Anderson's Pty Ltd v Victoria
[1964] HCA 77111 CLR 353
(Judgment by: Barwick CJ)
Anderson's Pty Ltd
vVictoria
Judges:
Barwick CJMctiernan J
Kitto J
Taylor J
Menzies J
Windeyr J
Owen J
Legislative References:
Stamps Act 1958 (Victoria) - subdiv (14) of Div 3 of Pt II
Case References:
Bolton v Madsen (1963) - 110 CLR 264
Parton v Milk Board (Vic) - (1949) 80 CLR 229
Dennis Hotels Pty Ltd v Victoria - (1960) 104 CLR 529
Matthews v Chicory Marketing Board (Vic) - (1938) 60 CLR 263
Peterswald v Bartley - (1904) 1 CLR 497
Browns Transport Pty Ltd v Kropp - (1958) 100 CLR 117
Bank of Toronto v Lambe - (1887) 12 App Cas 575
Judgment date: 17 December 1964
Judgment by:
Barwick CJ
These are demurrers, one in each of five actions, and all heard together, which raise the question of the validity of a group of sections in subdiv (14) of Div 3 of Pt II of the Stamps Act 1958 of the State of Victoria. The suggested ground of invalidity is that the duty which these provisions impose is a duty of excise within s 90 of the Commonwealth Constitution; and therefore, because of that section, beyond the competence of the State legislature.
From the earliest times of this Commonwealth it has been plain that the expression "duty of excise" in s 90 of the Constitution is used in a more precise sense than that of an inland duty and that it refers to the essential nature of the tax, not to the manner of its collection. But the judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. This, in substance, is the formulation of my brother Kitto which received the endorsement of a court of six Justices presided over by the former Chief Justice in Bolton v Madsen (1963) 110 CLR 264, at p 273. With great respect, this formulation of the result of what has been decided in this connexion commends itself to me and I am prepared to adopt it as the description of the nature of a duty of excise within the meaning of s 90. I would merely add expressly what I think is implicit in his Honour's expression, namely that the step which puts the goods into consumption is still in the line, albeit at the end of the line, to which his Honour refers.
During the course of decision which has resulted in this definitive expression, questions as to whether or not the tax under discussion fell into Mill's category of indirect taxes, or whether its amount entered into the price of the commodity have received attention and consideration. No doubt, that the tax should be one which cannot, or is not intended by the legislature to be passed on by the person who is required to pay it, may assist to demonstrate that the tax is upon the person required to pay it and not upon a step in the process of manufacture or distribution of goods. Equally, that the tax can be seen as necessarily or directly increasing the cost of the goods as they pass through the relevant step in the process of manufacture or distribution may aid the conclusion that the tax is upon the goods and not upon the person. But in neither case is the circumstance necessarily conclusive: at best these facts are but circumstances and though sometimes of a compelling kind, they are not criteria. In deciding the question as to whether any particular impost is an excise, it seems to be preferable to adhere to the formulation which I have repeated, without substitution of supposed synonymous expressions, and without attempting to solve the problem by resort to any economic theory. The question is a legal question. To conclude that the tax is an excise because it is in substance a tax upon the relevant step in connexion with the goods is to find that it is a burden on manufacture or production and thus to satisfy economic theory, whether or not the supposed economic consequences of an excise can be seen to be involved in the case in question.
But, of course, in arriving at the conclusion that the tax is a tax upon the relevant step, consideration of many factors is necessary, factors which may not be present in every case and which may have different weight or emphasis in different cases. The "indirectness" of the tax, its immediate entry into the cost of the goods, the proximity of the transaction it taxes to the manufacture or production or movement of the goods into consumption, the form and content of the legislation imposing the tax -- all these are included in the relevant considerations. But in the end what must be decided is that the tax is in substance a tax upon the relevant step. That being the central question in a controversy as to the nature of the tax, it will not, in my opinion, necessarily be resolved by the form of the tax or by identifying what according to that form the legislature has made the criterion of its imposition, however important in any particular case those matters may be.
In the instant case the tax -- and none dispute that the duty here is a tax -- is in form a stamp duty: s 131B. Although s 131C provides for "approved vendors" and in their case substitutes for the stamp a periodic return of dutiable instruments and payment of the duty otherwise than by stamping them, the duty remains in form a duty on instruments. S 131E ensures that although the transaction between the participants has not been the subject of a document to which they are parties, none the less a written record of it will be brought into existence.
