Re Beavis Bros Construction Pty. Ltd. (in liq.).
Judges:Bryson J
Court:
Supreme Court of New South Wales
Bryson J.
These proceedings were commenced by summons on 21 August 1986. The Deputy Commissioner of Taxation is the plaintiff and Paul Richard Hutchins, the liquidator of the company, is the defendant.
The company made income tax returns for the years of income 1978 and 1979. For 1978 the Deputy Commissioner issued an assessment described as a debit assessment on 14 December 1978, and for 1979 the Deputy Commissioner issued a document described as a Nil Tax Notice on 30 September 1980; this printed memorandum referred to the company's file number and return and said "No tax is payable on the income shown on the return lodged for the year ended 30 June 1979 and no refund is due". It is not an assessment, nor a notice of assessment.
The Public Officer of the company who made those returns is Mr Peter Graeme Hutchins; he continues to be the Public Officer. In those returns he gave his address for service of notices as:
"C/- P.G. Hutchins, 8th Floor,
406 Lonsdale Street,
MELBOURNE 3000."
He continued to give that address until in the 1983 return he notified a change of address and gave the following:
"P.G. Hutchins, Levart House,
75 Mark St. Nth Melbourne 3051."
By a special resolution of a general meeting of members held on 30 December 1981 it was resolved that the company be wound up voluntarily and that Paul Richard Hutchins of 406 Lonsdale Street, Melbourne be appointed liquidator. Mr Paul Richard Hutchins embarked on his duties as liquidator, and gave notice of his appointment to the Commissioner of Corporate Affairs and to the Deputy Commissioner of Taxation. First he notified the Commissioner of Corporate Affairs that his address was c/o Levart House, 75 Mark St, Nth Melbourne Vic. 3051.
On 6 April 1983 the Deputy Commissioner of Taxation wrote to Mr Paul Richard Hutchins as liquidator saying that on the basis of the returns and information furnished there was no income tax owing in respect of income derived to the date of liquidation, and pointing out the liquidator's potential personal liability for any tax payable in respect of income derived during the period of liquidation.
The Deputy Commissioner of Taxation lodged some proof of debt on 3 December 1985 "for recoupment tax" but the terms of that proof are not in evidence.
On 15 May 1986 the Deputy Commissioner of Taxation wrote to Mr Paul Richard Hutchins enclosing a proof of debt and saying "Enclosed is a proof of debt for income tax, which replaces the proof of debt lodged on 3 December 1985 for recoupment tax. Please advise if a dividend can be expected in this matter." The proof of debt was an affidavit by a clerk employed in the Deputy Commissioner's Office which averred:
"... It is within my own knowledge that the debt hereinafter deposed to was incurred, and that such debt, to the best of my knowledge and belief, still remains unpaid and unsatisfied.
That the abovenamed Company was, at the date of the order for winding-up the same, viz., the Nineteenth day of April 1982, and still is justly and truly indebted to the said Deputy Commissioner of Taxation in the sum of Forty-one thousand nine hundred and eighty-three dollars and sixty-one cents as shown by the account endorsed hereon..."
Particulars of the account were given, in substance being:
Income Tax assessed on
income derived during the
years ended:
$
Undistributed Profits
Tax for the year ended
30 June 1978 pursuant
to Div. 7 of the
Income Tax Assessment
Act 5,850.00
Income Tax for the
year ended 30 June
1979
The reference to an order for winding up and the reference to 19 April 1982 as a significant date take their places in the body of unexplained anomalies yielded by the evidence.
On 19 May 1986 the Deputy Commissioner wrote to Mr Paul Richard Hutchins as liquidator referring to what was said to be an enclosed notice to him as liquidator under sec. 215 of the Income Tax Assessment Act, again drawing his attention to sec. 254 of the Act and the possibility of his incurring a personal liability for income tax on income during liquidation, and stating "Be advised that our letter dated 6 April 1983 should now be disregarded". Presumably what was to be disregarded was the statement "there is no income tax owing in respect of income derived to the date of liquidation". The Commissioner has tendered in evidence a copy of what was said to be an enclosed notice under sec. 215 stating that the sum of $42,000 appeared to the Commissioner to be sufficient to provide for any tax then or thereafter to become payable by the company and in effect requiring the liquidator to set aside that sum. The liquidator has maintained in correspondence that he did not in fact receive that notice with the letter of 19 May but it is not significant in this appeal to determine whether or not he did.
