Anderson's Pty Ltd v Victoria

From the earliest times of this Commonwealth it has been plain that the expression "duty of excise" in s. 90 of the Constitution is used in a more precise sense than that of an inland duty and that it refers to the essential nature of the tax, not to the manner of its collection. But the judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. This, in substance, is the formulation of my brother Kitto which received the endorsement of a court of six Justices presided over by the former Chief Justice in Bolton v. Madsen [1] . With great respect, this formulation of the result of what has been decided in this connexion commends itself to me and I am prepared to adopt it as the description of the nature of a duty of excise within the meaning of s. 90. I would merely add expressly what I think is implicit in his Honour's expression, namely that the step which puts the goods into consumption is still in the line, albeit at the end of the line, to which his Honour refers.

During the course of decision which has resulted in this definitive expression, questions as to whether or not the tax under discussion fell into Mill's category of indirect taxes, or whether its amount entered into the price of the commodity have received attention and consideration. No doubt, that the tax should be one which cannot, or is not intended by the legislature to be passed on by the person who is required to pay it, may assist to demonstrate that the tax is upon the person required to pay it and not upon a step in the process of manufacture or distribution of goods. Equally, that the tax can be seen as necessarily or directly increasing the cost of the goods as they pass through the relevant step in the process of manufacture or distribution may aid the conclusion that the tax is upon the goods and not upon the person. But in neither case is the circumstance necessarily conclusive: at best these facts are but circumstances and though sometimes of a compelling kind, they are not criteria. In deciding the question as to whether any particular impost is an excise, it seems to be preferable to adhere to the formulation which I have repeated, without substitution of supposed synonymous expressions, and without attempting to solve the problem by resort to any economic theory. The question is a legal question. To conclude that the tax is an excise because it is in substance a tax upon the relevant step in connexion with the goods is to find that it is a burden on manufacture or production and thus to satisfy economic theory, whether or not the supposed economic consequences of an excise can be seen to be involved in the case in question.

But, of course, in arriving at the conclusion that the tax is a tax upon the relevant step, consideration of many factors is necessary, factors which may not be present in every case and which may have different weight or emphasis in different cases. The "indirectness" of the tax, its immediate entry into the cost of the goods, the proximity of the transaction it taxes to the manufacture or production or movement of the goods into consumption, the form and content of the legislation imposing the tax - all these are included in the relevant considerations. But in the end what must be decided is that the tax is in substance a tax upon the relevant step. That being the central question in a controversy as to the nature of the tax, it will not, in my opinion, necessarily be resolved by the form of the tax or by identifying what according to that form the legislature has made the criterion of its imposition, however important in any particular case those matters may be.

In the instant case the tax - and none dispute that the duty here is a tax - is in form a stamp duty: s. 131B. Although s. 131C provides for "approved vendors" and in their case substitutes for the stamp a periodic return of dutiable instruments and payment of the duty otherwise than by stamping them, the duty remains in form a duty on instruments. Section 131E ensures that although the transaction between the participants has not been the subject of a document to which they are parties, none the less a written record of it will be brought into existence.

The instruments which are dutiable are those which effect, evidence or record a transaction by which a consumer who has been given or is promised possession of goods has yet payments to make in respect of them after delivery of them, either as instalments of purchase money or as rental: s. 131A. These instruments are divided into three categories, from which significant exceptions are made: they are credit purchase agreements, hire-purchase agreements and rental agreements where the bailee of the goods has the right to continue the bailment at no further, or at only a nominal, rent after some payments of rent have been made. But all these transactions, having regard to the exceptions, have in common the features that possession is given of the goods to which they relate before the price or value of the goods is paid and a capacity in the bailee either to obtain the property in the goods or to retain possession of them indefinitely after payment of some sum in respect of his possession of them for some period.

The duty is payable by the bailor of the goods: ss. 131B (2) and 131A "vendor". It is rated in the cases of credit purchase agreements and hire-purchase agreements to the total amount of the payments (interest, insurance and "other" charges apart) which in some circumstances the bailee may be required to pay after he has obtained delivery of the goods, or in the case of rental agreements of the described kind, to the price at which the goods could have been bought at the inception of the hiring: 131a "purchase price". In substance, the duty is rated to the amount which the bailee is to pay after the creation of the bailment, if he is to be entitled to obtain the property in the goods, or in some instances, because the property in the goods has or will pass to him either at or subsequent to the time of the bailment or if he is to acquire the right to the indefinite possession of the goods. By s. 131D the person who is to pay the tax may not add the amount of the duty to the amount payable by the bailee or otherwise seek to recover its amount.

