TEMPLES WHOLESALE FLOWER SUPPLIES PTY LTD v FC of T

Judges:
Wilcox J

Burchett J
O'Loughlin J

Court:
Full Federal Court

Judgment date: Judgment handed down 22 April 1991

Wilcox, Burchett and O'Loughlin JJ

At issue in this appeal is the correctness of a decision of the respondent Commissioner by which he ``imposed'' a penalty under s. 221EAA of the Income Tax Assessment Act 1936 (``the Act''). There is, however, a preliminary question whether it was open to the appellant to challenge that decision upon the ground and by the procedure it chose.

The appeal comes from the orders of a judge of the Court made upon an appeal from the Administrative Appeals Tribunal. The matter had come before the Tribunal pursuant to a reference under s. 189 of the Act.

The beginning of the dispute was an inspection of the appellant company's records on 30 September 1987, followed by a notice dated 4 December 1987 to the appellant headed ``PAY AS YOU EARN SYSTEM: PENALTY FOR FAILURE TO DEDUCT''. The notice stated:

``An inspection of your records on 30 September 1987 disclosed that you had not made tax instalment deductions from employees in accordance with sub-section 221C(1A) of the Income Tax Assessment Act for the period 1 June 1986 to 30 June 1986.

...


ATC 4389

As a result of your failure to comply with your obligations to make tax instalment deductions... a penalty as set out below, is now payable by you in accordance with the provisions of s. 221EAA...

The total penalties of $28,328.44 is [sic] due and payable within seven days...

Please return the enclosed official receipt with your payment which should be made payable to the Deputy Commissioner of Taxation...''

An objection against the decision embodied in this notice was disallowed on 31 March 1988, and it was the decision to disallow the company's objection which was then referred to the Administrative Appeals Tribunal. The Commissioner's Statement of Findings on Material Questions of Fact, Evidence and Reasons for the Decision, made under s. 37(1)(a) of the Administrative Appeals Tribunal Act 1975, was brief. After referring, as ``background'', to the business of the appellant company (miscalled ``the taxpayer'') as a wholesale florist, it stated:

``The notice, the subject of the objection, was issued following an inspection of the taxpayers' business records.''

It continued:

``The Dispute

(i) Whether an amount credited by journal entry to the name of a director in the books of the taxpayer represents a payment in accordance with definition of `salary or wages' in section 221A of the Income Tax Assessment Act.

...

(iii) Whether penalty was correctly imposed in terms of section 221EAA of the Income Tax Assessment Act.

Findings

Wages records revealed that directors' bonuses totalling $136,000 were credited to each individual's loan account with the company and no tax instalments were deducted at source.''

Under the heading ``Evidence'', there followed only a list of the records which showed that no deduction of tax instalments had been made.

It will be important for an understanding of the arguments raised in this appeal to note that the statement under (i) and the findings appear to place entire reliance on the credits to the loan accounts in question for the conclusion that a payment of salary or wages had been made to each director. This observation is highlighted by the final section of the statement, under the heading ``REASONS FOR DECISION'', which, relevantly, declares:

``Directors' remuneration credited by a journal entry to the names of the directors in the books of the taxpayer constitutes a payment within the definition of salary or wages under section 221A of the Income Tax Assessment Act.''

When the matter came before the Tribunal, minutes of a meeting of directors of the appellant company, held 7 June 1986, were tendered. The minutes included the following resolution:

``RESOLVED that the following directors fees & bonuses be and are hereby payable from the profits of the year ended 30th June, 1986 -

      HENRY TEMPLE                             $17,000
      MEG TEMPLE                                17,000
      MICHAEL TEMPLE                            17,000
      RICHARD TEMPLE                            17,000
      RUSSELL TEMPLE                            17,000
      JANE TEMPLE                               17,000
      ANNE TEMPLE                               17,000
      CATHERINE TEMPLE                          17,000
                                              --------
                                              $136,000
                                              --------''
              

The Tribunal was also provided with an agreed statement of facts. This took the form of a letter from the Australian Government Solicitor to the appellant's solicitors together with an addendum subject to which, the Court was informed, the contents of the letter were agreed. Relevantly, the letter read as follows:

``I suggest the following agreed statement of facts: -

1. Temples Wholesale Flower Supplies Pty Limited employs certain persons including each of eight directors;

2. Directors' Fees and bonuses totalling $136,000.00 have been credited to the Directors of the company by way of journal entries as at 30 June of the year in question;


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3. No group tax in respect of the amounts credited by journal entry was paid to the Commissioner;

4. Each of the amounts credited being the said Directors' fees or bonuses were [sic] available, on call, for use by each respective Director;

5. Each of the eight Directors returned their [sic] respective Directors' fees or bonuses as income in each director's individual income tax return for the relevant year;

6. Temples Wholesale Flower Supplies Pty Limited claimed deductions for the amount credited by way of Directors' fees and bonuses in the company's income tax return for the relevant year.''

