Adams v Cleeve [1935] HCA 12

High Court of Australia|1935-07-01|Before: Evatt JJ

re as to locality, subject-matter, e, be invested with federal

Avoidance of tax - Court of summary jurisdiction - Authority to prosecute ent of excess over £500 - Authority to abandon excess - Judiciary 1903-1933 (No. 6 of 1903 - No. 65 of 1933), sec. 39 (2) (b)* - Sales Tax Act (No. 1) 1930-1932 (No.

ON APPEAL FROM A COURT OF PETTY SESSIONS OF VICTORIA,

"Hel that sec. 58 of the Sales Tax Assessment Act (No. 1) did not take away right of appeal to the High Court given by sec. 39 of the Judiciary Act 08-1983, and that accordingly the appeal was brought as of right.

conferred upon it, except as provided in the last preceding section, and subject to the following conditions and restric- tions: . . . (b) Wherever an appeal lies from a decision of any Court or Judge of a State to the Supreme Court of the State, an appeal from the de- cision may be brought to the High Court."

'The information recited that the defendant had incurred a pecuniary penalty exceeding £500, but the excess over and above the sum of £500 was thereby abandoned. 'The authority to prosecute did not in express words authori

was necessary to bring the case within summary jurisdietion.

Held that the production of the authority to prosecute did not nevessa operate to show that except for the written authority the prosecution conducted without the full cognizance and approval of the Deputy Com missioner of Taxation, and whether the formal authority was or was not enough to include the abandonment of the excess penalty, the presumption created by sec. 55 (1) of the Act, that the prosecution was instituted by authority of the Deputy Commissioner, had not been rebutted.

Apprat, by way of order to review, from a Court of Petty Sessior of Victoria.

laid two informations against Percy Cleeve. One of the information: was substantially in the following form: - The information Reginald Robert Kedge of Melbourne in the State of Victoria, a

1930-1932 for and on behalf of Joseph Adams, Deputy Federal Commissioner of Taxation, who saith that the defendant

The Sales Tax Assessment Act of Summary Jurisdiction." (No. 1) 1930-1932, sec. 49, provides : - provides: ** Where any taxation prose

"Any person who, by any wilful act, default or neglect, or by any fraud, art or contrivance whatever, avoids or attempts to avoid tax chargeable under this Act, shall be guilty of an offence. Penalty: Not less than fifty pounds nor more than five hundred pounds and in addition treble the amount of tax payment whereof he has avoided or attempted to avoid." Sec. 54 provid 'Taxation prosecutions may be instituted in the name of the Commissioner by action, information or other appropriate proceeding

and when the prosecution is for a pecuniary penalty not exceeding £500 or the excess is abandoned, the taxation prosecution may be instituted in the name of the Commissioner or a deputy commissioner - (c) in a County Court, District Court, Local Court or Court

cution has been instituted by an offio in the name of the Commissioner | Deputy Commissioner the prose shall, in the absence of evidence to #] contrary, be deemed to have instituted by the authority of the Co missioner or the Deputy Commissi as the case may be." Sec. vides: "Subject to this Act provisions of the law relating to sum mary proceedings before Justices i force in the State where the proceeding are instituted shall apply to all taxa prosecutions before a Court of Summ Jurisdiction in that State and appeal shall lie from any convietion order of dismissal to the Court, in the manner, provided by the of the State where such a convi or order is made for appeals from ¢0 victions or orders of dismissal."

ndant on or about 23rd December 1932 to the informant wilfully ow that for that month the aggregate amount for which taxable were sold in respect of which sales tax was payable was '7s, 2d. whereas the aggregate amount for which taxable goods re sold and in respect of which sales tax was payable was in fact in excess of £799 17s. 2d. whereby the defendant has incurred pecuniary penalty exceeding £500, but the excess over and above um of £500 is hereby abandoned. The information was signed R. R. Kedge, for and on behalf of Joseph Adams, Deputy sioner of Taxation, Another information in similar terms against Parkside Shoe Co. Pty. Ltd. in respect of the same The other information against Percy Cleeve and that the company were in respect of omissions to make returns and of sales tax for the month of August 1932. The facts ich are relevant to this appeal sufficiently appear in the judgments High Court below. police magistrate convicted the company on each of the two tions laid against it, and dismissed both the informations laid nst Perey Cleeve.

informant obtained an order nisi to review the orders of the Magistrate dismissing the informations against Perey Cleeve, e order nisi was made returnable before the Full Court.

for the respondent, on a preliminary objection. This was cution under the Sales Tax Assessment Act (No. 1), and the ht of appeal is that granted by that Act. Sec. 58 of that Act es that the local law shall apply and an appeal lies accordingly. there should have been an order to review to the Supreme 'an appeal to General Sessions. Sec. 68 of the Judiciary Act ve of the power as to appeals from summary jurisdiction by sec. 39. The Sales Tax Assessment Act (No. 1), sec. 54. the Judiciary Act, confers jurisdiction on the police court. see, 39 (2) of the Judiciary Act does not apply.

n of sales tax for the month of July 1932 furnished by the #- ©.