It was said by the plaintiffs in opposing the demurrers of the defendants that the forms of transaction which are caught by the definition of "credit purchase agreement" are all well recognized modes by which goods, including goods manufactured in Australia, pass into consumption and they claim that to enter into such a transaction is to take a step in the movement of the subject goods along the line from manufacture to consumption. But let so much be supposed, in the sense that goods do with great frequency move into consumption by bailment, - and I find no need to pass upon the correctness of the supposition - is the stamp duty on the credit purchase instruments as defined a tax upon the step of placing them into consumption, or is it a tax upon an aspect of the transaction which is but collateral to that step?

The tax is not levied upon some category or class of goods, nor upon all transactions in the particular goods by which at the particular stage in the movement of the goods into consumption, goods of that kind do so move. Generally a duty of excise will be a tax with respect to a class of goods, but in my opinion, it is not necessarily so; and that the duty is not in this instance imposed generally upon some definable category or class of goods is not in itself a reason for denying that the duty is an excise.

As the duty in the instant case is only payable upon an instrument which provides, or evidences an agreement which provides, that moneys are payable after delivery of the goods to the consumer, whether or not the instrument itself also provides for the bailment, it may be said that, although the instruments will, in general, precede the delivery of the goods, the duty is levied at a point after the price of the particular goods or the total of the rental payments to be paid by the consumer has been fixed. In that sense it could be said that the tax is exacted after the goods have passed into consumption and is rated to the amount of payments to be made after they have passed into consumption.

The significance of these facts should not be displaced by the circumstance that the existence of the legislation imposing the tax may, in economic theory or in fact, have an influence on the extent to which goods do go into consumption by bailments accompanied by such agreements as fall within the statutes operation, and thus affect the totality or rate of the movement into consumption of goods of those kinds which may be made the subject of such agreements. As I have said, resort to economic theory or speculation in this fashion should not be had in order to resolve the legal problem as to the essential nature of the impost.

In any case the person required to pay the tax is not necessarily conducting a business of engaging in such transactions in goods of the same class as the goods the subject of the transaction which attracts the duty and thus that person is not necessarily in a position to recover the amount of the duty imposed in the price or total of rental payments in subsequent transactions. Indeed, in the case of some of the plaintiffs it would be proper to infer that the price of the goods or the total sum which should be paid for their indefinite hire was fixed before that plaintiff became associated in any respect with the goods or any transaction in them. The definition of purchase price in s. 131B is careful to exclude the accommodation charges; and except as to the rental agreements only includes the balance after deposit payments or allowances have been made.

All these are considerations of which I do not deny the relevance but no single one of them is to my mind of transcendent value in resolving the question as to the nature of the tax. But, having them all in mind, in my opinion, the duty is in substance a tax upon that aspect of the parties' bargain or arrangement as stipulates for the manner of payment, after the goods have moved into consumption, of a price or a totality of rental payments, such price or total payment having already been determined, so far as appears, uninfluenced in amount by the manner of its payment. Thus the duty may be described as a tax upon the extent of the forbearance of the vendor to exact his "price" at the time the goods are placed into consumption.

In my opinion, such a duty is not a tax upon a step in the process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. In particular, it is not a tax upon the step of placing the goods into consumption. To use the short form, it is not a tax upon the goods. It is not a duty of excise.

In my opinion, the demurrer should be upheld in each case.

The question which is involved in these demurrers respectively is whether the duty under sub-div. (14) of Div. 3, Pt II of the Stamps Act 1958 of Victoria is a duty of excise within the contemplation of the Constitution, s. 90. The duty is imposed on instruments which are agreements of instalment purchase or contain the material particulars of such agreements as are not in writing. The agreements made dutiable are of three classes namely credit purchase, hire-purchase and rental. There is a definition of each class. A credit purchase agreement or a hire-purchase agreement is not dutiable if the purchaser is engaged in the trade or business of selling goods of the same nature or description as the goods to which the agreement relates. No list of goods is specified in the Act for the purposes of the sub-division. It contains a definition of "goods" which says that this word "includes all chattels personal other than money, livestock books and things in action". The application of the provisions of the sub-division is not limited to goods of home manufacture and second-hand goods are not excluded. The duty under the sub-division is two per cent of the "purchase price". This means in the case of a credit purchase agreement or a hire-purchase agreement - "the total amount payable under the agreement by the purchaser on any account whatsoever in respect of the goods the subject-matter of the agreement less the amount of the deposit or other money or consideration paid or given to the vendor at or before the making of the agreement and less the total amount payable under the agreement for or by way of interest or insurance or other charge". In the case of a rental agreement the "purchase price" means - "the price at which the goods the subject-matter of the agreement might have been purchased for cash at the time of entering into the rental agreement". The tax is payable by the vendor: if he is not bound by the Act the tax is payable by the purchaser. Section 131D prohibits the vendor from transferring the burden of the duty or any part of it to the purchaser.