The addendum read as follows:

``That no monies were actually paid by cash, cheque or otherwise to the directors/employees and the only evidence of a liability or of a `payment' is the journal entries in question and there is no evidence elsewhere by Minute of the Company nor actual or implied agreement that salary and wages were to be paid by journal entry.''

It will be observed that the addendum to the agreed statement of facts was entirely consistent with the Commissioner's s. 37(1)(a) statement of the first point of dispute, the point to which the addendum was relevant. This was, indeed, the only point raised on behalf of the appellant before the Tribunal. The contention was that each journal entry, standing alone, did not constitute a payment. (It was common ground that no director drew any part of the sum credited to his loan account at any relevant time.) Consequently, so the appellant argued, no penalty had been incurred. The Tribunal appeared to express some surprise that this was the only point taken, referring to what it plainly thought might amount to extenuating circumstances relevant to the question of remission; but it accepted that, as the matter had been presented, the sole issue was whether there had been, in each case, a payment.

The explanation for the confinement of the dispute to the conclusions which could be drawn from the documents and the agreed facts is, at least so far as the Commissioner is concerned, clear enough. It is that the particular dispute was treated as a test case, as the Tribunal noted ``expected to avoid any need for the Commissioner to refer a number of other cases to the Tribunal for determination''. Obviously, a decision on the documents, if favourable to the Commissioner, would have been more likely to achieve that result. But the way the appellant put the case raised another question. Was it open to the Administrative Appeals Tribunal to determine the issue the appellant raised?

The learned Judge before whom this matter came at first instance (whose decision is reported at 90 ATC 4610) took the view that the question was not open to the Administrative Appeals Tribunal. He drew attention to the fact that, under the Act, the penalty is imposed directly by the operation of s. 221EAA itself, and not by some action of the Commissioner. Section 221EAA(1) commences:

``Where an employer... refuses or fails, at the time of paying salary or wages to an employee, to deduct from the salary or wages the amount required to be deducted under this Division, the employer is liable to pay to the Commissioner, by way of penalty...''

Similar language is used to express the imposition of penalties for breaches of other requirements of the scheme for deduction of tax at source: see ss. 221F(12)(b)(ii)(A) and 221G(4A)(d)(i). By s. 221R, each of these penalties:

``shall be a debt due to the Commonwealth and payable to the Commissioner, and may be sued for and recovered in any court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his official name.''

It is against the background of these provisions that s. 221N(2) confers on the Commissioner a power to ``remit the whole or part of any amount payable by an employer by virtue'' [of, inter alia, the relevant provisions of s. 221EAA]. Section 221U(1) then provides:

``Where a person who has been notified of a decision of the Commissioner made under subsection 221N(2)... is dissatisfied with the decision, the person may, within 60 days after service on the person of notice of the decision of the Commissioner, lodge with the Commissioner an objection in writing against the decision stating fully and


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in detail the grounds on which the person relies.''

By s. 221U(2), in such a case:

``The provisions of Division 2 of Part V (other than section 185) apply in relation to an objection made under subsection (1) in like manner as those provisions apply in relation to an objection against an assessment.''

(The effect of this last provision, which cannot be sensibly applied except mutatis mutandis, was considered in
Glambed v. FC of T 89 ATC 4259 at 4263.) In the present case, the learned primary Judge commented [at 4612]:

``Those provisions show that the only matters with which the Tribunal is concerned are matters of discretion under sec. 221N as to the remission by the Commissioner of the whole or a part of a penalty which the Act imposes. An amount under Div. 2 of Pt VI is a debt due to the Commonwealth and is recoverable in any court of competent jurisdiction. The recoverability of the sum is not dependent upon the making of any decision by the Commissioner or the issue by him of an assessment. The sum is recoverable by virtue of the application of the Act to the facts of the case. The Administrative Appeals Tribunal has no jurisdiction in respect thereof, for it is not a court of law.''

