• Legal database
Legal database

CASE Y37

Members:
PJB Burns

Tribunal:
Administrative Appeals Tribunal

Decision date: 9 July 1991

PJB Burns (Member)

The matters in dispute in this reference are:

  • 1. Whether bottle racks and bottle cabinets manufactured and sold by the applicant company qualify for exemption from sales tax under certain items in the First Schedule to the Sales Tax (Exemptions and Classifications) Act 1935 (``the Exemptions Act'').
  • 2. Additional tax imposed by the Commissioner of Taxation (``the Commissioner'') under sec. 45 of the Sales Tax Assessment Act (No. 1) 1930 (``the Assessment Act'').

2. The applicant company is registered for sales tax purposes as a manufacturer and did not include in monthly sales tax returns lodged with the Australian Taxation Office (``ATO'') the above-named items as goods subject to sales tax. Following inquiries the Commissioner advised the applicant that the cabinets and racks retain their identity as manufactured goods, they are not goods of a kind used in the construction or repair of buildings nor are they wrought into or attached so as to form part of buildings or fixtures. He requested the applicant to submit a supplementary sales tax return for the period 1 July 1985 to 31 October 1987 including the items as taxable goods and to make payment of the tax due in respect of the goods sold during that period.

3. In reply the applicant requested a Special Assessment under sec. 25AA of the Assessment Act and advised the Commissioner that it did not propose to comply with the requirement to lodge a supplementary return.

4. The Commissioner then issued an assessment to the applicant under sec. 25(1) of the Assessment Act and imposed additional tax under sec. 45. The applicant lodged an objection against the assessment of tax and the imposition of additional tax and on its disallowance requested reference to the Tribunal.

5. At the hearing the Commissioner was represented by Dr S. Kenny of counsel and the applicant by Mr M. Bearman of Mallesons Stephen Jaques solicitors.

6. Three witnesses were called by the applicant company namely its managing director (``M''), a food services consultant, Mr T. Smallwood, and Mr W. Damm, a specialist bar builder.

7. In addition to the documents provided under sec. 37 of the Administrative Appeals Tribunal Act 1975 a number of exhibits were tendered comprising a bundle of photographs showing the racks and cabinets installed in bars, plans of the racks and cabinets and drawings showing the design of a number of bars. Other documents tendered include copies of the applicant's invoices covering the periods July 1986 to October 1986 and July 1987 to December 1987, price lists, brochures and witness statements submitted by M and Mr Damm. Also tendered were the racks and cabinets which are the subject of this application together with spirit measuring dispensers manufactured by the company.

8. The applicant company's operations were explained in some detail by M who is a qualified professional mechanical engineer and is responsible for the design and development of its product range. M also arranged for the Tribunal to visit premises where the cabinets and racks had been installed.

9. The applicant company's main activity is the manufacture of spirit and liquor dispensing equipment. It also produces the timber racks and cabinets which are the subject of this reference upon which the dispensers and bottles of spirits may be mounted.

10. The liquor dispensing products have been approved by the National Standards Commission and meet the requirements of the Weights and Measures Act in Victoria and other States and have been approved for use to give an accurate volume for the consumer in the commercial sale of alcohol. Dispensers produced by the company include two manually operated models, one of which is less accurate than the other and is sold overseas or in States where the requirements are less stringent than

ATC 370

in say Victoria, and an electrical model which achieves guaranteed volume dispensation by way of an electronically controlled time cycle.

11. Each of the units is designed to be attached to a solid fixed mounting lug and to have an inverted bottle of spirits suspended above it. In each device the pouring cycle is initiated by a plunger. In the case of the manual units this entails firmly pressing the plunger with a finger. The electrical unit is operated by either the glass or the finger.

