Bailey & Others v. Federal Commissioner of Taxation.

Members: Barwick CJ
Gibbs J

Mason J

Jacobs J
Aickin J

Tribunal:
Full High Court

Decision date: Judgment handed down 4 March 1977.

Mason J.: In my opinion the appeal should be allowed and the Commissioner should be ordered to provide particulars of the basis of the assessments, including the more detailed particulars set forth in the reasons for judgment prepared by Aickin J. Except as to one aspect of the case I do not wish to add to the reasons given by Aickin J. for this conclusion.

During the course of argument it was submitted that the Commissioner should be accorded some special immunity from particulars on the ground that to expose him to an order for particulars would in some undefined way prejudice or inhibit the collection of the revenue. It was suggested that public-spirited citizens who have hitherto zealously reported to the Commissioner instances of tax evasion by their fellow citizens would henceforth maintain a stern silence if the shroud of secrecy presently cloaking their communications is swept aside by an obligation imposed upon the Commissioner to give particulars. The suggestion is completely misconceived. An order for particulars does no more than require the Commissioner to furnish in advance of the hearing particulars of the case which he intends to present in court. Such an order does not require the Commissioner to disclose the evidence by which he proposes to support his case or the source of information which comes into his possession. As it is the function of particulars to indicate the nature of the case to be presented at the hearing, they cannot involve the Commissioner in the disclosure of


ATC 4100

information which would not be revealed in court at the hearing itself.

There is therefore no foundation for the notion that the Commissioner stands apart from ordinary litigants in some special position in relation to the giving of particulars. Like any other litigant he may be ordered to give particulars in an appropriate case, that is, when they are required so that the other party to the litigation, and for that matter the court itself, may be acquainted with the nature of the case that is intended to be presented, so that the issues to be determined may be defined. To conclude otherwise would result not merely in injustice to the taxpayer, who will remain in doubt as to the Commissioner's case until it is presented at the hearing, but also in unnecessary preparations and in a hearing of unnecessary length as the taxpayer endeavours to deal with matters on which, as it may subsequently transpire, the Commissioner is placing no reliance whatsoever.

To this it is not an answer to say that all the relevant facts are within the knowledge of the taxpayer. Although, speaking generally, the taxpayer knows or should know the facts relevant to a correct assessment of his income, there are other facts which will be relevant on the hearing of an appeal. Under sec. 190 the taxpayer bears the onus of showing that the Commissioner's assessment is excessive. Consequently the relevant facts in the appeal include the view of the facts on which the Commissioner has based his assessment, the manner in which he has arrived at his assessment. These facts are not within the knowledge of the taxpayer; they are within the knowledge of the Commissioner.

Indeed, there is very much to be said for the view that fairness to the taxpayer demands that the Commissioner should be compelled to give particulars of his assessment when it issues so that the taxpayer is adequately informed as to the manner in which the assessment has been arrived at and may then determine whether he will object to the assessment and subsequently appeal. But that is a matter for the legislature. It goes quite beyond the scope of this case where we are concerned with the giving of particulars in litigation after an appeal has been instituted.


 

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