If this view were correct, there would be a striking and inconvenient break in the symmetry of the provisions made by the Act for the determination of disputes concerning the liability of persons to pay tax, additional tax and penalties. Although the Act is the direct source of the liability to pay a penalty under s. 221EAA, in practice no question of such a liability will arise until the Commissioner makes a decision to require payment. That is a decision which it is natural to describe, and which in this case the Commissioner himself described, as the imposition of a penalty. In his statement under s. 37(1)(a) of the Administrative Appeals Tribunal Act, he stated the dispute as involving ``whether penalty was correctly imposed''. Such a dispute may include both the liability to be required to pay, and the exercise of the discretion whether or not to remit the whole or part of the payment. According to his Honour's view, the two questions would have to be determined in separate proceedings (with their attendant added costs). Of course, a recovery proceeding by the Commissioner will be brought when he chooses to bring it, and in the meantime interest accrues at 20% per annum. Although the accrual of interest could confer some benefit on the Commissioner, the inconvenience and added cost of administration of the Act would burden him as well as affected citizens, and the Commissioner did not, before us, support by argument the view that the Administrative Appeals Tribunal was without power to deal with the whole dispute.

A similar question has arisen previously, though in the context of the former provisions under which the task of administrative review of decisions upon objections was committed to the Boards of Review. In
Richardson v. FC of T (1932) 2 ATD 19; (1931-1932) 48 CLR 192, a decision apparently not cited to his Honour, the High Court considered the effect of s. 67 of the Income Tax Assessment Act 1922, by which it was provided that:

``(A)ny person who... fails to include any assessable income in any return... shall be liable to pay by way of additional tax the amount of one pound or double the amount of the difference between the tax properly payable and the tax assessed upon the basis of the return lodged, whichever is the greater...: Provided that the Commissioner may, in any particular case, for reasons which he thinks sufficient, remit the additional tax or any part thereof.''

Dixon J. noted (at ATD 21; CLR 203):

``It is said that s. 67 is a penal provision which operates automatically unless the Commissioner exercises his power of remission, and that the additional tax is recoverable independently of assessment by proceedings at law to enforce a statutory obligation to pay a sum of money.''

Upon this basis it was argued that the Board of Review had no authority to deal with additional tax, nor did the court upon appeal from the Board, the Board's function being limited to the Commissioner's assessments of tax. Dixon J. (at ATD 22; CLR 204) pointed out:

``It would be a departure from the legislative policy, if, in proceedings to recover additional tax, the questions what tax was properly payable, whether receipts


ATC 4392

omitted from the return are assessable and whether deductions included are allowable, were not concluded by the existence of a standing assessment but were left for determination as issues of fact upon a trial at law... Further, some notification must be given to the taxpayer of the existence and the amount of his liability under s. 67. The Commissioner must formulate a claim to additional tax and must make a preliminary determination of these matters as well as consider remitting the liability. Except the process of making, amending and notifying assessments, no method is indicated by the Act in which such a determination or claim should be expressed or communicated. That process and the subsequent proceedings upon objection provide the Commissioner with a convenient method and an appropriate occasion for determining whether the section applies to the case, and, if so, how he will exercise the discretions which it reposes in him, and for recording and communicating the result in a formal manner.''

Much of this is applicable to the present problem. In Richardson the High Court felt able to conclude, despite the absence of express provision for challenging a liability under s. 67 by way of objection, review and appeal, and despite an earlier dictum of Dixon J. suggesting the contrary (in
The King v. FC of T; Ex parte Sir Kelso King (1930) 43 CLR 569 at 580), that the better interpretation of the statute did involve the availability of the review procedure. Evatt J. (at ATD 30; CLR 215) declared: ``The result is both just and convenient, and I think that the Act secures that result''.