It seems from the words of the definition of these agreements that they are made dutiable merely in the relation of instrument by means of which credit is provided for the purchase of goods for use or consumption and payment of the outstanding liability is deferred and secured. The expression "purchase price" is selected to specify an amount which having regard to the terms of the definition is the monetary value of the credit provided in each case. I think that it is a misconception of the nature of the duty to describe it as a tax on the goods in respect of which credit is given. It has clearly a direct relation to such credit but no such relation to the goods. I think that it is not the sort of tax the imposition of which naturally tends to be an ingredient of the price paid by the purchaser under the agreement. Of course, a vendor might attempt to recoup himself the tax but this would be achieved by increasing charges for services rendered to purchasers generally. That would not amount to a passing on of the burden of the tax which is an incident of taxes within the scope of s. 90.

In five actions in this Court against the State of Victoria and the Minister of that State administering the Stamps Act 1958 Vict. as amended, the question is raised by demurrer to the respective statements of claim whether ss. 131B, 131C and 131E of the Act are ultra vires the Parliament of Victoria, either generally or insofar as they apply to certain kinds of agreements into which the plaintiffs enter in the course of their businesses. The ground of the attack upon the sections is that they purport to impose exactions which, either in all cases or at least in some in which the plaintiffs are concerned, are duties of excise, and as such are excluded from the legislative power of the States by s. 90 of the Constitution.

The sections thus impugned are in sub-div. (14) of Div. 3 of the Act, a sub-division which, as its heading shows, relates to the imposition of a stamp duty on "Instalment Purchase Agreements". That expression is defined by s. 131A to mean a credit purchase agreement, a hire-purchase agreement, or a rental agreement. Each of these expressions is in its turn the subject of a definition. The precise terms of the definitions need to be carefully noticed, for the nature of a duty imposed upon instruments of defined classes must necessarily depend very much upon the tests prescribed for inclusion in those classes.

A "credit purchase agreement" means, subject to two exclusions which I shall mention in a moment, an agreement for the purchase of goods under which, irrespective of the time at which the property in the goods passes or is to pass to the purchaser, the purchase price or any part thereof is paid or payable by a number of instalments (not being less than six) which are to be paid over a period of not less than six months, and under which any of the instalments are to be paid after the goods have been delivered to the purchaser, and whether such instalments are paid or payable by cash, or by cheque, bill of exchange or promissory note payable on demand or otherwise. The first exclusion is of any agreement for the purchase of goods together with (i) real property, (ii) any estate or interest in real property or (iii) any business or interest in a business. The second is of any agreement under which the purchaser is a person who is engaged in the trade or business of selling goods of the same nature or description as the goods to which the agreement relates. Thus to be within this definition an agreement must not only provide for the delivery of goods to a purchaser who, in effect, is in the position of a consumer and also for the passing of the property therein to him but, in addition, must provide for his making payments to the vendor on account of the purchase price after the goods have been delivered.

The expression "hire-purchase agreement" is similarly confined to an agreement with a person who (broadly speaking) is a consumer. Subject to that, it is defined to mean an agreement for the bailment of goods under which the bailee may buy goods, or under which the property in the goods may pass to the bailee, or under which any provision for credit of payments is made in the event of a subsequent purchase of the goods. There is added a provision that where by virtue of two or more agreements (none of which itself constitutes a hire-purchase agreement) there is such a bailment of goods the agreements shall be treated as a single agreement. The point to notice here is that to be within this definition an agreement must both entitle a person to the possession of goods and also make provision (necessarily including financial provision) in respect of his possibly acquiring them subsequently. (The definition does not mention any payment to be made in the case of an agreement "under which the property in the goods may pass to the bailee", but unless an amount is payable no duty is chargeable. This will appear from the schedule and the definition of "purchase price", which will be referred to later.)

The expression "rental agreement" is defined to mean an agreement for the bailment of goods under which the bailee may, after a specified number of instalments of rent (not being less than two instalments) have been paid in respect thereof, continue the bailment, or from time to time renew it, at a nominal rent or without further payment or on the payment of a nominal periodical or other amount. Here, again, it is to be noticed that to be within the definition an agreement must give a person the possession of goods and provide for his subsequently paying money - in this instance as a condition of being entitled to continue in possession of them.