12. The racks consist of a specially prepared piece of timber to which aluminium and plastic components are fixed to support the bottles. The applicant sub-contracts the timber work to Rochewood Components which organisation purchases the timber, machines it to the applicant's design, places the necessary slots in the timber, chamfers it, cuts it to length and stains it. It is then brought into the applicant's factory where the aluminium and plastic components are fitted. The racks are available in four, six or eight bottle configurations to suit 750 millilitre to 2 litre bottles. Other racks may be supplied custom-made to order and it is said these are often specified by architects.

13. The aluminium bottle support arm is located in vertically milled slots in the timber rack. A 3/16th inch roofing bolt is inserted from the rear (wall side of the rack) passing through the aluminium support arm through the timber and is attached to the plastic mounting by way of a square nut.

14. In his statement M said that the method of construction of the rack ensures the whole structure is permanent and tamper-proof. He asserted that the mounting lug and bottle support arm become an integral part of the timber rack and once the rack has been fixed to the supporting wall neither the aluminium bottle support arm nor the plastic mounting lug can be removed from the timber rack without physically damaging the whole structure.

15. The cabinets are made wholly of solid and veneer timber. M said that the construction is robust as the cabinet may be required to support up to eight 2 litre glass bottles of spirit plus dispensers which would weigh up to 25 kilograms excluding the timber.

16. The cabinets consist of an open box-like structure with a rear panel attached to two end frames, a top piece and an internal supporting ceiling. The end pieces are joined by a front panel. All selected timber is of substantial dimensions in order to be strong enough to support the weight of the dispensers and bottles of spirit. The rear panel has the plastic mounting lug permanently secured to it. The cabinet is fixed to about shoulder height so that the dispensers are in a convenient position to be operated by the bar staff.

17. M said that the cabinets are manufactured in four, six and eight bottle configurations to suit 750 millilitre to 2 litre bottles and that other sizes may be supplied custom-made to order. They are suitable for either electric or manual dispensing units. M said that as with the racks the cabinets are designed to be attached permanently to buildings and other fixtures such as bars.

18. When electric dispensers are used the rack or cabinet as the case may be is often wired into the electrical system of the building in which it is installed. M said in evidence that neither the rack or cabinet in those instances could be relocated without the services of an electrician and builder. He said the products may be fixed to a wall by the use of a ramset gun where a nail is driven through the back of the product into the wall, or in the case of a brick wall it may be fixed to the studs by the use of toggle bolts. Usually the products are also glued to the wall.

19. M said that he was qualified in engineering as well as specialising in the design of bars. He said that in the bar building trade he would define joinery as basic timber products used in conjunction with other materials but with the overall view that the finished product is predominantly worked timber. Further he said the cabinet which is made entirely of timber (with the exception of the mounting lugs) is clearly joinery.

20. In the case of the rack he said that if the aluminium and plastic were sold separately then clearly they would not be joinery but once they were permanently affixed to a worked piece of timber, then the rack as a whole takes on the characteristics of a piece of joinery notwithstanding that the rack as a whole is not made of timber. This, he said, is because a rack is predominantly timber and the bulk of the work goes into manufacturing the piece of timber. It is the timber that is displayed as the

ATC 371

final work with the aluminium and plastic being hidden by the bottle.

21. He also considered the cabinets and racks to be builders' hardware. He said that in his opinion the definition of builders' hardware in the bar building industry is standard components or items which are commonly used and are readily available on order from bar building suppliers and are ready for use in renovation or repair of a bar in a way which incorporates those items into a permanent position. This means, he said, that items which are installed as ``stand alone units'' would not qualify under his definition of builders' hardware. In cross-examination by Dr S. Kenny, counsel for the Commissioner, M said that he was not qualified as a builder or carpenter and the company does not itself install its products. They are sold as complete units although later when re-examined by Mr Bearman he stated he had wide experience with bars and also experience in the building trade gained by working with his father-in-law who is a retired builder.

