PM Roach SM
Administrative Appeals Tribunal
P.M. Roach (Senior Member)
On 14 March 1983, following the enactment of the Taxation (Unpaid Company Tax) Assessment Act ("the TUCT Act") the Commissioner gave notice to a married man (H) and his wife (W) - as the former shareholders in a limited liability company (Camden) - of an assessment against Camden in the sum of $14,394 for Div. 7 tax and of the Commissioner's intention in due course to issue vendor recoupment assessments against H and W pursuant to the TUCT Act. H and W nominated H to represent them in relation to the assessment so raised and in that capacity H, with the assistance of a national firm of chartered accountants, initiated an objection against the assessment of the company.
2. By doing so, H prevented the Commissioner from issuing assessments against either his wife or himself until such time as "the period for objecting against the assessment (against Camden) has expired and any objection against the assessment has been finalised" (cf. sec. 5(1)(f) and (2)(f) TUCT). For the purposes of that section, an objection against an assessment shall only be taken to have been finalised if:
"(a) there is no proceeding that has been instituted in relation to the objection under Division 2 of Part V of the Assessment Act that has not been determined; and
(b) the time for instituting proceedings under that Division in relation to the objection has expired"
(sec. 5(10) TUCT).
- "For the purposes of paragraph (10)(a), any proceeding under Division 2 of Part V of the Assessment Act that has lapsed or otherwise been terminated shall be taken to have been determined" (sec. 5(11) TUCT) but, "For the purposes of paragraph (10)(b), the time for instituting a proceeding in relation to an objection under Division 2 of Part V of the Assessment Act shall not be taken not to have expired by reason only of the possibility that an extension of that time might be granted" (sec. 5(12) TUCT).
3. The Commissioner contends that the objection initiated by H came to an end and was "determined" on or about 20 February 1984, and in any event prior to 27 February 1984. If the Commissioner is correct as to that, it follows that, as soon as the objection was so "determined", the Commissioner was thereon entitled to immediately issue vendor recoupment assessments against H and W. He did not do so.
4. If the representations he has made in the present proceedings are upheld, the result will be that the Commissioner will have received from this Tribunal some confirmation that he was entitled to proceed with the issue of vendor recoupment assessments before the end of February 1984. Whether the Commissioner is and has been so entitled depends upon whether
ATC 769or not in February 1984, H, as the nominated representative of his wife and himself, took steps which were effective to require the Commissioner to then refer for independent review a decision which the Commissioner had taken to wholly disallow the objection lodged by H with reference to the assessment which had issued against Camden. As the issue was argued before me, that turned on nothing more than the question as to whether the request for reference and the $2 fee required to "accompany" it were received by the Commissioner within the period of 60 days allowed for that purpose.
5. The reference could properly be before this Tribunal by force of sec. 223 of the Taxation Boards of Review (Transfer of Jurisdiction) Act (No. 48 of 1986). That Act, as its title suggests, provided for this Tribunal to assume and become responsible for the exercise of jurisdiction previously the responsibility of Taxation Boards of Review. However, the particular reference will only properly be before this Tribunal if it was properly before a Board of Review immediately prior to that transfer of jurisdiction. The reference will have properly been before a Board of Review if it was the subject of a request for reference in accordance with the provisions of the Income Tax Assessment Act as it stood at the time when the request for reference was made. At all material times the relevant provisions of that Act (omitting immaterial parts) provided as follows:
"185 A taxpayer dissatisfied with any assessment under this Act may, within 60 days after service of the notice of assessment, post to or lodge with the Commissioner an objection in writing...
186 The Commissioner shall consider the objection, and may either disallow it, or allow it either wholly or in part, and shall serve the taxpayer by post or otherwise with written notice of his decision.
187(1) A taxpayer dissatisfied with the decision may, within 60 days after such service, in writing request the Commissioner either -
- (a) to refer the decision to a Board of Review for review; or
188(1) If the request is accompanied by a fee of $2, the Commissioner shall refer the decision or forward the objection to a Board or Court in accordance with the request.
There was not, and there is not now, any power under any circumstances to extend the time: a circumstance which over many years worked to effect substantial injustices. That procedural deficiency has since been rectified in that the Taxation Boards of Review (Transfer of Jurisdiction) Act now provides that time may be extended in appropriate cases. But that power may not be exercised when the period within which the request for reference might be made ended before 1 July 1986 (sec. 221 of the Transfer of Jurisdiction legislation).
6. Despite the contentions advanced before me, on 27 June 1985, the Commissioner referred on for review a request for the review of his decision made 21 December 1983 [sic] on the objection lodged with him by H on 28 April of that year. That purported to be in compliance with a request dated 17 February 1984 prepared on the letterhead of one "Dr Peter Clyne" who had come to represent H in these proceedings. When it became clear at a preliminary conference that the Commissioner was going to contend that the Tribunal held no power in the matter, it was agreed that that issue wold be dealt with as a preliminary point. Subsequently, ill health prevented the new representative of the applicant from attending the hearing, whether to act as an advocate; or to give evidence in support of the applicant's case; or to attend in response to a summons for production of documents issued on the application of the Commissioner. Despite that, submissions in writing were received by the registry on the day of hearing, both by telegram and by courier. Those submissions have been taken into account.
7. When there was no appearance by or on behalf of the objector at the hearing and, in consequence, no application for an adjournment such as had at one time been foreshadowed, the question then arose as to what course would then be followed for the Commissioner. Instead of then relying upon any contention that the objector's application should be dismissed for non-appearance; or upon a contention that the applicant bore the burden of having to adduce some evidence to establish that the application was properly before the Tribunal, the Commissioner chose to
ATC 770call evidence and set up a positive case to establish that the request for reference was out of time. (Later, after some evidence had been called, counsel for the Commissioner requested that the application be dismissed for non-appearance. In the exercise of my discretion, I refused the application.)