The sections with which we are concerned contain express provision for review. Upon being ``notified of a decision of the Commissioner'' not to remit or to remit only in part, a person may (under s. 221U) lodge an objection. To that objection, the provisions for review of assessments of tax are expressly made applicable by s. 221U(2). Those provisions include ss. 186 and 187, requiring the Commissioner to consider an objection and notify ``his decision'', upon which a ``taxpayer'' (this must be read so as to include an objector under s. 221U), if dissatisfied with the decision, may ``require [the Commissioner] to refer the decision to the Tribunal'' or to refer it to a specified court. A key provision is s. 189 which requires the Commissioner to comply with the request for referral and, by subs. (2), provides:

``The referral of a decision on an objection to the Tribunal shall, for the purposes of the Administrative Appeals Tribunal Act 1975, be deemed to constitute the making by the taxpayer of an application to the Tribunal for review of the decision.''

In the context of ss. 186 and 187, ``the decision'' referred to in s. 189(2) must be the decision of the Commissioner upon the objection. Plainly, the intention of s. 189(2) is to ensure that the Tribunal will have, when it reviews that decision, all the powers and authority which would be attracted to it were the matter to come before it by way of an application by the objector for review of the decision upon the objection.

The first thing the decision maker would have to decide, when looking at the present objection, would be whether those circumstances existed which are contemplated by s. 221EAA. For unless those circumstances did exist, no question of remission could arise; there would be nothing to remit. It follows that the first thing the Administrative Appeals Tribunal would have to do, when reviewing on the merits the decision made upon the objection, which asserted the application of s. 221EAA and, indeed, purported to remit part of the penalty involved in its application, would be to determine whether the circumstances did attract the penalty. (Cf. the analysis by Brennan J. of what was involved in
Re Becker and Minister for Immigration and Ethnic Affairs (1977) 15 ALR 696 at 699.) In so far as the liability to the penalty was a precondition of any consideration of remission of it; a determination of that question was necessarily before the Tribunal. That a finding of liability would be a conclusion of law upon the true construction of the statute, once the facts were ascertained, made no difference.
Collector of Customs (NSW) v. Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 at 315, 317;
Duncan v. Defence Force Retirement and Death Benefits Authority and Commonwealth of Australia (1980) 30 ALR 165 at 169-170.

Of course, in substance the decision upon the objection, which the Tribunal was reviewing, did more than merely determine the theoretical


ATC 4393

application of s. 221EAA as a step towards deciding the issue of remission; it confirmed, to use the word by which the Commissioner not inaptly described the position, that a penalty had been correctly ``imposed''. As a consequence, it effectively amounted to a decision that recovery proceedings would be taken in default of compliance with the notice, and it opened the way to the creation of a certificate under s. 221R(2) which would operate as prima facie evidence that the amount of the penalty was in actual fact due. In those circumstances, the decision rejecting the objection had a practical effect similar to that which Brennan, Keely and Lockhart JJ. in Duncan (at 169-170) considered sufficient to amount to a decision within the meaning of the Administrative Appeals Tribunal Act. Just as the decision there under review was held to have been made ``in fulfilment of [a] function of administering [the legislation there in question]'', so here, the Commissioner's decision was made in fulfilment of his function of administering the Act. In our opinion, it was within the authority of the Administrative Appeals Tribunal to render a decision upon the question which the appellant sought to raise. We turn to that question.

The foundation of the appellant's argument is the language by which the penalty is imposed upon an employer. The key words are ``where an employer... fails, at the time of paying salary or wages to an employee, to deduct from the salary or wages the amount required to be deducted...'' (emphasis added). This language reflects the terms of subss. (1) and (1A) of s. 221C which use the words ``payments'' and ``pays''. The question is whether the requirement of a payment can be satisfied by a mere journal entry.

In
Re Associated Electronic Services Pty Ltd (In Voluntary Liquidation) (1965) Qd. R. 36, the decision of the Full Court of the Supreme Court of Queensland (Jeffriess, Gibbs and Lucas JJ.) was delivered by Gibbs J. (as he then was). The circumstances were that both of the two directors and shareholders of a company had agreed upon the declaration of a dividend and, as his Honour said at 38, ``that they would not draw in cash the amounts to which they would respectively be entitled on the declaration of the dividend, but would consider the monies as loaned to the company''. The company's accountant was informed that they:

``desired that their dividends be not paid to them in cash, but be loaned by them to the company, and requested the accountant to make the necessary entries in the company's books of account. The accountant accordingly debited the dividend... to the profit and loss appropriation account, and credited [an amount] to a loan account in the name of the appellant...''