22. M said that the dispensing units are designed to be attached to a solid fixed mounting lug and that the applicant company manufactures the lugs which are made of plastic fitted with a metal component which retains the mounting plate of the spirit dispenser in position. He said that only lugs made by the company are capable of being used with the electrical dispensers. However the other products were designed for use with other lugs used around the world as otherwise overseas sales of the dispensers might have been restricted. In that regard he said that about 50% of the production of dispensers was sold overseas. He said the lugs are sold as separate items but a lug cannot be fixed to a shelf by itself. However it may be attached to a shelf by means of a shelf clamp but the mounting lug would need to be attached to the aluminium components. The lug on its own could not be used to hold a bottle and some other means would need to be adopted for that purpose. In his opinion the racks and cabinets are the only practical way to support the bottles and dispensers. He said that sometimes cabinets and racks were sold without dispensers, for example when renovations were done to a bar or a new bar was being constructed. The builders would not want the dispensers to be lying around during building work but the dispensers manufactured by his company were the only ones which would fit on to the racks.

23. M asserted that the cabinets and racks are not intended to be relocated and they become fixtures. He said the intent is to fix them permanently and his concept of permanently is they become a fixture in the bar similar to a door in a room. He asserted that because of the manner in which they are fixed to a wall, that is, by screws, nails, glue or with the ramset gun there could be physical damage to the unit on its removal, the extent of which would depend upon the method employed to fix it into position. He also referred to the claim that where the electrical dispensers are fitted the cabinets or racks are ``hard wired'' into the building necessitating the need to use a qualified electrician on their removal.

24. Mr Smallwood the second witness called is a food consultant and he stated that he has a Diploma of Industrial Design from the Royal Melbourne Institute of Technology and a Certificate of Catering Supervision from the William Angliss College and has held those qualifications for 25 years. He said he was not a qualified joiner or builder and his work entails the design of facilities and operating systems together with written specifications covering both food and beverages for catering businesses. He said that from time to time he had specified the use of the racks in his designs. He explained that commercial kitchens are made of stainless steel and timber which are referred to in the trade as the metalwork package and the woodwork package of the construction. He said the joinery would form part of the latter and the installation of the racks would form part of the joinery package. Three architects' drawings were tendered one of which showed the design and fittings for one of the bars at the Florentino Restaurant and the other two bar installations at the National Tennis Centre. Racks manufactured by the applicant are installed at both of those locations.

25. In respect of the installation at the Florentino Mr Smallwood said that the idea was to blend the units into the bar and although he could not remember specifically he thought they would have been affixed with screws and glued on to the backing material of the bar.

26. The installations at the National Tennis Centre were placed in position in work stations

ATC 372

to enable the speedy dispensing of spirits and he said the racks were fixed through panels and then laminated over so that the fixing could not be seen by customers. He said the Health Department required the unit to be sealed in place. He said the unit could be taken off reasonably well but the removal of the fixing studs would necessitate taking the laminate off the customer side and realigning it to hide the fixing of the holes left by the removal of the holding bolts.

27. He said he could not recall the mounting lugs and mounting arms being used on their own and he regarded the timber work as a convenient method to mount them. He said the usual method of attaching the rack was with bolts and screws.

28. The next witness was Mr W. Damm who said he was a qualified cabinet-maker and in 1965 in West Germany he obtained a master's degree in cabinet-making. He said that he was in his own business in Germany from 1965 to 1980 when he came to Australia and established a business here as a bar builder. He said his company designs and builds custom-built bars and accessories and that it uses cabinets and racks produced by the applicant company in bars which it constructs.

29. He said that once the design of a bar had been agreed with the customer it is built at the factory in single units. These are then assembled at the customer's premises. He said that the units produced by the applicant were convenient as most of the bars which they built have a pelmet which hangs from the ceiling. He said that in houses with plaster walls it is often difficult to locate the studs and for that reason the racks or cabinets are helpful because they can be fixed exactly on to the studs and the pelmets attached to them. The racks or cabinets are fixed to the wall by means of screws and glue. Several photographs of bars built by Mr Damm were tendered in evidence, one of which showed the pelmet supported by the rack. Mr Damm said that in this case if the rack was removed by an unqualified person the whole thing would collapse.