8. Having heard the evidence of the several witnesses called for by the Commissioner, I am satisfied on the evidence before me:
- (a) that notice disallowing the objection issued and was posted by prepaid certified mail on Wednesday 21 December 1983;
- (b) that the notice was addressed to the objector at his address for service, c/o the firm of accountants which had lodged the objection in question and was addressed to them at the appropriate box number at the relevant post office;
- (c) that in the ordinary course of mail that letter would have been delivered to that post office box for collection within one or two working days and, even if there had been some unremarkable delays, within four working days: something which at that time of year would have resulted in delivery on Thursday 22, Friday 23 or Wednesday 28 December 1983;
- (d) that the letter so posted was actually delivered to and received by the firm, and noted by the firm, on Friday 23 December 1983;
- (e) that on 4 January 1984, a letter was sent by that firm to the objector enclosing a copy of that notice and seeking his instructions.
9. As to the request for reference, I have considered not only the copies of correspondence dated 17 February 1984 and also 17 February 1985 [sic] addressed by the present representative of the applicant to the Commissioner, but also the original of the letter dated 17 February 1984 produced by the Commissioner; the envelope in which that letter had been enclosed; the cheque forwarded therewith; the other cheques drawn on the same account in numerical sequence in the period 4 February to 14 March 1982 (noting the circumstance that in numerical sequence the relevant cheque followed cheques dated as drawn on 17 February (2); 18 February; and 25 February; and preceded cheques dated 1 March and 29 February; and the internal working papers of the Commissioner produced in evidence.
10. I am positively satisfied that the request for reference bearing the date 17 February 1984 was not received by any person in the offices of the Commissioner before 27 February 1984; and that it was physically delivered into mail boxes in the Commissioner's offices by a person unknown between approximately 8 a.m. on that day and 8 a.m. on the following day. (The evidence satisfied me that, to ensure no disadvantage to taxpayers, mail received between the last clearance of the Commissioner's box on one working day and the first clearance on the working day next following was treated as having been received on the earlier of those two days.) In all the circumstances it is clear to me that the request for reference was made out of time.
11. The question which arises is, what consequences should flow from that determination, and with what effect. I start by observing that neither the applicant nor the Commissioner sought to persuade me not to receive evidence or consider submissions and argument relevant to the conclusion I have reached. Nor did either make any application to a court seeking an order which would have directed me not to do so.
12. This Tribunal is the creature of statute. It has the jurisdiction conferred by Parliament and only that jurisdiction. In the exercise of the jurisdiction so conferred, it uses the power and authority and discharges the responsibilities specified by the Parliament. Neither the jurisdiction, nor the powers available to be used in the exercise of that jurisdiction, can be enlarged by any opinion or determination of the Tribunal. As Brennan J., now a Justice of the High Court of Australia, but then sitting as President of this Tribunal said in
Re Adams and the Tax Agent's Board (1976) 7 A.T.R. 87 at p. 89:
"An administrative body cannot therefore lawfully exercise authority merely because it is of the opinion that it has the authority. Its opinion is not the charter of its powers and discretions. It derives its powers and discretions from and in accordance with the law. It is the court's judgment and not the administrative body's opinion which defines the extent of (as well as the constitutional support for) its statutory authority."
His Honour went on to say:
"An administrative body with limited authority is bound, of course, to observe those limits. Although it cannot judicially pronounce upon the limits, its duty not to exceed the authority conferred by law upon it implies a competence to consider the legal limits of that authority, in order that it may appropriately mould its conduct. In discharging its duty, the administrative body will, as part of its function, form an opinion of its own authority. The function of forming such an opinion for the purpose of moulding its conduct is not denied to it merely because the opinion produces no legal effect."
13. In my view, recognition of the soundness of the distinctions made by his Honour makes clear the appropriateness of the course adopted in this case. The parties agreed on, and the Tribunal approved of, a proposal that the issue canvassed in the earlier passages of this decision should be first considered. That was not done in order to bring down a definitive and binding determination as to whether there was "jurisdiction" to consider and determine the substance of the objection. It was done in order to decide whether or not the Tribunal should embark upon a consideration of the issues raised by the objection.
14. In my view, the question which the Tribunal must of necessity decide is whether to proceed further and consider the application before it; or should refuse to do so.
15. The Tribunal might decide to proceed with the reference because it holds the view that it has the power to determine it. Such a view may be correctly or incorrectly formed. If a court of appropriate jurisdiction considers the view so formed by the Tribunal to be incorrect and that it is embarking on issues beyond its jurisdiction, the Court may direct the Tribunal to desist from proceeding. If, without such intervention, the Tribunal proceeds and purports to determine the reference but in doing so exceeds its jurisdiction, its error will be open to be corrected by the courts.
16. Alternatively, the Tribunal may decline to proceed further with the reference. Its decision not to proceed may be founded upon a considered view that in the circumstances it has no jurisdiction or it may reflect a view, which some seem to have held, that it is beyond power for the Tribunal to form such a view. But it is not the reasoning, so much as the determination not to proceed, which is important. If by refusing or failing to proceed the Tribunal errs and thereby fails to discharge the responsibilities cast upon it, the courts can compel it to proceed. However, if the Tribunal has correctly recognised the limits of its jurisdiction, the matter will rest there.
17. On the view I have formed it is quite inappropriate that I should purport to make any order as to the assessment objected to. Accordingly, I merely direct that the application before me be removed from the list of matters awaiting determination before the Tribunal.