The liquidator wrote to the Deputy Commissioner on 4 June 1986 asking for some information in relation to the proof of debt "in order for me to give full consideration to your proof of debt". The Commissioner replied on 30 June 1986 and I will set out the request and replies.
- Request (a) The date the assessment was claimed to be served in accordance with the Income Tax Assessment Act.
- Reply (a) The notices of assessment were served on 9 August 1984 on one of the former shareholders in accordance with sec. 18 of the Taxation (Unpaid Company Tax) Assessment Act and is therefore deemed to have been correctly served on the company.
- Request (b) The address on which the assessment is claimed to have been served in accordance with the Income Tax Assessment Act.
- Reply (b) The Commissioner is not authorised under sec. 16 of the Income Tax Assessment Act to disclose the address of service where the notices of assessment were served.
The plain meaning of these assertions by the Commissioner is that the notices of assessment for undistributed profits tax for the years 1978 and 1979 and income tax for the year 1979 had not been served on the company itself. This has never been withdrawn or explained by the Commissioner in any document or in any affidavit read on his behalf; yet the case of fact advocated before me was that it was incorrect. It would have been of assistance to me to have some explanation of how the assertions came to be made.
The liquidator wrote a letter to the Deputy Commissioner on 29 July 1986 enclosing a notice of rejection of proof of debt and making some lengthy comments thereon. The short effect of the comments was that a liability to pay tax cannot under the Constitution be imposed without leaving open some judicial process by which the person liable may show that in truth he is not taxable in the sum assessed. The liquidator went on to say that there were grounds which he referred to on which objections to the assessments would be lodged if assessments were received by the company. He enclosed a notice of rejection of proof of debt which gave these grounds.
"Notices of assessment have not been served on the Company in accordance with the Income Tax Assessment Act (refer your letter dated 30 June 1986)."
Thereafter the Deputy Commissioner commenced the present appeal.
On 29 August 1986 the liquidator and the Public Officer wrote a letter, signed by both, to the Deputy Commissioner of Taxation asking in accordance with sec. 171 of the Income Tax Assessment Act "... that you make an assessment of income tax on the above Company with regard to years of income ended 30 June 1978, 1979, 1980, 1981, 1982, 1983 and 1984". In reply the Deputy Commissioner by a letter of 26 January 1987 said that the
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details of issue dates of assessments were those set out and gave a list for the years 1978 to 1984 inclusive which included a reference for 1978 to the debit assessment of 14 December 1978 and for 1979 to the Nil Tax Notice of 30 September 1980.Again I was asked to treat this as plainly a mistake but no explanation was offered in evidence or in any other useful manner.
Exhibits A, B and C are copies of notices of assessment, certified by the Deputy Commissioner. Exhibit A was a notice of assessment for the 1978 year of income assessing the company for $5,580 Div. 7 tax, said to be "additional tax"; the exhibit bears issue date 9 August 1984 and the following address:
"Beavis Bros. Constructions P/L in Liqn.,
P.G. Hutchins as Liqr,
C/O P.G. Hutchins
75 Mark Street,
Nrth Melbourne Vic 3051"
Exhibit B is a certified copy of a notice of assessment for the 1979 year of income assessing Div. 7 tax of $22,507.50, again bearing issue date 9 August 1984 and the same address.
Exhibit C is a certified copy of a notice of assessment of income tax for the 1979 year of income, bearing issue date 9 August 1984 and similarly addressed. It showed the amount of tax assessed and other amounts debited as $28,033.32, an amount credited of $14,407.20 and a balance of $13,626.12.