The first of the sections which the plaintiffs attack as imposing a duty of excise, s. 131B, provides in sub-s. (1), subject to the sub-division and to the exemptions in the schedule, that there shall be charged and paid for the use of Her Majesty upon every instrument of instalment purchase relating to any instalment purchase agreement the duty specified in a schedule under the heading "Instalment Purchase Agreement". The duty there specified is a pro rata duty in relation to the amount of the "purchase price", but subject to an exemption of any instalment purchase agreement when the "purchase price" is less than £10. (There is another exemption but it is immaterial.) "Purchase price" has a special meaning by reason of a definition in s. 131A, which itself needs to be read in the light of definitions of the expressions "vendor" and "purchaser". These words mean respectively the person by whom and the person to whom goods are bailed or sold or agreed to be bailed or sold under an instalment purchase agreement. "Purchase price" is defined to mean (a) in the case of a credit purchase agreement or a hire-purchase agreement, the total amount payable under the agreement by the purchaser on any account whatsoever in respect of the goods the subject matter of the agreement, less the amount of the deposit or other money or consideration paid or given to the vendor at or before the making of the agreement and less the total amount payable under the agreement for or by way of interest or insurance or other charge; and (b) in the case of a rental agreement, the price at which the goods the subject-matter of the agreement might have been purchased for cash at the time of entering into the rental agreement.

Sub-section (2) of s. 131B goes on to provide that the duty shall be denoted by an adhesive stamp and be paid by the vendor, or if he is not bound by the Act, then by the purchaser. This is qualified by the second of the sections under attack, s. 131C, which applies to a person carrying on business as a vendor of goods under instalment purchase agreements, if the Governor in Council declares him to be an approved vendor. Such a person is relieved by s. 131C from liability to pay the duty by means of adhesive stamps, but instead is made liable to pay it on a monthly statement of all instalment purchase agreements entered into by him during the last preceding month.

The expression "instrument of instalment purchase", as used in s. 131B, is not defined, but its meaning is made apparent by the third of the challenged sections, s. 131E. That section requires that the "vendor" of any goods under an instalment purchase agreement shall, where the purchase price is not less than £10, at or before the time of the making of the agreement, prepare an original instrument in relation to the agreement. The original agreement, if the instalment purchase agreement is in writing, is to be the agreement as in the writing; in any other case it is to be a memorandum in writing of the agreement prepared in accordance with certain specified requirements. Thus the Act ensures that the duty, though it is imposed as a stamp duty on an instrument, will become payable whenever an instalment purchase agreement is made, unless of course one of the exemptions applies.

One more provision of the Act may be mentioned, though I do not myself think that it has any real bearing on the case. Section 131D makes it an offence for the vendor or other person to add the amount of any duty or any part of the duty payable by the vendor to any amount payable by the purchaser of any goods (whether under the agreement or otherwise) or otherwise to demand or recover or seek to recover any such amount from the purchaser.

The statements of claim contain allegations to the effect that the respective plaintiffs in the course of their businesses enter into agreements of various kinds, each falling within the definition of instalment purchase agreement in s. 131A, in respect of (inter alia) new goods manufactured in Australia. Further allegations may be condensed by saying that each of the transactions effectuated by the plaintiffs' agreements relating to goods of that description is a transaction by which the goods reach the hands of a consumer. The plaintiffs' contention on the demurrer is that if they sustain these allegations at the trial they will be entitled to a declaration that ss. 131B, 131C and 131E are invalid as purporting to impose duties of excise, at least insofar as those sections apply to instalment purchase agreements relating to new goods manufactured in Australia.