30. He said that in his opinion the cabinets and racks may also be described as builders' hardware in the bar building trade. He said he would define ``builders' hardware'' in the context as items which could be purchased as ready-made discrete units necessary to finish a bar so it can function according to its design. He asserted that the cabinets and racks fall within that definition because the spirit dispensers cannot operate to dispense alcohol without the rack or cabinet.

31. When questioned by counsel as to what he considered joinery to be he said:

``The word join says it. Joining timber parts together.''

and that he considered the racks and cabinets were joinery. He said he believed that joinery is a trade where a joiner needs to be able to use raw timber from the forest after it has been dried to join it to other pieces of timber and to manufacture furniture or cabinets or other items. He said he considered a cabinet-maker to be a specialised joiner.

32. In reply to questions from Dr Kenny, Mr Damm said that he had been building bars since he was 17 years old and by bars he meant the counter including the cabinets, the surrounds and the wall furnishings. He had built bars in restaurants, hotels and private homes. Accessories would include bar mirrors, perhaps a carving and spirit dispensing units. He distinguished the racks from accessories such as bar stools and glass racks in that the racks would be integrated into the bar design whereas glass racks could be removed from a wall by taking out two screws and shifting them somewhere else. He said that an electrically wired rack would be fixed to a wall in the same manner as the other racks by means of screws and glue. He was then referred to one of the racks tendered in evidence and asked whether considering his definition of joinery as joining pieces of wood together the rack would fall into that definition.

33. He said the rack produced was made from one piece of timber but in many instances to obtain the correct size it would be necessary to join pieces together.

34. M was also questioned in respect of sales invoices tendered for the periods 7 July 1986 to 23 October 1986 and for the period 8 July 1987 to 22 December 1987 and he said the invoices covered all of the company's sales during those periods. It was agreed between the parties that these invoices were representative of invoices issued by the applicant company to customers. The invoices disclosed that sales were mainly to distributors with the exception

ATC 373

of promotional sales through American Express during 1987. The invoices were prepared by computer and provided for the classification of goods sold for sales tax purposes and the calculation of sales tax where applicable. The racks and cabinets were classified as being exempt from sales tax.

35. M said in evidence that when the applicant company first started selling the racks and cabinets they sought advice by telephone from the Melbourne office of the ATO and were told the products appeared by the description given to be exempt from tax. He said this opinion was reaffirmed by an opinion sought by the applicant company from Messrs Arthur Andersen & Co in July 1985. Arthur Andersen advised him that built-in cabinets were generally exempt from sales tax and the racks and cabinets fell into that category. He said that later in 1987 when additional products were being developed he again sought advice from the ATO and was told a permanent fixture to a wall was not taxable. A furniture item would probably be taxed at 10% but a bar fitting which was movable would be taxed at 20%. He said the ATO advised him that if required he could get a written advice from the office.

36. In answer to questions from Dr Kenny, M said a written confirmation was not sought from the ATO because he formed the impression from his discussions with them the products were obviously of a non-taxable nature. Further not being experts at tax the thought did not cross his mind that a written advice would have been required or even if such would have been available. He said the latest enquiry in 1987 was made whilst an audit was being conducted by the ATO of the applicant company's sales tax affairs.

37. The claims for exemption from sales tax fall for consideration under Item 84(2) and/or Item 90(c) in the First Schedule to the Exemptions Act. Item 84(2) reads as follows:

``Builders' hardware (not including electrical fittings, accessories or equipment, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems, or fittings, accessories or attachments for, components of, or goods designed to form part of, such duct work or channelling, or goods covered by item 12, 14 or 14A in the Third Schedule), being goods of a kind used in the construction or repair of, and wrought into or attached to so as to form part of, buildings or other fixtures, including -