There is a cumulation through these three notices so that Exhibit C treats the amount assessed in Exhibit A as a cumulating debit and Exhibit B treats the amounts assessed in Exhibits A and C as a cumulating debit, so that it claims a total of $41,983.62.
Affidavit and oral evidence was given by Michael John Jones, a recovery clerk employed with the Deputy Commissioner, about the ordinary routine followed for despatch of notices of assessment. Mr Jones had no part in handling the three notices of assessment of which Exhibits A, B and C are certified copies. He has not himself operated the clerical and machine processes of preparation and despatch of notices of assessment, but he has a little knowledge based on having seen that process followed through on a small number of occasions. On the basis of his evidence I find that if the ordinary processes had been followed in relation to Exhibits A, B and C, it is probable that the notices of assessment would have been despatched to the address which I have set out on 9 August 1984 or very shortly thereafter; Australia Post would have been used.
Annexed to Mr Jones' affidavit are copies of some file material. The papers relating to the preparation of the 1979 Div. 7 assessment included workings which were not explained to me in detail, but seem to show calculations consistent with what I read in Exhibit C (which does not relate to Div. 7 tax at all). There is a body of printed material on the form which I cannot follow; under "Output Control" there are boxes for information under "send Forms" and "Notice Checked" but no action has been noted in either of these boxes. There is another box marked "Checked" but the action noted there is "Rewrite".
A rubber stamp on the document says "Computer Issued".
Nothing on the document appears to me to record that a notice of assessment was in fact sent to the company; there are however parts of the document which are consistent with someone having foreseen that such a notice would be sent to the company.
There is another work sheet relating to 1978 Div. 7 tax, once again leading to no action noted under "Output Control", "Send Forms", "Notice Checked"; the word "Rewrite" appears. There is a similar pattern for the work sheet for the 1979 income tax calculation.
These work sheets raise doubt in my mind whether the ordinary routine for sending notices of assessment to the company was in fact followed.
Then there were put in evidence copies of letters apparently prepared for despatch to a number of persons to whom (according to the terms of these letters) copies of the notices of assessment of income tax and Div. 7 tax were to be sent "as a preliminary step towards the raising of a recoupment tax assessment" on the footing that the recipient of each letter was a vendor shareholder and had some responsibility under the Taxation (Unpaid Company Tax) Assessment Act 1982.
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In evidence are copies of letters in similar forms directed to seven different persons. These copies of letters each include as enclosures copies of the three assessments Exhibits A, B and C. Whether or not the events in fact happened, there were ample motivations for the preparation of the assessments and a number of copies thereof and their despatch to a number of persons other than the company.
To my mind none of the records produced in evidence tends to show that the actual exercise of placing a copy of each of these three notices of assessment in envelopes and despatching them to the company by post was ever performed.
The addresses given on the notices of assessment could give rise to confusion because although Paul Richard Hutchins as liquidator was possibly an appropriate recipient of notices of assessment, Peter Graeme Hutchins as Public Officer was plainly an appropriate recipient, but he was not the liquidator; he was appropriate because he was the Public Officer. Both had given and I have no doubt could be found on most ordinary business days at the same address at 75 Mark Street, North Melbourne.
Mr Paul Richard Hutchins gave evidence on affidavit that he (I read this to mean he personally and not as a statement about all persons at his office) had not received any notices of assessment such as those in question. I accept this evidence.
Mr Peter Graeme Hutchins gave evidence that he had not received these notices of assessment. He gave affidavit evidence, supplemented orally, about the organisation of business in his office and the numbers of people working there, and he was cross-examined. While his evidence does not exclude altogether the possibility that the three notices of assessment were received in the post at the office used by both Messrs Hutchins, but were not drawn to the attention of either of them, his evidence leads me clearly to find that that possibility is indeed a very small one so that, looking at the matter in terms of probability, I take the view that it is most improbable that either of the Messrs Hutchins has actually received the three notices of assessment in question, and further that it is most improbable that any of those notices was received at the office but not drawn to the attention of either of them. It has not been shown in any way which I regard as satisfactory, or in any way which I could accept, that copies of those notices in envelopes addressed to the company ever left the Deputy Commissioner of Taxation's offices.