The amount was never paid in cash to the appellant. Gibbs J. (at 41-42) said:

``The mere act of making the entries in the company's books, to debit the amount of the dividend to the profit and loss appropriation account and credit that amount to the appellant's loan account, did not increase the appellant's assets or diminish his liabilities. The appellant received nothing that was equivalent to payment.

...

The true result of what occurred therefore is that the parties did not agree that the dividend be paid in some mode other than in cash - they agreed that it be not paid until requested - and the company's liability to pay the dividend was not discharged by payment, accord and satisfaction, or otherwise.''

In
Whim Creek Consolidation NL v. FC of T 77 ATC 4503; (1977) 17 ALR 421 a debit to an advance account in the books of a company was held to be a payment. But the reason for that holding, as appears from the joint judgment of the full Federal Court at ATC 4509-4510; ALR 429, was that it was expressly found that ``there was an agreed set-off'' of the sum in question. As Mason J. said in
Brookton Co-operative Society Limited v. FC of T 81 ATC 4346 at 4354; (1980-1981) 147 CLR 441 at 455:

``Payment of a dividend may occur in a variety of ways not involving payment in cash or by bill of exchange, as, for example, by an agreed set-off, account stated or an agreement which acknowledges that the amount of the dividend is to be lent by the shareholder to the company and is to be repaid to the shareholder in accordance with the terms of that agreement. It is, however, well settled that the making of a mere entry in the books of a company without the assent of the shareholder does not establish a payment to the shareholder


ATC 4394

(
Manzi & Ors. v. Smith & Anor. [(1975) 132 CLR 671 at p. 674]).''

This portion of his Honour's judgment was agreed in by all other members of the court. The passage in Manzi v. Smith to which Mason J. referred as authority for the proposition stated by him appears in the judgment of Barwick C.J. In the judgment of Jacobs J. in that case (at 675), there is the following passage:

``The entries made through the journal and the books of the company did nothing except alter the manner in which the internal accounts of the company were expressed... On the one hand there was no agreement at the time of the various dealings or subsequently that only the balance on accounts should be owed from day to day; on the other hand there was no agreement that by the alterations in the expression of the accounts... there should be any alteration in legal rights.''

A similar view of book entries was taken by a Full Court of this court in
FC of T v. P. Iori & Sons Pty Limited 87 ATC 4775, where Beaumont J. (at 4788-4789) said:

``It is accepted by the respondent, correctly I think, that a payment could be established only if the journal entries relied upon were underpinned by a valid agreement to the effect that payment of its contributions be accepted by the trustees in a form other than by actual cash or by cheque... But, in my view, there was no valid agreement made in the present case. It is hardly necessary to add that it is not enough for the respondent to demonstrate its intention to make contributions to the fund. The respondent must go further and establish an actual agreement to the relevant effect: in a revenue context and otherwise, `the intention of a man cannot be considered as determining what it is that his acts amount to' (per Lord Buckmaster in
J. & R. O'Kane v. I.R. Commrs (1920) 12 T.C. 303 at p. 347).''

Lockhart J. (at 4783) agreed with this judgment. See also
Re Harry Simpson & Co Pty Ltd and the Companies Act (1963) 81 WN (Pt. 1) (NSW) 207 at 208-209, and on appeal, Re Harry Simpson & Co Pty Ltd (in liquidation) (1966) 84 WN (Pt. 1) (NSW) 455 at 459 where it was made clear that the appeal was allowed only on the basis of fresh evidence demonstrating an agreement;
East Finchley Pty Limited v. FC of T 89 ATC 5280;
Lend Lease Corporation Ltd v. FC of T 90 ATC 4401 at 4405 et seq. Against these authorities, the decision of Walton J. in
Garforth (Inspector of Taxes) v. Newsmith Stainless Ltd (1979) 2 All ER 73 cannot prevail in this court. In any case, it should not be overlooked that Walton J. was concerned with a section which referred to a ``payment of, or on account of, any income'', not, as s. 221EAA does, to a payment ``to an employee''.