  • Bolts, brackets, brads
  • Catches, ceiling ties, clips, clouts, corrugated fasteners
  • Decking spikes, door bells, door handles, door knockers, door sheaves and tracks, door stops and stoppers, door and cupboard catches, door and gate springs, drawer pulls, dryvins
  • Flush rings
  • Gate loops
  • Hasps, hinges, hooks, hooks and eyes, house numbers
  • Knobs
  • Latches, letter boxes, letter plates, locks, locksets and keys therefor, loxins
  • Metal frames for the support of wash basins
  • Nails, name plates, nuts
  • Padbolts, panel pins
  • Rivets
  • Staples, screws, scruins
  • Washers [(Acts Nos 1 to 9) - 24 August 1983]''

38. Opening the case for the applicant Mr Bearman referred the Tribunal to
Magna Stic Magnetic Signs Pty. Limited & Anor v FC of T 89 ATC 5000 at p. 5003 where Wilcox J. said:

``... In my opinion the intention of the draftsman was to exempt only items which fulfil three criteria: firstly, that they answer the description `builders' hardware' in ordinary parlance, secondly, that they are `goods of a kind used in the construction or repair of... buildings or other fixtures' and, thirdly, that they are goods wrought into or attached to buildings or other fixtures so as to form part thereof.''

And again at the same page where his Honour said:

``The view I have expressed is consistent with the approach taken by Kitto J. in the High Court of Australia, in an unreported decision,
D.F.C. of T. v. Academy Plastics Proprietary Limited (22 March 1956)), the only authority on item 84(2) of which I am aware. In that case his Honour received and considered evidence from seven witnesses experienced in the hardware and building trades to the effect that the article then under

ATC 374

consideration was not `builders' hardware' as they understood the term and as it was understood in those trades. Kitto J. summarised their view as being `that the article was not one in which builders, or architects in preparing specifications for builders, would be interested, and that such demand for it as there might be would come from householders interested in adopting gadgets as kitchen accessories in the course of enjoying, rather than building, their houses'.''

39. Mr Berman asserted that the evidence of M and of Mr Damm was relevant in the determination of the matter. M he said was a mechanical engineer who had experience in the building industry through a family association and Mr Damm was an experienced bar builder and qualified cabinet-maker. Their evidence he said supported the proposition that both the racks and cabinets are ``builders' hardware'' and he referred in particular to Mr Damm's statement:

``That builders' hardware covered items purchasable as ready-made discrete units necessary to furnish a bar and the bar cannot operate to dispense alcohol without the rack and cabinet.''

40. Mr Bearman said that the definitions of ``builders' hardware'' given by both M and Mr Damm contained the notion that ``builders' hardware'' refers to something that is readily purchasable and ready-made. It is something you could simply order, go to the shop, purchase the item and the builder could take it away and it would be ready for installation. He asserted that in the bar building industry that is what ``builders' hardware'' is.

41. In her opening submission Dr Kenny for the Commissioner said that the evidence of M and Mr Damm as to the meaning of ``builders' hardware'' is irrelevant and she pointed out that they are not builders. M is an engineer whilst Mr Damm is a cabinet-maker. She also referred to
Feltex Commercial Interiors Pty Limited trading as Co Design v FC of T 90 ATC 4925 where Lockhart J. said that he took a different view from Wilcox in Magna Stic (supra) at pp. 5004 to 5005 about the use of evidence as to the meaning of the term ``builders' hardware'' in the building trade in that the expression is to be defined according to its natural and ordinary meaning and not by the evidence of people in the building industry. He then went on to say [at p. 4936]:

``But I agree with him that the expression `builders' hardware' means materials, tools etc. which are designed for use by builders. I do not think one needs to resort to evidence within the trade for that proposition.''

42. Dr Kenny also referred to the case of Magna Stic (supra) where Wilcox J. said at p. 5004:

``The Macquarie Dictionary relevantly defines `hardware' as `building materials, tools, etc; ironmongery'. `Ironmongery' is defined as `the goods, shop or business of an ironmonger' and an `ironmonger' is `a dealer in metal ware, tools, cutlery, locks, etc'. The Australian Concise Oxford Dictionary relevantly defines `hardware' more narrowly, simply as `ironmongers' goods'. `Ironmonger' is circularly defined as `dealer in hardware, etc'.''