I must now address myself to the Deputy Commissioner's contentions which are to the effect that despatch and delivery of notices to the company are quite unnecessary, and that the Deputy Commissioner is entitled to have his proof of debt accepted in the liquidation whether or not notices of assessment have ever been given to the company, and even if the true facts are that no such notices have ever been given to the company.
These contentions are essentially based on sec. 177(1) of the Income Tax Assessment Act. At first hearing this proposition it seemed unlikely that the legislation could have been intended to have the effect that a taxpayer company which has never been given notice of an assessment and hence has never had an opportunity to object to it, to seek review or to appeal is bound conclusively on the production in evidence of a copy of a notice of the assessment. If the legislation has that effect a question of constitutional validity would be raised; it has long been recognised that legislation which made an administrative decision relating to taxation incontestable would be of doubtful validity. The source of the doubt has been explained in differing ways. The doubt was stated in this way by Dixon C.J. in
D.F.C. of T. v. Brown (1958) 100 C.L.R. 32 at pp. 40-41:
"Although there is no judicial decision to that effect, it has, I think, been generally assumed that under the Constitution liability for tax cannot be imposed upon the subject without leaving open to him some judicial process by which he may show that in truth he was not taxable or not taxable in the sum assessed, that is to say that an administrative assessment could not be made absolutely conclusive upon him if no recourse to the judicial power were allowed. This is not the occasion to go into the basis of this view. All that is necessary is to note that it exists and that hitherto the legislature has respected it."
See too Williams J. at p. 52.
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An argument relating to what was said to be an incontestable tax was considered by the High Court in
Giris Pty. Ltd. v. F.C. of T. 69 ATC 4015; (1969) 119 C.L.R. 365; see per Kitto J. at ATC pp. 4020-4021; C.L.R. pp. 378-379 and Windeyer J. at p. 383 referring to the general proposition that a delegation by Parliament of legislative power is invalid.
As now established by observations in the High Court in
MacCormick v. F.C. of T. 84 ATC 4230 at pp. 4236-4237; (1984) 158 C.L.R. 622 at pp. 640-641 (Gibbs C.J., Wilson, Deane and Dawson JJ.): "Such an incontestable impost is not a tax in the constitutional sense..." See too Brennan J. at ATC p. 4247; C.L.R. p. 658.
The plaintiff's counsel referred me to the Taxation (Unpaid Company Tax) Act 1982, particularly sec. 18. It is necessary to notice the provisions of sec. 18 in order to understand some passages in the evidence, which show that measures have been taken with respect to recovery or attempted recovery of recoupment tax against persons other than the company. It would of course be observed from the terms of sec. 18 that when sec. 18 is complied with the company does not receive notice of the assessment, and if actual notice of the assessment is received by the company as a result of action under sec. 18 that is no more than an accidental consequence of the delivery of the notice to somebody else. However, the present case is not concerned with any alleged liability for recoupment tax and the alleged liability of the company does not depend on the legislation of 1982. Counsel also took me through the provisions of sec. 177 of the Income Tax Assessment Act, sec. 204, 208 and 174(1). He also took me to the provisions of sec. 17 relating to a levy of tax and the definitions in sec. 6 of "assessment". It is plain to me that an assessment and a notice of assessment are in the language of the Act quite different things as is reflected in the language of sec. 171 to 177.