It is now established, as the Court said in Bolton v. Madsen [1] , that for constitutional purposes duties of excise are taxes directly related to goods (i.e. goods originating in Australia), imposed at some step in their production or distribution before they reach the hands of consumers. This does not exclude a tax imposed, as is the duty now in question, upon the final step in distribution, by which goods reach the hands of consumers. The crucial question in the case of such a tax is whether it is "directly related to goods", in the sense in which that and similar expressions, such as "upon" goods, are used in the lengthening line of judgments which have been delivered in this Court upon the subject. What is referred to may, I think, be described as a relation consisting in this, that some conduct is selected by the relevant legislation as being a step in the production, manufacture or distribution of goods and in that character is made of the essence of the tax. A tax must necessarily be made payable by a person; but it is not a duty of excise unless the criterion of the person's liability is the fact that some act of his possesses the quality of a contribution either to the physical character of goods as subjects of commerce or to the sequence of events which results in their being available, as in the hands of a consumer, to be put to their ultimate purpose. The reason is that a duty of excise is, at bottom, a burden upon home production or manufacture. Obviously it is such a burden if it is payable upon a step in production or manufacture in its character of such a step. Not so obviously but just as certainly, it is such a burden if it is payable upon a step in distribution in its character of such a step; for in that case from the time the goods come into existence the law makes it inherent in their nature, as goods requiring distribution in order to become available to fulfil their purpose, that the tax shall be paid. This is the point that Rich and Williams JJ. made by saying in Parton v. Milk Board (Vict.) [1] , that to be an excise duty a tax must be imposed "so as to be a method of taxing the production or manufacture of goods". At whatever point before consumption a duty of excise becomes payable it must burden production or manufacture. Their Honours went on immediately to say that the production or manufacture of an article will be taxed whenever a tax is imposed in respect of some dealing with the article by way of sale or distribution at any stage of its existence, provided that it is expected or intended that the taxpayer will not bear the ultimate incidence of the tax himself but will indemnify himself by passing it on to the purchaser or consumer. This statement may need modification or explanation in the light of subsequent judgments, but it directs attention to the point that must be kept in mind in the present case, namely that a tax cannot be an excise unless its fundamental concern is with goods rather than persons. Its probable ultimate incidence is relevant for consideration simply because if the consumer is likely to bear the tax in the end that fact tends to show that the tax is in its nature a tax upon the goods and not upon the particular person who is made liable for payment of it to the Crown. In other words the tax reflects back upon the production or manufacture of the goods, since its effect is that from the beginning the goods are subjected to an inherent inability to reach the point of consumption without the duty becoming payable and so entering into their total cost. As Dixon J. said in Parton v. Milk Board (Vict.) [1] , "A tax upon a commodity at any point in the course of distribution before it reaches the consumer produces the same effect as a tax upon its manufacture or production" [2] .

1. (1963) 110 C.L.R. 264, at p. 271. 2. (1949) 80 C.L.R. 229, at p. 252. 3. (1949) 80 C.L.R. 229. 4. (1949) 80 C.L.R., at p. 260.

Where a tax is made payable in respect of a transaction which not only affects the ownership or possession of goods but also creates or regulates rights and obligations as between the immediate parties concerning collateral matters such as the payment of moneys, a particular problem in the application of these principles arises. For while the instrument effectuates a single though complex transaction, the tax upon it may be found, when the relevant legislation is examined, to relate in essence not to the nature of the goods or to any effect which the transaction has upon them, but to the nature of the provisions which deal with the collateral matters. The contention of the plaintiffs in the present case, that a stamp duty upon an instalment purchase agreement is an excise duty because the agreement takes a step in the distribution of goods, is fallacious because it fails to recognize, and consequently obscures, the crucial distinction. It overlooks the fact that such an agreement has an operation beyond and apart from that of taking a step in distribution, and that therefore the question whether a tax upon it is a duty of excise depends upon whether the tax is not only upon an agreement which in fact takes such a step but upon an agreement in respect of its taking such a step - that is to say whether it is a tax upon the taking of the step: see the formulation which I suggested in Dennis Hotels Pty. Ltd. v. Victoria [3] , approved in Bolton v. Madsen [4] . The stamp duty here in question is not imposed upon the whole genus of agreements for purchase by or bailment to consumers. It is imposed upon a particular species only of such agreements, namely those which, having provided for the purchase or bailment, go on to create rights and obligations between the parties in relation to payments to be made after the delivery of the goods. In argument the duty was described as relating to the credit element in the transaction. The description may be accepted as making the point, succinctly if not with complete accuracy, that what gives an agreement for a bailment or for a purchase the character that attracts the duty is to be found not in the provisions that take a step in the distribution of the goods, i.e. the provisions for bailment or for purchase - not in anything that it does concerning the goods - but in the special nature of provisions it contains in respect of the future rights and obligations of the particular parties inter se as to the payment of money. The duty therefore cannot be described as producing "the same effect as a tax upon manufacture or production": it is not by its nature a burden upon production or manufacture. In essence it is a tax not "upon" goods, nor "directly related to goods". On the contrary, it is a tax upon the individual who is made liable to pay it, and its direct relation is to his entering into a financial arrangement of a particular kind.

1. (1960) 104 C.L.R. 529, at p. 559. 2. (1963) 110 C.L.R. 264, at p. 273.

For these reasons I am of opinion that the stamp duty provided for by ss. 131B, 131C and 131E is not a duty of excise, even in respect of instalment purchase agreements relating to new goods manufactured in Australia. I would therefore uphold the demurrers, and give judgment for the defendants with respect to the whole action under O. 26, r. 13 of the High Court Rules.