Dean. The case falls within sec. 39 (2) (b) of the Judiciary A The provisions in the Sales Tax Assessment Act are supplementai not exclusive. He referred to the Justices Act 1928 (Vict.), sec. I On the facts there should have been a conviction (Bazter v. Ah W

and secondly, there was not sufficient evidence to warrant a convi tion of the present respondent. The only sales taxable under tl Act are sales by the manufacturer to a person without a certific (see. 11). The informant should have proved that these were sal under which the company would have been charged sales tax the Sales Tax Assessment Act (No.1). The informant would have hi to prove that informant was a manufacturer, but this was not don There is no evidence that in relation to these concealed sales tax ¥ payable by the company at all. There was no concealment by Ch of any matters relating to the subject matter of these charges. was no proof that these sales were taxable, nor is there any evid to implicate Cleeve in the transaction. There was no proper aut to lay the information. Sec. 55 of the Sales Tax Assessment provides either that there should be a specific authority, or, if tl is not so, and a general authority may be given, that prodi this case was not sufficient to justify the prosecution. Sec. 55 ( when read with sec. 55 (1), indicates that some specific author is required in each case. Hyen if there may be a general authorit this authority is bad, because this case was not triable in a of Petty Sessions unless the excess over £500 was abandoned. authority to bring the prosecution does not authorize the officer abandon the excess made up of the penal tax and so bring tl matter within the jurisdiction of the Court. There is nothing show that that abandonment was done with authority.

Dean, in reply, referred to the Justices Act 1928 (Vict.), sec. 2

e following written judgments were delivered : - Drxon anv Evarr JJ. This appeal is brought by the y Commissioner of Taxation from an order of the Court of Petty Sessions dismissing an information against the respondent for an offence against sec. 49 of the Sales Tax Assessment Act (No. 1) 1932, and sec. 5 of the Crimes Act 1914-1932. Sec. 5 of the Act provides that any person who aids, abets, counsels or or by act or omission is in any way directly or indirectly ly concerned in or party to the commission of any offence it any law of the Commonwealth, whether passed before or the commencement of the Act, shall be deemed to have itted that offence and shall be punishable accordingly. Sec. the Sales Tax Assessment Act (No. 1) provides that any person 10 by any wilful act, default or neglect or by any fraud, art or vance whatever avoids or attempts to avoid tax chargeable r the Act shall be guilty of an offence. The appeal has been N as of right as under sec. 39 (2) (b) of the Judiciary Act 03-1933. This paragraph states one of the conditions subject to hich Federal jurisdiction is conferred by sub-sec. 2. It provides wherever an appeal lies from the decision of any Court or of a State to the Supreme Court of the State, an appeal from n may be brought to the High Court. The respondent sed the objection that no appeal from a decision given by a Court etty Sessions in a taxation prosecution under the Sales Tax Act (No. 1) lies as of right to this Court, but only by leave. This objection is based primarily upon the provisions . 58 of the Act, which provides that, in all taxation prosecutions court of summary jurisdiction in a State, the provisions of : in force in the State relating to summary proceedings before es shall apply, and an appeal shall lie in the manner and to the rt provided by the law of the State for appeals from convictions s of dismissal. It is said that by reason of this special sec. 39 of the Judiciary Act does not apply. The argument sec. 58 confers the jurisdiction upon the Court of summary , either of its own force, or with the aid of sec. 54 (c), | that the right of appeal given by sec. 39 (2) (b) of the Judiciary t applies only to the exercise of Federal jurisdiction conferred by