Counsel also took me to sec. 291(1) of the Companies Act 1961, and told me that the plaintiff's case was that at the date of winding up the tax later assessed was in each case a present obligation, although not payable until a future time. He submitted that the whole scheme for imposition and collection of tax had the effect of the legislative scheme considered in
Commissioner of Stamps (W.A.) v. West Australian Trustee, Executor and Agency Co. Ltd. (1926) 38 C.L.R. 63. A conclusion which he asked me to draw from judgments in that case was that once the end of a year of income has passed and events have occurred which give rise to a liability for taxation, liability to tax exists, the amount of the tax is ascertainable and it is not a material matter that it is still for a public officer to attend to the task of making a calculation. (In relation to Div. 7 tax it was necessary for a further ten months to pass after the end of the year as the tax was payable in the event that there was not a sufficient distribution.) He submitted that as the plaintiff has produced notices of assessment which fulfil sec. 177, inquiry into the accuracy of their particulars is precluded. He referred to
F.J. Bloemen v. F.C. of T. 81 ATC 4280; (1980-1981) 147 C.L.R. 360. He developed some submissions on the assumption that the notice of assessment had in fact been served on the company, but I have found that this did not happen.
The defendant's counsel submitted that liability for tax could never arise until an assessment is served on a taxpayer. He relied on observations of Kitto J. in
Batagol v. F.C. of T. (1963) 109 C.L.R. 243 at pp. 251-252. In relation to that citation the plaintiff's counsel submitted that Batagol's case established that where the Commissioner forms the view that no tax is payable and says so in a letter, the letter is not an assessment; Kitto J.'s observations were directed to the question whether or not the letter could be described as an assessment and were not directed to the presently relevant argument.
I was also referred to
Clyne & Anor v. D.F.C. of T. & Anor 81 ATC 4429 at pp. 4432 and 4437; (1981) 150 C.L.R. 1 at pp. 9 and 17 and to
George v. F.C. of T. (1952) 86 C.L.R. 183 at p. 207. The plaintiff's counsel submitted that Clyne's case and the observations in it should be taken as limited to the context of sec. 218. He submitted that it was necessary in that case for the Court to consider whether there was a liability for tax on the view which the Court there took that "due" meant "due and payable" and it was necessary for the resolution of that case to apply the words "due and payable".
He also submitted that George's case is a decision on and limited in effect to sec. 167 dealing with default assessments.
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The plaintiff's counsel referred me to the decision of the Full Court of the Federal Court of Australia in
Taylor v. D.F.C. of T. 87 ATC 4441 and to the judgment of Woodward and Northrop JJ., particularly at pp. 4,442-4,446. He then contended that sec. 177 and 201 have the effect that a debt for tax exists and is payable notwithstanding that a right of objection still exists. He submitted that a liability for tax arises at the conclusion of the year of tax, that it is quantified by assessment but already existed before the assessment, and that the issue of an assessment precipitates the taxpayer's right to contest liability and also precipitates the Commissioner's ability to claim that the amount is presently payable; yet even before service of the notice of assessment the Commissioner has the right to recover indirectly, for example by action under sec. 218, and to withhold reimbursement of credits under sec. 221 and related provisions. He contended then that the liability and a provable claim exist from the end of the year of income and that the function of the notice of assessment is to quantify that claim, conclusively except by objection review or appeal. He contended that irrespective of whether the notice of assessment was ever forwarded to the company the assessment was made and this is sufficient for the present purposes.
It is I think important to observe that the plaintiff's case to the effect that there was a liability for tax depends wholly on the alleged effect of the documents referred to as notices of assessment having regard to sec. 177. Apart from those notices there is no evidence to establish that the company had an income in any of the relevant periods upon which it might have incurred a liability to tax, and no evidence dealing with whether the company made a sufficient distribution. That is to say, unless I can discern facts which show that the plaintiff has a provable debt from the notices of assessment, I cannot look to any other evidence and conclude from it that although the amounts of tax on the income are not yet shown and not yet susceptible of exact proof, it is clear that there was some income and hence that there is some liability to tax. As a matter of principle the plaintiff is not exclusively limited to proofs offered under sec. 177; the plaintiff could if he wished marshall evidence showing that the company had an income in each of the relevant years, and a body of reasoning showing what its taxation liability was. Nothing like those courses was taken.
It may be significant to observe also that apart from any evidentiary effect of the documents referred to as notices of assessment, there is no evidence of the carrying out of any process which might be conceived of as the process of assessment of taxation, a different process to simply typing out numbers on pieces of paper, being a process of applying reasoning to facts to produce a conclusion about the amount of a liability.