The instruments which are dutiable are those which effect, evidence or record a transaction by which a consumer who has been given or is promised possession of goods has yet payments to make in respect of them after delivery of them, either as instalments of purchase money or as rental: s 131A. These instruments are divided into three categories, from which significant exceptions are made: they are credit purchase agreements, hirepurchase agreements and rental agreements where the bailee of the goods has the right to continue the bailment at no further, or at only a nominal, rent after some payments of rent have been made. But all these transactions, having regard to the exceptions, have in common the features that possession is given of the goods to which they relate before the price or value of the goods is paid and a capacity in the bailee either to obtain the property in the goods or to retain possession of them indefinitely after payment of some sum in respect of his possession of them for some period.
The duty is payable by the bailor of the goods: ss 131B(2) and 131A ("vendor"). It is rated in the cases of credit purchase agreements and hire-purchase agreements to the total amount of the payments (interest, insurance and "other" charges apart) which in some circumstances the bailee may be required to pay after he has obtained delivery of the goods, or in the case of rental agreements of the described kind, to the price at which the goods could have been bought at the inception of the hiring: 131A "purchase price". In substance, the duty is rated to the amount which the bailee is to pay after the creation of the bailment, if he is to be entitled to obtain the property in the goods, or in some instances, because the property in the goods has or will pass to him either at or subsequent to the time of the bailment or if he is to acquire the right to the indefinite possession of the goods. By s 131D the person who is to pay the tax may not add the amount of the duty to the amount payable by the bailee or otherwise seek to recover its amount.
It was said by the plaintiffs in opposing the demurrers of the defendants that the forms of transaction which are caught by the definition of "credit purchase agreement" are all well recognized modes by which goods, including goods manufactured in Australia, pass into consumption and they claim that to enter into such a transaction is to take a step in the movement of the subject goods along the line from manufacture to consumption. But let so much be supposed, in the sense that goods do with great frequency move into consumption by bailment, -- and I find no need to pass upon the correctness of the supposition -- is the stamp duty on the credit purchase instruments as defined a tax upon the step of placing them into consumption, or is it a tax upon an aspect of the transaction which is but collateral to that step?
The tax is not levied upon some category or class of goods, nor upon all transactions in the particular goods by which at the particular stage in the movement of the goods into consumption, goods of that kind do so move. Generally a duty of excise will be a tax with respect to a class of goods, but in my opinion, it is not necessarily so; and that the duty is not in this instance imposed generally upon some definable category or class of goods is not in itself a reason for denying that the duty is an excise.
As the duty in the instant case is only payable upon an instrument which provides, or evidences an agreement which provides, that moneys are payable after delivery of the goods to the consumer, whether or not the instrument itself also provides for the bailment, it may be said that, although the instruments will, in general, precede the delivery of the goods, the duty is levied at a point after the price of the particular goods or the total of the rental payments to be paid by the consumer has been fixed. In that sense it could be said that the tax is exacted after the goods have passed into consumption and is rated to the amount of payments to be made after they have passed into consumption.
The significance of these facts should not be displaced by the circumstance that the existence of the legislation imposing the tax may, in economic theory or in fact, have an influence on the extent to which goods do go into consumption by bailments accompanied by such agreements as fall within the statutes operation, and thus affect the totality or rate of the movement into consumption of goods of those kinds which may be made the subject of such agreements. As I have said, resort to economic theory or speculation in this fashion should not be had in order to resolve the legal problem as to the essential nature of the impost.
In any case the person required to pay the tax is not necessarily conducting a business of engaging in such transactions in goods of the same class as the goods the subject of the transaction which attracts the duty and thus that person is not necessarily in a position to recover the amount of the duty imposed in the price or total of rental payments in subsequent transactions. Indeed, in the case of some of the plaintiffs it would be proper to infer that the price of the goods or the total sum which should be paid for their indefinite hire was fixed before that plaintiff became associated in any respect with the goods or any transaction in them. The definition of "purchase price" in s 131B is careful to exclude the accommodation charges; and except as to the rental agreements only includes the balance after deposit payments or allowances have been made.
All these are considerations of which I do not deny the relevance but no single one of them is to my mind of transcendent value in resolving the question as to the nature of the tax. But, having them all in mind, in my opinion, the duty is in substance a tax upon that aspect of the parties' bargain or arrangement as stipulates for the manner of payment, after the goods have moved into consumption, of a price or a totality of rental payments, such price or total payment having already been determined, so far as appears, uninfluenced in amount by the manner of its payment. Thus the duty may be described as a tax upon the extent of the forbearance of the vendor to exact his "price" at the time the goods are placed into consumption.
In my opinion, such a duty is not a tax upon a step in the process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. In particular, it is not a tax upon the step of placing the goods into consumption. To use the short form, it is not a tax upon the goods. It is not a duty of excise.
In my opinion, the demurrer should be upheld in each case.