H.C. or A. see, 39 itself. The fact that sec. 58 of the Sales Tax Assessment /

(No. 1) expressly gives a right of appeal to State Courts is also reli upon. An additional argument was advanced, based upon sec. 68 of the Judiciary Act, which provides that the several Courts State exercising jurisdiction with respect to the summary convi of offenders or persons charged with offences against the laws the State and with respect to the hearing and determination appeals arising out of any such . . . conviction shall have like jurisdiction with respect to persons who are charged with offen against the laws of the Commonwealth. This statement of

provision omits all but the words upon which the argument is bi The whole section has recently been examined in this Cor another purpose, and its history has been discussed (see Willia v. The King [No. 1] (1); Williams v. The King [No. (2)). On the full terms of the section and its hi: there is something to be said for the view that the expre "appeals arising out of any such . . . conviction" only to trials upon indictment. But for the purposes of this is unnecessary to consider whether the assumption made the argument that it related also to appeals from summary co: is well founded. For neither the provisions of sec. 58 of the s Tax Assessment Act (No. 1) nor those of sec. 68 of the Judici appear to indicate any intention of excluding the operation of of the Judiciary Act. Among the purposes of sec. 39 are the e of State jurisdiction and the substitution of Federal j subject to provisions relating to appeals from the Courts of the to the Privy Council and to this Court and in the case of s jurisdiction relating to the constitution of the Court. Sec.

application accords with the principles upon which the e proceeds. To exclude its operation upon any part of Pet jurisdiction, more is required than a special provision confe of the jurisdiction, either original or appellate, which sec. 3 confers. If the special provision conferred a different authori imposed conditions or restrictions or otherwise disclosed an i at variance with the full operation of sec. 39, an intention to @

that secs. 72-77 of the Judiciary Act, which contain a code of ocedure for an appeal by way of case stated upon a point of law d at the trial of an indictable offence, showed an intention nsistent with an application of sec. 39 (2) which would give jurisdiction over Federal offences to State Courts of Criminal Appeal. inconsistency is involved in the present case between sec. 39 the two provisions relied upon. Accordingly the appeal was y brought as of right. facts of the case may be shortly stated. The respondent was of a company the business of which was boot manufacturing. wife and two daughters were directors. One of his daughters | public officer of the company, and she drew up and signed the ns for sales tax. An investigation by taxation officers showed the returns agreed with the entries of the company's books of count. Nevertheless, transactions had taken place with four s of the company which did not appear in the books or the The company had sold goods of considerable value to customers, who held invoices and receipts with respect to the les. Although no trace of these transactions appeared in the books, ice book was missing which may have contained counterfoils invoices. The respondent was required to attend at the

journal, and that he also had evidence of other sales not in the sales journal which were not covered by invoices d for by open cheque. The respondent said : - * You for me, you have got me. I had to do something to

e s to keep the wheels moving." In answer to questions 0 what sales he had made for cash without invoices, he named » of the customers from whom the invoices and receipts had obtained by the taxation officers. He said that he had sold ; £3,000 worth of goods for cash without invoices, and that he o record whatever made in this manner; that he had traded is way because he had stocks on hand and no money to pay and his only means of getting money was to sell the goods

might be inferred. In Seaegy vy. The King (1) the Court took the H. 0. or A.

'or A. free of sales tax. Upon a second visit to the taxation office, h

said that his wife and one of his daughters who were directors to no active part in the company's affairs, that he constantly worked in the factory himself, and that it was practically his business, | respect of two monthly returns informations were laid under see. 49 of the Sales Tax Assessment Act (No. 1) against the company . against the respondent. The charges were in each case that defendant did by a wilful act avoid tax in that the defendant in a return of sales and of sales tax wilfully show that the aggreg amount for which taxable goods were sold was less than the a1 for which such taxable goods were in fact sold. The magisti convicted the company but dismissed the informations against # respondent upon the ground that there was no sufficient evidence warrant a conviction. His view appears to have been that

was nothing to connect the respondent with the actual preparation of the returns. This view of the evidence cannot be supported. is true that the admissions made by the respondent directly to transactions in which no invoices were given, whereas the info1 tions were based upon transactions in which invoices were but records of the sales excluded from the company's books at returns. But the admissions afford abundant evidence that in th course of business adopted his was the guiding hand and his was th guilty mind. His daughter who made out the returns may or m not have been cognizant of their incorrectness, but there is at lea: prima facie evidence that she made them up as an intended con quence of his actions in selling free of sales tax and supp) g concealing records of the transactions. This would amount procuring or by act or omission being knowingly concerned in th commission of the offence. It was suggested that there was ! evidence that the purchasers did not quote their certificates an thus relieve the company of responsibility for sales tax. This p can scarcely be taken now, because the purchasers were called i Court below for the prosecution, but apparently were give D opportunity of giving evidence upon it. In any case, the a of the respondent and the non-appearance of the transactions in books coupled with the failure to produce any quotation by purchasers of their certificates supplies prima facie evidence. AP

the abandonment of the excess of the pecuniary penalty over £500 which was necessary to bring the case within summary jurisdiction. The production of the authority to prosecute does not necessarily operate to show that except for the written authority the prosecution was conducted without the full cognizance and approval of the Deputy Commissioner. Indeed, all the probabilities are to the contrary. Whether the formal authority is or is not wide enough to include the abandonment of the excess penalty, the presumption created by sec. 55 (1) of the Act, that the prosecution was instituted by the authority of the Deputy Commissioner, has not been rebutted.