His Honour went on to say:

``I take the wider definition, which includes building materials... designed for use by builders, being materials, tools, etc.''

43. Dr Kenny submitted that is in accord with what his Honour Justice Lockhart said in the Feltex case. That is it is a question of whether these articles are designed for use by builders being materials or tools used in buildings. Dr Kenny referred to the decision in the first instance of Mr Justice Davies in
Thomson Australian Holdings Pty Ltd & Ors v FC of T 88 ATC 4916 at p. 4917 where he said:

``I agree with Mr Hill's view that the task of the Court is to determine the essential character of the goods, what essentially the goods are, not some characteristic that the goods might have. Essential character derives from the basic nature of the goods, from what they are, though composition, function and other factors necessarily play a part.''

44. She asserted that in this case the Tribunal must determine the essential character of the goods and not necessarily the manner in which the goods are used in the trade. On that basis the racks and cabinets (which were not of the ``built in'' variety) do not conform to the characterisation of ``builders' hardware''.

ATC 375

Further she said that their purpose is to hold the spirit dispensers manufactured by the applicant and the fact they are purchased by builders does not alter their essential character.

45. I find that the prime purpose of the goods is to facilitate the accurate dispensation of spirits in a bar and they are not ``builders' hardware'' within the natural and ordinary meaning of the term as used in Item 84(2) (see Magna Stic and Feltex Commercial Interiors Pty Limited (supra)).

46. I turn now to consideration of Item 90(c) which reads as follows:

``Timber, including -

  • (a)...
  • (b)...
  • (c) joinery and turnery of a kind used in the construction or repair of, and wrought into or attached to, so as to form part of, buildings or other fixtures.''

47. Mr Bearman submitted that for the purposes of Item 90(c) ``joinery and turnery'' in ordinary parlance includes joinery and turnery in the bar and catering industry. He said that M's evidence should be accepted as he had designed wooden bars and although an engineer he had work experience in the bar industry. He had also designed the vintage keeper which is made of wood and that as a result is an expert for the purposes of the Tribunal. Mr Bearman also submitted that cabinet-making is a form of joinery and that Mr Damm is eminently qualified given his many years in both the bar trade and the cabinet-making trade to give evidence as to what is joinery. In his evidence Mr Damm had said that he believed that joinery is a trade where a joiner needs to be able to use raw timber from the forest after it has been dried, to join it to other pieces of timber and to manufacture furniture or cabinets or other items. He said he considered a cabinet-maker to be a specialised joiner. Mr Bearman then said that if the aluminium arms and lugs which are attached to the racks and cabinets were sold separately they would be subject to sales tax. But in the case under review the exemption is claimed on the basis that the total unit becomes joinery because it is a whole and it is predominately worked timber.

48. In reply Dr Kenny said that the Commissioner submits first that in reading Item 90(c) one must have regard to the introductory words, that is, it must be timber including joinery or turnery of a kind, etc., used etc., that is the item must consist wholly of timber in order to satisfy Item 90(c). In this case it is apparent from any examination of the items that they consist of plastic and metal as well as wood and furthermore that the components which constitute the plastic and metal parts in fact form important functional purposes and make the items completed units. Dr Kenny said that it is not appropriate to consider these articles as anything other than an integrated whole and that in substance has been the evidence given by each of the witnesses. She went on to say that paragraph (c) of Item 90 should not be read expansively because it is simply placed as one of a series of lettered paragraphs descriptive of timber and that approach she said is supported by Burchett J. in
FC of T v Thomson Australian Holdings Pty Ltd & Ors 89 ATC 4696. She referred the Tribunal to p.4702 where his Honour said:

``When attention is directed not merely to the word `catalogues', but to the phrase `catalogues or price-lists', the narrower meaning of `catalogues' is immediately suggested.''

and later on the same page:

``It would be to strike one off-key note in a scale to intrude, into item 51's succession of discrete subject matters, the universe of things that would be imported by understanding `catalogue' in a wide sense. In its context, para. (c) should be regarded as dealing with another single category of documents, of a character separate from that dealt with by each of the other paragraphs of sub-item 1, and by sub-item 2.''

