Case K67

Judges: HP Stevens Ch

CF Fairleigh QC
JR Harrowell M

Court:
No. 1 Board of Review

Judgment date: 23 November 1978.

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C.F. Fairleigh Q.C. (Member): The taxpayer, a permanent public servant, was entitled to a period of long service leave as well as annual recreation leave. She made written applications for five months furlough from 16 May 1977 to 14 October 1977 and then for a further month furlough (half pay) and also for recreation leave. The applications indicate an intention to spend the time overseas and there is a note: Please pay at least 4 weeks beforehand to enable me to pick up my air tickets. The application was granted with part (16 May 1977 to 14 October 1977) on full pay, part (17 October 1977 to 16 November 1977) on half pay and recreation leave (17 November 1977 to 2 February 1978) on full pay. On 15 April 1977 the taxpayer received a lump sum payment from the Department representing a prepayment of salary for the period of leave 16 May 1977 to and including 2 February 1978.

2. The taxpayer's group certificate for the year ended 30 June 1977 included the whole of the amount which had been paid to the taxpayer (i.e., credited to her bank account) pursuant to her application. It appears that there was a misunderstanding both by the taxpayer and by the personnel officer as to the taxation consequences of payment being made wholly in the year ended 30 June 1977 rather than partly in that year and partly in the next year.

3. The taxpayer's return of income for the year ended 30 June 1977 inevitably conformed with the group certificate and the notice of assessment similarly. The taxpayer objected to the assessment and the Commissioner decided to disallow the objection. That decision was referred to a Board for review.

4. It is clear beyond discussion that the assessment has been made in accordance with law. The decision on the objection must be upheld and the assessment must be confirmed.