For these reasons the appeal should be allowed, the order nisi made absolute with costs,-and the information remitted to the Court of Petty Sessions for rehearing.

Srarke J. The respondent is the manager of a proprietary company known as the Parkside Shoe Co. Pty. Ltd. It is a family business, and is, as the respondent asserted, practically his business. Both the company and the respondent were charged, on separate informations, with avoiding sales tax imposed under the Sales Tax Assessment Acts, for the months of July and August 1982 respectively. There were four informations, two against the _ company and two against the respondent. The charge against the _ respondent in respect of the month of July was that he did contrary to the Sales Tax Assessment Act (No. 1) 1930-1932, sec. 49, by a wilful act avoid tax chargeable under the said Act in that he did _ ina return of sales and of sales tax for the month of July 1932 furnished by him . . . wilfully show that for that month the _ Aggregate amount for which taxable goods were sold in respect of _ which sales tax was payable was £799 17s. 2d., whereas the aggregate amount for which such taxable goods were sold and in respect of which sales tax was payable was in fact a sum in excess of £799 17s. 2d. _ Assimilar charge was made against the respondent in respect of the month of August 1932, and also against the company in respect of both the months of July and August 1932. The company was m8 convicted, and fined £60 in respect of the July charge and £75 in respect of the August charge. But the police magistrate who heard

the informations dismissed the charges against the respondent. He said he was doubtful as to the respondent, but thought there was not sufficient evidence to warrant his conviction. The law would have been amply vindicated, in my opinion, if the matter had been left there. The company - practically, the respon- dent - has been subjected to heavy penalties, in a sum of no less than £135, for its offences. But the Commissioner of Taxation appeals to this Court from the dismissal of the informations against the respondent. The ground of appeal is that on the evidence before the police magistrate the respondent ought to have been convicted. No question of public importance is involved in the appeal, but we have no discretion and must determine the matter according to law. The respondent did not himself furnish the returns, but his daughter Amy Cleeve - the public officer of the company. However, the Crimes Act 1914-1932, sec. 5, provides: '' Any person who aids, abets, counsels, or procures, or by act or omission is in any way directly or indirectly knowingly concerned in, or party to, the commission of any offence against any law of the Commonwealth shall be deemed to have committed that offence and shall

be punishable accordingly." The returns were undoubtedly false, Sales of goods for cash were not returned, and tax was thus avoided. It was not a mistake, for the company under the direction an management of the respondent made these sales without deliveri invoices and without entering the transactions in its books of account. The scheme was devised by the respondent for the purpose of concealing sales and hindering their discovery by the taxing authorities. It is undoubted that the returns concealing the sales were part, and indeed the aim, of the scheme, and that the respondent aided, abetted, counselled and procured the returns which were known to be false. The magistrate's determination therefore cannot be supported. Mr. Coppel, counsel for the respondent, made a gallant attempt to save his client. He contended that an appeal to this Court was incompetent by reason of the provisions of sec. 58 of the Sales Tar Assessment Act (No. 1) 1930-1934. But that section does not 01 or purport to oust, the appeal given to this Court under sec. 39 the Judiciary Act. He also contended that the evidence did

the Commissioner. The information alleged that the respondent _ "has incurred a pecuniary penalty exceeding £500, but the excess over and above the said sum of £500 is hereby abandoned." (See Sales Tax Assessment Act (No. 1), sec. 54.) It was argued that the

3 ~ Commissioner had given a general and not a special authority to prosecute, and in any case had given no authority to abandon any excess over £500. A special authority to prosecute in the particular case is, however, not required by the Act, and a general authority to prosecute in the name of the Commissioner for the recovery of 'penalties under the Sales Tax Assessment Act (No. 1) 1930-1932 is fh The other argument is met by the provisions of sec. 55 (1)

The case must be remitted to the magistrate so that a penalty "may be inflicted upon the respondent of not less than £50, nor more £500, and in addition treble the amount of tax avoided, subject o the abandonment of any excess over £500.

But I protest against the injustice of this double penalty against ctically the same party, the company and the respondent, for entically the same acts. The way of the wrongdoer must not be

the company be recovered, those inflicted on the respondent ld not, as I venture to think, be enforced, or they should be ited by the proper constitutional authority.

costs. Information remitted to the Court of Petty Sessions for rehearing.

establish that the prosecution was instituted by the authority of H.C. or A.

At a glance

Court

Decision date

Before

Source

Judgment (48 paragraphs)