In view of provisions found in sec. 18 of the Taxation (Unpaid Company Tax) Assessment Act 1982 it would be rational for the Commissioner to serve copies of notices of assessment on persons other than a company taxpayer and to omit to serve such notices on the company itself, in the course of some attempted compliance with one of the provisions of sec. 18. There is not evidence before me which establishes that there has been compliance with any of those provisions, but references here and there in the evidence to recoupment tax suggest that the Commissioner may have been proceeding in a way in which deliberate omission of service of notices on the company itself could possibly have been his chosen course. The Commissioner does not before me establish or attempt to establish that, notices having been given to other persons under some provision of sec. 18, there is no need to give notice to the company itself. For example, dealing with subsec. (1), the Commissioner's evidence did not identify a person by whom vendor's recoupment tax is likely to become payable or establish any relevant opinion formed by the Commissioner. If the Commissioner had done so the question might have arisen whether the section has the effect of binding not only the persons to whom notice is given but also the company itself to the assessment without the company's having had any opportunity in fact to object, and in that case whether its operation to that effect was valid. At one point, the Commissioner's counsel seemed to claim some benefit from subsec. 18(5) but as there is no basis in the evidence for findings establishing that that subsection applies, for example, proof of the non-application of subsec. (1) or of the opinion referred to in subsec. (5), I am left to
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understand that that is not ultimately the Commissioner's case.The decision of the Full Court in Taylor v. D.F.C. of T. turned on the construction of sec. 221H of the Income Tax Act; whether, where the taxpayer became bankrupt on 28 June 1980, tax payable in respect of his income for the year ended 30 June 1980 is "tax payable by the employee" within the meaning of sec. 221H(2)(b), and whether the circumstances that the taxpayer had become discharged by effluxion of time from debts provable in his bankruptcy discharged him from liability in respect of the year of tax which ended two days after his bankruptcy so that tax in respect of the income of that year was not "tax payable by the employee". I am not concerned with the operation of sec. 221H. However, Woodward and Northrop JJ. expressed the view at p. 15 that apart from that section an assessment issued for the year ended 30 June 1980 would be a provable debt in the bankruptcy, notwithstanding as the facts of that case were that some years passed before the assessment. Adopting their view, that view would apply a fortiori in the present case as each of the relevant years of tax, even if increased by the addition of 10 months for a sufficient distribution, had expired before the commencement of the winding up whereas in Taylor's case the year of tax still had two days to run before his estate was sequestrated. Essentially the conclusion reached by Woodward and Northrop JJ. is based on their views on the operation of sec. 82(1) of the Bankruptcy Act 1966, which would appear to apply in the present case having regard to sec. 291(2) of the Companies Act 1961 and small indications in the evidence from which I infer that the winding up is the winding up of an insolvent company. The extensive learning collected by Woodward and Northrop JJ. on the meaning in various statutes of provisions referring to income tax being due, or due and payable is not in my opinion presently important because no statutory provision in which the words "due" or "due and payable" are significant is encountered as one proceeds from sec. 17 of the Income Tax Assessment Act imposing a liability to pay tax on the company by way of sec. 291 of the Companies Act 1961 to sec. 82(1) of the Bankruptcy Act 1966; at no stage is it important to establish when payment of tax is due and it is to my mind not a difficulty for the provability in the winding up of income tax in respect of a year of tax completed before the commencement of winding up that there has been no assessment or that the assessment was later in time than the commencement of winding up. Nor would it be a difficulty in principle if there had been no assessment, or no notice of assessment at all: that the company had income and was liable to tax could be proved in other ways. The difficulty would be a difficulty of valuing the liability, not a difficulty in principle of the provability of the liability. The following statement of Gibbs J. (as Sir Harry Gibbs C.J. then was) in the Federal Court of Bankruptcy in
Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 F.L.R. 256 at p. 260 appears to be untouched by later learning:
"It is now settled that the effect of these and similar provisions (scil sec. 17, 204, 208 and 209) is that the liability to income tax is imposed by the statute itself and that assessment is only a matter of ascertaining the extent of a liability, so that tax is a debt due and owing, although not payable, notwithstanding that no assessment has been made..."
