal Act, a taxpayer is given certain rights of objection and appeal where he is dissatisfied with an assessment made under the Act. Where a taxpayer objects to an assessment and the Commissioner disallows that objection, the taxpayer has the right to have the decision referred to a Board of Review or to treat his objection as an appeal to either the High Court or the Supreme Court of a State.
The provisions also give a taxpayer or the Commissioner the right to appeal to the High Court from any decision of a Board of Review involving a question of law.
Broadly, the amendments proposed by this Bill will provide that income tax appeals now falling within the single justice jurisdiction of the High Court will come within the jurisdiction of the State Supreme Courts. Thus, a taxpayer dissatisfied with the Commissioner's decision on an objection will have the choice of taking the matter either to a Board of Review or to a Supreme Court of a State.
If the matter is referred to a Board of Review, a taxpayer or the Commissioner, if dissatisfied with a decision of the Board involving a question of law, will have the right of appeal to a single judge of a Supreme Court. There will also be a further right of appeal, subject to leave being granted by the High Court, to the Full High Court from a decision of a judge of the Supreme Court.
If a taxpayer decides to appeal to a Court instead of having the matter referred to a Board, the appeal will be to a single judge of a State Supreme Court. That Court may state a case in writing for the opinion of the High Court on any question of law. The Commissioner or a taxpayer may appeal to the Full High Court in its appellate jurisdiction from any order of the Supreme Court.
Notes on Clauses
This clause provides for the short title and citation of the amending Act and of the Principal Act as amended.
Section 5(1A) of the Acts Interpretation Act 1901-1966 provides that every Act shall come into operation on the twenty- eighth day after the day on which the Act receives the Royal Assent, unless the contrary intention appears in the Act. By this clause it is proposed that the amending Act shall come into operation on the day it receives the Royal Assent.
This clause proposes an amendment to section 187 of the Principal Act which gives a taxpayer, if dissatisfied with the Commissioner's decision on an objection, the right to request the Commissioner to refer the decision to a Board of Review for review or to treat the objection as an appeal and to forward it either to the High Court or to the Supreme Court of a State.
The amendment proposed by Clause 3 will delete the reference in section 187 to the High Court leaving taxpayers with a choice between a Board of Review and the Supreme Court of a State if they wish to challenge a decision of the Commissioner. However, further rights of appeal will be given by the proposed new section 196 which will be inserted by clause 4.
Section 196 of the Principal Act gives a taxpayer or the Commissioner the right to appeal to the High Court from any decision of a Board of Review which involves a question of law. The section also provides that a Board of Review shall refer to the High Court any question of law arising before it if requested to do so by the Commissioner or the taxpayer. The decision of the High Court on such an appeal or reference is final.
Clause 4 proposes the repeal of the present section 196 and the substitution of a new section 196 with the effect of transferring appeals under the section from the jurisdiction of a single justice of the High Court to a single judge of a specified State Supreme Court. The proposed new section also provides for appeals to the Full High Court by leave of the High Court from decisions of a judge of a Supreme Court.
Clause 5 proposes the insertion of a new section - section 196A - in the Principal Act. This section will provide statutory authority for the adoption in Supreme Courts in income tax proceedings of the High Court Rules under the Judiciary Act 1903-1969, so far as is practicable. The section also specifies those proceedings in a Supreme Court in which these rules and procedures will apply.
Section 197 of the Principal Act provides that where, at the request of a taxpayer, the Commissioner has treated his objection as an appeal and forwarded it to the High Court or a State Supreme Court the appeal shall be heard by a single justice or judge of the Court.
This clause proposes the deletion from this section of the reference to the High Court and is consequential on the deletion of the reference to the High Court from section 187 as proposed by clause 3.
Clause 7 proposes the inclusion of a new sub-section - sub- section (2) - in section 266 of the Principal Act. Section 266 gives the Governor-General power to make regulations under the Principal Act.
The proposed new sub-section, which complements the new section 196A proposed by clause 5, gives authority for the making of regulations in relation to the practice and procedure of the Supreme Courts of the States in respect of proceedings to which section 196A applies. The regulations will include regulations relating to the costs of the proceedings and the assessment and taxation of these costs, and to court fees to be charged.
This clause proposes a number of application and transitional provisions arising from the amendments made by clauses 3 to 7 of the amending Act to transfer income tax references and appeals from the High Court to the Supreme Court of a State. These provisions will not become part of the Principal Act but will affect the application of the amendments to the Principal Act proposed by clauses 3 to 7 of the amending Act.
Sub-clause 8(1) provides that, notwithstanding the amendments proposed by clauses 3 to 7, the right of appeal to the High Court contained in the present law is preserved -
- where the Commissioner's decision on an objection was served on the taxpayer before the commencement of the amending Act;
- where the appeal is against a decision of a Board of Review given before commencement of the amending Act; or
- where an appeal or a reference of a question of law to the High Court was made before that date.
However, these transitional arrangements are subject to sub- clause 8(2) which enables the High Court to remit to the Supreme Court of a State an appeal or reference referred to in sub- clause 8(1). The High Court may exercise this power of its own motion or on the application of one of the parties and it may be done at any stage of the proceeding.
Sub-clause 8(3) deals with the procedures to be followed where the High Court remits a matter to a State Supreme Court. It ensures that where matters are remitted to a State Supreme Court the same appeal provisions apply as when matters come direct to State Supreme Courts under the proposed amendments to the Principal Act by clauses 3 to 7.
Sub-clause 8(4) provides for the case where, before commencement of this amending Act, a taxpayer has asked the Commissioner to treat his objection as an appeal and forward it to the High Court. This sub-clause permits a taxpayer to amend such a request so that his objection can be considered by a State Supreme Court instead of by the High Court.