If the law laid down in the Australian cases is applied to the facts of this case as agreed between the parties, only one answer is possible. It was agreed that ``the only evidence of.... `a payment' is the journal entries in question and there is no evidence elsewhere by Minute of the Company nor actual or implied agreement that salary and wages were to be paid by journal entry''. The agreed statement was not made per incuriam, for the earlier s. 37(1)(a) statement had made it clear that the Commissioner intended to submit to the Administrative Appeals Tribunal, as the relevant area of dispute, the question ``whether an amount credited by journal entry to the name of a director in the books of the taxpayer [sic - scilicet the appellant] represents a payment...'', and the relevant findings in that statement were limited to what was revealed by the records of the loan accounts. Furthermore, the reason put forward in the same statement for the decision was that remuneration credited by a journal entry constituted a payment. There was, therefore, nothing but the existence of the journal entries to establish a payment. In the words of Dixon J. in
FC of T v. Steeves Agnew & Company (Victoria) Proprietary Limited (1951) 9 ATD 259 at 267; (1951) 82 CLR 408 at 422:

``There was no definite transaction after the remuneration was ascertained amounting to payment and as such affording a specific occasion for the making of the deductions at the rates prescribed.''

Despite the terms of the agreed facts, the learned trial judge held that it ``was open to the Tribunal to conclude that the means of payment had been agreed upon''. The reasons given by the Tribunal are actually somewhat equivocal, but it does not appear from them that the


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Tribunal found there to have been an agreement, of the kind referred to in the cases, underpinning the journal entries. Rather, the Tribunal, required by the agreed facts to eschew such a basis of decision and invited by the Commissioner to rely upon the journal entries, accepted the credits to the loan accounts as sufficient. In doing so, it seems to have been fortified to some extent by the directors' acknowledgment that they had returned the directors' fees and bonuses as income in their own income tax returns for the relevant year. But s. 19 of the Act provides that:

``Income or money shall be deemed to have been derived by a person although it is not actually paid over to him but is reinvested, accumulated, capitalized, carried to any reserve, sinking fund or insurance fund however designated, or otherwise dealt with on his behalf or as he directs.''

(emphasis added)

Having regard to the terms of s. 19, and although the decision of Gibbs J. in
Brent v. FC of T 71 ATC 4195; (1971) 125 CLR 418 suggests the section may have had but limited application in the circumstances of this case, it could not be said that an acknowledgment of the derivation of income within the meaning of the Act by a director involved any admission that a payment had been made to him, even if a director's admission in relation to his own affairs could bind the appellant.

For the avoidance of any possible misunderstanding, we reiterate that the case turns on the agreed statement of facts, which includes the addendum. That statement seems to have been agreed with the deliberate intention of testing the question whether a mere journal entry, unsupported by any agreement, is enough to constitute a payment of salary or wages for the purposes of s. 221EAA. This appeal, therefore, is not the occasion for any discussion of the inferences that might be drawn in a case in which it was open to infer some form of agreement concerning the effect to be given to journal entries.

It is unnecessary to discuss in detail a further difficulty in the Commissioner's case which was touched upon in argument. Paragraph (2) of the letter from the Australian Government Solicitor, which formed the basis of the agreed statement of facts, recorded that the amounts in question ``have been credited to the Directors of the company by way of journal entries as at 30 June of the year in question''. The expression ``as at 30 June'' is not equivalent to ``on or before 30 June'', and the past perfect tense, ``have been credited'', emphasizes the point - the letter did not say ``had been''. Although, at one stage in its discussion of the problem, the Tribunal assumed that the agreed facts referred to journal entries made ``on or before 30 June 1986'', in its findings it recorded: ``[A]t some time unspecified, a journal entry was prepared in the books of account of the company to give effect to the resolution [of directors]''. There was no evidence to justify the assumption as to the period within which this was done.

The crux of this appeal is the Commissioner's contention that ``an amount credited by journal entry to the name of a director in the books of the [company] represents a payment'' and the agreed fact that ``the only evidence of a... `payment' is the journal entries in question''. Since the authorities make it plain that entries of this kind, standing alone, do not constitute a payment, the appeal must be allowed. The appellant must succeed, as a matter of law. So there is no point in remitting the case to the Tribunal. The decision of the primary Judge should be set aside. The decision of the Administrative Appeals Tribunal should also be set aside and, in lieu thereof, it should be ordered that the appellant's objection be upheld. The Commissioner must pay the appellant's costs of the proceeding before the primary Judge and of this appeal.

THE COURT ORDERS THAT:

1. The appeal be allowed and the decision of the primary Judge be set aside.

2. The decision of the Administrative Appeals Tribunal be set aside and, in lieu thereof, the appellant's objection be upheld.

3. The respondent pay the appellant's costs of the appeal and of the proceeding at first instance.


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