If the plaintiff had offered proofs that the company had income in the relevant years and had not made sufficient distributions, I could have found that these are debts provable in the winding up, there being a need to establish the value of those debts. The process of making an assessment giving notice of an assessment and allowing the effluxion of time for objection, or on objection completing the processes of objection review or appeal would have been one way of establishing the amount or value of the debts; but would not have been the only way in which those matters could have been established. The plaintiff has not attempted this.
The plaintiff's sole course has been to tender and rely on the notices of assessment, relying only on sec. 177(1) of the Income Tax Assessment Act.
Subsection 177(1) refers to "a notice of assessment" and to a purported "copy of a notice of assessment" and its internal language shows as must otherwise be very plain that the notice of assessment referred to is a different thing to an assessment. It also must be plain that in the language of the subsection, a notice
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of assessment is conceived of as a piece of paper, a well established use of the word "notice" but at least originally a figurative use of that word; it is quite plain that notice in another literal sense of knowledge of an assessment is not what is referred to. Section 177(1) follows closely on sec. 174 which creates a duty of the Commissioner to serve notice of an assessment as soon as conveniently may be after any assessment is made. It is necessary to ask what circumstances must exist in relation to a piece of paper if it is to be "a notice of assessment" referred to in subsec. 177(1). The references in the subsection both to a notice of assessment which may be produced in evidence, and also to a copy of it appear to have regard to commonplace principles of the law of evidence with respect to documents, under which the original of a document is ordinarily required to be tendered or its absence explained, which being explained the copy may be tendered; the contemplation is plain in subsec. (1) that the notice itself is a different thing to a copy and that the notice itself may be produced and tendered in evidence. A document containing particulars of an assessment made within one of the meanings attributed to that word in sec. 6, or specifying matters required to be specified by subsec. 174(2) is not in my opinion a notice of assessment unless the process of service of notice upon the person liable to pay the tax, referred to in subsec. 174(1) has been carried out in relation to it. A document is not a notice unless it is notified to or served on someone, and it seems to me that it is not possible to adopt any view of the meaning of "a notice of assessment" in subsec. 177(1) which is divorced from a process such as sec. 174 requires of bringing the notice to the notice or knowledge of somebody or serving it on somebody. In my opinion a document purporting to be a notice of assessment which has not been served upon the person liable to pay the tax in the manner in which the Commissioner is directed to serve it in sec. 174(1) is not a notice of assessment within the meaning of those words in sec. 177(1), and the conclusive results for which that subsection provides are a consequence of the fact that the document is a notice of assessment in this sense. Mere production of a piece of paper does not establish that it has been so served, and hence does not establish that it is a notice of assessment with those conclusive consequences; and subsec. (3) and (4) of sec. 177 do not do that work. In my view the finding which I have made with respect to their not having been served disqualifies the documents in evidence from being notices of assessment within the meaning of subsec. 177(1).The documents are no more than they otherwise would be notices of assessment because they have been brought to the notice of persons other than the taxpayer, the company in these proceedings. Service of the document on the persons said to be vendor shareholders is simply irrelevant. A document does not become a notice by being served on some extraneous person, nor is the process assisted or affected by the fact that service on or delivery to that extraneous person was authorised or required by some other legislation; the dealings with the notices or copies of the notices under the Taxation (Unpaid Company Tax) Act 1982 do not in my opinion affect the question whether the document is a notice of assessment within the meaning of the Income Tax Assessment Act 1936, a question which is answered with the assistance only of the provisions of that Act relating to such notices.
For these reasons I am of the view that the Commissioner has established neither that the company is liable for tax in the amounts shown in the notices of assessment, nor that the company is liable for tax in some amounts which remain to be established.
My order is:
The proceedings are dismissed with costs.
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