In my opinion the contention that ss. 131B, 131C and 131E of the Stamps Act 1958 Vict. impose duties of excise should be rejected and the respective demurrers allowed. I hold this view because I am satisfied that an examination of those sections plainly establishes that the imposts for which they provide are not, in the sense in which that expression was used in Bolton v. Madsen [1] , "taxes directly related to goods"; they are not in substance or at all imposed "in respect of" or "in relation to goods" nor "by reference to, or by reason of any relation" between the dealer "and any commodity as producer, manufacturer, processor, seller or purchaser". The liability is attracted not by reason of or by reference to the goods or the character of the goods the subject of any relevant transaction but by reason of and by reference to the nature of the specified forms of transactions when, and only when, those forms are employed in the disposal of any goods irrespective of their character. The conclusion to which I have come is in substance in accordance with the views expressed by Kitto J. who has examined in detail the substance and effect of the impugned sections and with whose reasons I agree.

1. (1963) 110 C.L.R. 264, at p. 271. Menzies J.

The sections of the Stamps Act 1958 Vict., which are here impugned as imposing duties of excise, exact stamp duty at the point where certain goods reach the consumer from the retailer or other final distributor - "the vendor" - by virtue of any one of three specified transactions: a credit purchase agreement, a hire-purchase agreement or a rental agreement. I regard each such agreement as having a common feature, viz. an agreement whereby, in a broad sense, credit may be given. If it be thought that a rental agreement does not belong in this category, I would point to the peculiar nature of a rental agreement as defined (that is, after a specified number of instalments, the bailment which the agreement creates continues either without further payment or the payment of a nominal amount) and, in the same connexion, I would refer to the excellent article in the Law Institute Journal (Vict.), vol. 38, no. 10, 366, where at p. 378 it is shown how rental agreements are used as instruments for giving credit to consumers.

The statutory scheme is to require agreements as specified to be in writing and to impose upon the vendor making the agreement the obligation to pay stamp duty calculated not upon the value of the goods but, in effect, upon so much of their value as is not then and there paid.

In deciding whether stamp duty so imposed is a duty of excise, nothing is, I think, to be gained by going back beyond Bolton v. Madsen [1] , where there appears a statement of what this Court has decided is a duty of excise [2] . It is a tax directly relating to goods - and, as I think, goods of home production only - imposed at a step in their production or distribution before reaching the consumer. The question here is, therefore, whether the stamp duty is a tax directly relating to goods.

1. (1963) 110 C.L.R. 264. 2. (1963) 110 C.L.R., at p. 271.

It has been found useful in determining whether a tax is a duty of excise to pose the question whether it is in truth a tax upon persons who conduct a business producing, carrying, distributing or selling goods, or a tax "upon" or "in respect of" or "in relation to" goods: see Peterswald v. Bartley [3] ; Matthews v. Chicory Marketing Board (Vict.) [4] ; Browns Transport Pty. Ltd. v. Kropp [5] ; Dennis Hotels Pty. Ltd. v. Victoria [6] ; and Bolton v. Madsen [1] . It is, of course, true that a tax directly related to goods must always be borne by persons; nevertheless, the essence of the distinction which has been attempted is between a tax on the one hand which, according to its nature, is upon a person for the doing of what he does in relation to goods notwithstanding that the payment of the tax is something that is likely to be taken into account in fixing the price of the goods which the person taxed is engaged in producing, carrying, distributing or selling, if and when they are sold; and, on the other hand, a tax which, according to its nature, is a tax upon production because it is related to the quantity or value of goods produced, distributed or sold. In all of the cases which I have just cited, except Matthews v. Chicory Marketing Board (Vict.) [1] , the tax was held not to be a duty of excise, though in Peterswald v. Bartley [2] it was a brewers' licence fee, in Browns Transport Pty. Ltd. v. Kropp [3] it was upon a carrier of goods, in Dennis Hotels Pty. Ltd. v. Victoria [4] it was upon a licensed victualler in respect of purchases for retail sale, and in Bolton v. Madsen [5] it was again upon a carrier of goods. In Matthews v. Chicory Marketing Board (Vict.) [1] the levy upon producers of chicory of £1 for every half-acre planted was held to be a duty of excise because "the basis adopted for the levy has a natural, although not a necessary, relation to the quantity of the commodity produced": see per Dixon J. [6] .

1. (1904) 1 C.L.R. 497. 2. (1938) 60 C.L.R. 263. 3. (1958) 100 C.L.R. 117. 4. (1960) 104 C.L.R. 529. 5. (1963) 110 C.L.R. 264. 6. (1938) 60 C.L.R. 263. 7. (1904) 1 C.L.R. 497. 8. (1958) 100 C.L.R. 117. 9. (1960) 104 C.L.R. 529. 10. (1963) 110 C.L.R. 264. 11. (1938) 60 C.L.R. 263. 12. (1938) 60 C.L.R., at p. 303.