49. Dr Kenny then said that the evidence of M cannot be accepted as relevant because his qualifications are that of an engineer. She also said that in the case of Mr Damm although his was perhaps the best evidence before the Tribunal she submitted that the best evidence would be that of a joiner himself. Mr Damm belonged to a different trade and in any event the appropriate course for the Tribunal is to look at what is generally accepted as joinery within the trade and to contrast the difference between for example, cabinet-making and joinery. She referred to The Macquarie Dictionary which defines ``joinery'' as:

ATC 376

``the art or trade of a joiner''

and defines ``joiner'' as:

``a craftsman who works in wood already cut in shape; a worker in wood who constructs the fittings of houses, furniture, etc.''

She said therefore it would be clearly appropriate to adopt a definition of joiner as a worker in wood who constructs the fittings of houses etc. and joinery as being the art or trade of a joiner or that which he does in this particular connection. That she said would include such items as window frames, door frames, staircases and things clearly falling within the notion of joinery. She acknowledged that the definition in The Shorter Oxford English Dictionary is very like that offered by Mr Damm in his evidence.

50. She then submitted that the preferred definition of joinery is that contained in The Macquarie Dictionary because it reflects what Division 12 in the Schedule to the Exemptions Act was intended to cover, that is matters relating to building. In relation to cabinet-making The Shorter Oxford English Dictionary defines ``cabinet maker'' as:

``One whose business is to make cabinets and fine joiner's work.''

51. She conceded that there was some overlap between cabinet-making and joinery but none the less there was also a distinction between them. But whatever way one looks at it, she submitted, the racks do not fall within even the most narrow definition.

52. I find that the racks and cabinets are not joinery and turnery as required for the purposes of Item 90(c) and I accept Dr Kenny's submissions and the definitions which she has supplied to the Tribunal of what is joinery and turnery. Also for reasons similar to those discussed in respect of the term ``builders' hardware'' I do not accept that articles the prime purpose of which is to facilitate the dispensing of spirits satisfy the definition of ``joinery and turnery''.

53. On the view I have adopted that the goods are neither ``builders' hardware'' nor ``joinery and turnery'' the claims that they are exempt from sales tax under Item 84(2) or Item 90(c) in the First Schedule to the Exemptions Act must fail. However, it is appropriate to acknowledge the detailed submissions and analyses of the numerous cases which both Mr Bearman and Dr Kenny referred to with reference to the words, ``Goods of a kind used in the construction or repair of... buildings or other fixtures.''

54. It is not my intention to enter into a further analysis of those cases and it is sufficient to say I am satisfied that none of them provides a basis for the conclusion that the articles are goods of a kind used in the construction or repair of buildings or other fixtures (see Academy Plastics (supra)).

55. The final matter for decision is the additional tax imposed under sec. 45(2) of the Assessment Act. Mr Bearman submitted that the actions of the applicant in making enquiries from the ATO as to the sales tax status of the goods provided the Commissioner with sufficient information upon which to base a decision. He also contended that the advice given by the Commissioner's officers that the items were not subject to tax constituted a ruling by the Commissioner and therefore he was precluded from imposing additional tax under sec. 12D of the Sales Tax Procedure Act 1934. Mr Bearman also referred to the meaning of the words ``false and misleading'' contained in sub-sec. 45(2)(a) of the Assessment Act.

56. However, I have no hesitation in finding that the Commissioner's officers had not been fully informed in respect of the racks and cabinets and the Commissioner was empowered to impose additional tax under sec. 45.

57. On the other hand there are extenuating circumstances in that the applicant had made several attempts to ascertain the correct status of the goods through its enquiries to Messrs Arthur Andersen and the ATO. In those circumstances the additional tax imposed should be recalculated at the rate of 20% flat.


Back to top

This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.