Carmody v F C Lovelock Pty Ltd

123 CLR 1

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(Judgment by: MENZIES J)

Carmody
v F C Lovelock Pty Ltd

Court:

Judges: Barwick CJ
McTiernan J
Menzies J
Windeyer J
Owen J
Walsh J
Gibbs J

Subject References:
Taxation and revenue
Customs
Dumping duty
Validity

Legislative References:
Constitution (Cth) - Section 55,; Section 90.
Judiciary Act 1903 (Cth) - Section 40A
Customs Act 1901 (Cth) - The Act
Customs TAriff (Dumping and Subsidies) Act 1961 - Section 7

Judgment date: 9 October 1970

SYDNEY 4 August 1970; 5 August 1970; 6 August 1970; MELBOURNE 9 October 1970;

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Judgment by:
MENZIES J

In this action the Comptroller-General of Customs seeks to recover $18,195.23 as duty payable under s. 7 (2) of the Customs Tariff (Dumping and Subsidies) Act 1961, which I shall call "the Act".

The action was commenced in the Supreme Court of New South Wales and has been removed to this Court on the footing that, before the Supreme Court of New South Wales, an inter se question had arisen. Having regard to the possibility that this Court might decide that such a question had not arisen, a conditional application was made by the defendant, under s. 40 of the Judiciary Act, that an order removing the proceedings from the Supreme Court to this Court be made. After consideration, I have reached the conclusion that one of the questions raised here, namely whether a particular tax is a duty of customs, or some different tax not being a duty of excise, is a question as to the limits of the constitutional power of the Commonwealth and thus of the States. A determination that the tax is a duty of customs would, of course, limit the powers of the States and so determine the line between State power and Commonwealth exclusive power: Dennis Hotels Pty Ltd v Victoria ^[F1] . To decide that a matter is within the exclusive legislative power of the Commonwealth is also to decide that the States have no legislative power with respect to that matter. Such a decision is therefore of a question inter se and this matter is properly before this Court.

The defendant has demurred to an amended declaration alleging: (1) that the Minister had duly caused to be published in the Government Gazette of 21st May 1964 a notice under s. 7 of the Act called the "Dumping and Subsidies Notice No. 21" to have effect in relation to fluoro carbons entered for home consumption on or after 30th April 1962; (2) that the defendant, on and after 30th April 1962, imported fluoro carbons into Australia and caused the same to be entered for home consumption; and (3) that the export price of such goods, within the meaning of the Act, was less than the normal value of the said goods within the meaning of the said Act at the date of the exportation thereof. The defendant also pleaded, and to its pleas the plaintiff has demurred. As the case was argued in this Court it is possible to consider both demurrers together.

The defendant's principal contention in support of its own demurrer, and to oppose the plaintiff's demurrer, was (1) that, by reason of the notice having been made to apply to goods entered for home consumption on and after a date more than two years before the notice was published-a period within which the goods imported had entered into home consumption and some at least had ceased to exist-the tax which the plaintiff is seeking to recover is not a duty of customs; and (2), because the Act does impose other taxes which are duties of customs, there has been an infringement of s. 55 of the Constitution which requires that "laws imposing duties of customs shall deal with duties of customs only". Accordingly, it was claimed that the Act is invalid and the claim thereunder must fail.

The question at issue really narrows down to this, "Is a tax upon the importation of goods, which have been delivered for home consumption and been consumed before liability to pay is imposed, a duty of customs?" The phrase "delivered for home consumption" derives from s. 30 of the Customs Act 1901-1960, which I shall call "the Customs Act", which enacts, inter alia, that imported goods shall be subject to the control of customs "from the time of importation until delivery for home consumption" and the defendant's argument is, in substance, that any tax imposed after "delivery for home consumption", even if it be imposed by reference to the importation of the goods at an earlier date, falls outside the kind of tax which, in the Constitution, is referred to as "duties of customs".

In the course of argument the provisions of the Customs Act were closely examined, but, in my opinion, these provisions cannot provide an answer to the question before the Court. This question is a constitutional question and cannot be determined by reference to laws made under constitutional power. It cannot be assumed that, by an Act subjecting particular goods only to the control of customs, Parliament has exhausted its constitutional power to impose duties of customs and that that power cannot be exercised with respect to imported goods which, according to the provisions of the Customs Act, are not subject to the control of customs.

A duty of customs is essentially a tax upon the importation of goods. It may be that a customs duty can be imposed by reference to some dealing with the goods subsequently to their importation (vide the second paragraph of s. 92 of the Constitution) but the imposition of such a tax may, upon one view which has been expressed in relation to duties of excise, give rise to the question whether the tax so imposed is a duty of customs or a duty of excise, for the Constitution distinguishes sharply between duties of customs and duties of excise: s. 55. However this may be, it seems to me that a tax which is imposed upon the importation of goods, even if that importation occurred at a date before the imposition of the tax, falls squarely within the description "duties of customs" and it matters not what has happened to the goods in the time between their importation and the imposition of the tax.

In my opinion the principal contention of the defendant fails.

It was also contended on behalf of the defendant that, neither at the date of the publication of the notice nor at any time thereafter, was it the owner of goods within the meaning of the Customs Act. The point of this contention is that s. 153 of the Customs Act makes customs duties payable by the owner and that the Act does not, of itself, provide for the payment of the duties which it imposes; it simply incorporates the Customs Act. However, the word "owner" in s. 153 includes "importer" and what is alleged is that the defendant imported the goods in question. Whether or not it was the owner, in the strict sense, is immaterial.

The defendant also relied upon s. 165 of the Customs Act. This is not a case where the defendant was short levied when duty was paid upon the entry of the goods into Australia. At that time, as then imposed, it was paid in full. The duty now claimed, although claimed in respect of the earlier import of the goods, was not imposed until the notice was published. Section 165, therefore, affords the defendant no answer.

I am prepared to assume that the Minister could not give a notice taking effect with respect to goods entered for home consumption before the publication of the notice without express statutory authority so to do. That authority is, however, to be found in s. 16 of the Act, whereby it is provided, inter alia, that:

"The powers given by this Act to the Minister to cause notices to be published specifying goods extend to the publication of notices specifying-

. . .

(f) goods entered for home consumption before the date of publication of the notice as well as goods entered for home consumption on or after that date."

As an addition to their constitutional argument, counsel for the defendant sought to read s. 16 (f) down so that it would apply only to goods not delivered for home consumption at the time of the notice but I have found no basis for so restricting the application of the provision. There is nothing whatever in the Act to require such a limited construction of s. 16 (f) and, once it has been determined that a tax upon a previous importation of goods is within the customs power, there is no ground for reading down provisions in accordance with the Acts Interpretation Act.

Finally, neither the other provisions of the Act nor the provisions of the Customs Act which are incorporated into the Act, require any limitation upon the ordinary construction of ss. 7 and 16 or either of those sections of the Act.

Accordingly, in my opinion the demurrer of the plaintiff should be allowed and the demurrer of the defendant overruled.