I have come to the conclusion that the tax here in question, which is calculated upon what in fact remains to be paid for the goods - which may be much or little - and has no necessary or natural relation to the quantity or value of the goods distributed, is not a duty of excise notwithstanding that the tax is imposed upon a step which can be said to be taken in the course of the distribution of the goods from manufacturer to consumer. The tax lacks, therefore, that element necessary to constitute it a duty of excise that was found to be present in Matthews v. Chicory Marketing Board (Vict.) [1] . It is a tax upon the vendor, who must pay it and is forbidden to pass it on, and the tax depends upon his entering into an arrangement of the kind specified.

In my opinion, the demurrer should be upheld and judgment given for the defendants.

In my opinion the provisions of the Stamps Act 1958 Vict. that are challenged do not impose duties of excise. The tax they impose cannot I think be described as a tax upon goods: and that is the fundamental meaning of an excise. The expression "tax upon goods" embodies a concept that is perhaps not susceptible of exact, definitive or complete economic or legal analysis. But I agree in the explanation of it given by my brother Kitto whose judgment I have had the advantage of reading.

In its typical form an excise is commonly described as imposing a tax on goods of a particular kind - as a duty of so much on beer, spirits, tobacco, tea or some other commodity. Excise duties are in a fiscal sense analogues of customs duties: but the distinction between them is, as I said in the Dennis Hotels Case [1] , the result of a past history of their collection by different authorities, rather than of any fundamental distinction in their fiscal character. In either case the levy, in its typical form, is exacted in respect of a specified commodity, determined by its inherent physical character, and sometimes additionally by the place of its origin. In the case of an excise, being a duty on the commodity locally produced, the point - upon production or at some stage after production and before consumption - at which the duty is collected is a matter of administrative convenience rather than a determinant of the fiscal character of the impost. But a tax upon goods of a particular kind collected at a particular stage of their passage from production to consumption is not the same thing as a tax upon a particular method by which goods of different kinds are put into consumption. A consequence of the distinction becomes manifest when the price of articles reaching consumers by the medium of some form of credit transaction is seen to reflect, in varying degrees, a tax imposed upon such transactions, while the price of other articles of exactly the same kind but bought for cash contains no element attributable to such tax.

The tax here, it seems to me, is a tax that falls upon persons who engage in particular forms of transactions, which may with sufficient accuracy be called credit transactions. Those transactions relate to goods, but not to goods of any particular kind, not to a commodity. The tax is a tax upon persons who are parties to particular forms of transactions in respect of any forms of goods other than those expressly excepted.

I consider the demurrers should be allowed and judgment given for the defendants in each case.

In each of these five demurrers the plaintiff seeks a declaration that ss. 131B, 131C and 131E of sub-div. (14) of the Victorian Stamps Act are invalid, at least insofar as they purport to apply to hire-purchase agreements relating to new goods manufactured in Australia.

Anderson's Pty. Limited, the plaintiff in the first case, is a retail trader in new goods comprising furniture, furnishings and domestic appliances. It sells some of its goods for cash and disposes of others under hire-purchase agreements. In each of the remaining four cases the plaintiff is a hire-purchase company which purchases goods, such as motor vehicles, plant, machinery and domestic appliances, and disposes of them to customers under hire-purchase agreements.

The attack on the validity of the sections is based upon the contention that they impose duties of excise.

Subject to certain immaterial exemptions, s. 131B (1) imposes upon every "instrument of instalment purchase" the duty specified in the Third Schedule to the Act and under that Schedule the amount of duty is to be assessed by reference to the "purchase price" of the goods. The duty is made payable by the "vendor" and, subject to s. 131C (1), it is to be denoted by adhesive stamp (s. 131B (2)). Section 131C (1), however, enables the Governor-in-Council to declare any person carrying on business as a "vendor" of goods "under instalment purchase agreements" to be an "approved vendor". Such a "vendor" is not liable for payment of stamp duty denoted by adhesive stamp but is required to furnish to the Comptroller of Stamps a monthly statement giving particulars of all "instalment purchase agreements" entered into by him during the preceding month and to pay in cash a sum equal to the aggregate amount of stamp duty which would have been payable in respect of all such agreements had they been stamped.

A "vendor" is forbidden, by s. 131D (1), to add the amount of any duty payable by him to any amount payable by the "purchaser" of any goods "or otherwise demand or recover or seek to recover" any such amount from the "purchaser". And, by s. 131E (1), the "vendor" of any goods under an "instalment purchase agreement" is required, where the "purchase price" is not less than ten pounds, to prepare an "original instrument" in relation to the agreement conforming with the requirements of the section. Section 131A defines a number of the terms used in the subdivision. "Instalment purchase agreement" means "a credit purchase agreement, a hire-purchase agreement or a rental agreement". "Goods" include "all chattels personal other than money, livestock, books and things in action and include any fixture severable from the realty". "Credit purchase agreement" means an agreement whereby the purchase price of goods is payable by not less than six instalments to be paid over a period of not less than six months and under which any of the instalments are to be paid after delivery of the goods to the purchaser, but does not include an agreement under which the purchaser is a person engaged in the trade or business of selling goods of the same nature or description as the goods to which the agreement relates. "Hire-purchase agreement" means "agreement for the bailment of goods under which the bailee may buy the goods or under which the property in the goods may pass to the bailee or under which any provision for credit of payments is to be made in the event of a subsequent purchase of the goods but does not include any agreement under which the purchaser is a person who is engaged in the trade or business of selling goods of the same nature or description as the goods to which the agreement relates". "Purchase price" means "in the case of a credit purchase agreement or a hire-purchase agreement, the total amount payable under the agreement by the purchaser on any account whatsoever in respect of the goods the subject-matter of the agreement less the amount of the deposit or other money or consideration paid or given to the vendor at or before the making of the agreement and less the total amount payable under the agreement for or by way of interest or insurance or other charge ". "Purchaser" means "the person to whom goods are bailed or sold or agreed to be bailed or sold under an instalment purchase agreement", and "Vendor" means "the person by whom goods are bailed or sold or agreed to be bailed or sold" under such an agreement. "Rental agreement" means "an agreement for the bailment of goods under which the bailee may after a specified number of instalments of rent (not being less than two instalments) have been paid in respect thereof continue the bailment or from time to time renew the bailment at a nominal rent or without any further payment or on the payment of a nominal periodical or other amount". And, in the case of a rental agreement, "purchase price" means "the price at which the goods the subject-matter of the agreement might have been purchased for cash at the time of entering into the rental agreement".

The submissions made on behalf of the plaintiffs are that the duty thus imposed - which is undoubtedly a tax - is imposed "upon" or "in respect of" or "in relation to" goods and is levied upon a dealing with the goods in the course of their passage to the consumer. The amount of duty payable is calculated by reference to the value of the goods with which the dealing is concerned and the duty is an indirect tax in the sense that it is imposed in the expectation or with the intention that it will be passed on by the person paying it. It is said, and I agree, that if these features exist, they are characteristic of an excise duty. But the first question must be whether, on an examination of the relevant provisions of the Act, they are present. If they or some of them are, the enquiry must then be whether there are other and counter-balancing considerations which point to the opposite conclusion. And, finally, it must be determined upon a consideration of all the elements involved in the legislation whether the tax is properly to be described as a duty of excise. In my opinion the impost is not of that character. I begin with the fact that it is called a stamp duty and is imposed upon instruments. It is true that they are instruments evidencing certain types of transactions relating to goods but it matters not what the goods are; what attracts the tax is the method of disposing of them. The amount of tax payable on any particular transaction is not related, except in the case of "rental agreements", to the value or quantity of the goods. It is assessed upon what is called the "purchase price" but which is in reality the difference between the amount of the deposit paid by the "purchaser" or the amount allowed to him by way of deposit representing the value of goods "traded in" by him and the total of the payments to be made by him less interest and other charges. It is plain that this "purchase price" will vary from case to case even though the goods may be identical. The goods may be imported, wholly or in part. They may be second-hand goods, that is to say they may have earlier reached the hands of a consumer by means of an instrument on which duty has been paid and have found their way back from him into the hands of the "vendor" or some other distributor. The "vendor" is prohibited from adding the amount of the tax paid to the "purchase price" and thus passing it on to the "purchaser". It is true that a means of passing on the tax in an indirect fashion may perhaps be found by increasing interest rates or by adding to the cost of goods an amount which may be capable of approximate calculation but this would be, to use the phrase of the Judicial Committee in Bank of Toronto v. Lambe [1] , "an obscure and circuitous" way of passing on the tax. It is a tax imposed directly upon a "vendor" of goods if and only if he chooses to dispose of them by a form of contract which involves the extension of credit to a "purchaser" who is not himself a trader in goods of that description.

When all these considerations are taken into account, it is impossible in my opinion to say that the tax is a duty of excise and I would therefore allow the demurrers.