Associated Steamships Pty Ltd v Western Australia [1969] HCA 45;

Associated Steamships Pty Ltd v Western Australia [1969] HCA 45; - HCA 1969 case summary — Zoe

[17]

"16 (1) Subject to subsection (2) of this section, from and after

the commencement of this Act the stamp duties to be charged for the

use of His Majesty upon the several instruments specified in the

Second Schedule to this Act shall be the several duties in the said

schedule specified, which duties shall be in substitution for the

duties chargeable under the enactments repealed by this Act, and

shall be subject to the exemptions contained in this Act and in any

other Act for the time being in force.

16 (2) Without prejudice to the operation of section nineteen of

this Act, no stamp duties shall be charged as provided in subsection

(1) of this section upon any instrument that contains or relates to

a transaction in the official short term money market.

17 (1) All stamp duties for the time being chargeable by law upon

any instruments are to be paid and denoted according to the

provisions in this Act contained, and subject to any express

provision of this Act or any regulation may be denoted by either

impressed or adhesive stamps.

96 For the purposes of this Act "receipt" means any note,

memorandum or writing whatsoever -

(a) by which any money or any bill of exchange or promissory note

for money is acknowledged or expressed to have been received,

deposited or paid; or

(b) by which any debt or demand or any part of a debt or

demand is acknowledged to have been settled, satisfied

or discharged; or

(c) that signifies or imports any such acknowledgment,

whether the note, memorandum or writing is or is not signed with the

name of any person.

97 The stamp upon a receipt shall be cancelled by the person by

whom the receipt is given before he delivers it out of his hands.

99 (1) If any person -

(a) gives any receipt liable to duty and not duly stamped;

or

(b) in any case where a receipt would be liable to duty refuses to

give a receipt duly stamped; or

(c) upon a payment to the amount of ten dollars or upwards

gives a receipt for a sum not amounting to ten dollars,

or separates or divides the amount paid with intent

to evade the duty,

he shall be liable to a penalty not exceeding forty dollars.

(2) If upon payment of an amount in any case where a receipt would

be liable to duty, the person who receives the payment does not give

or tender to the person who makes the payment a receipt in writing

duly stamped, the person who receives such payment shall be guilty

of an offence, and on conviction shall be liable to a penalty not

exceeding twenty dollars.

99 (4) This section does not require a receipt to be given or

tendered by a person who has given notice to the Commissioner

pursuant to subsection (1) of section ninety-nine A of this Act

until the notice is cancelled pursuant to that section.

(5) Where a receipt has not been requested, a receipt shall be

deemed to have been given for the purposes of this section, if a

receipt is made out and duly stamped notwithstanding that the

receipt is not delivered or sent to any person.

(6) Where a receipt is made out and duly stamped but not delivered

or sent to the person entitled thereto or authorised to receive it,

the person making out the receipt shall retain possession of it for

at least two years after it is so made out.

99A (1) Any person referred to in, and to whom paragraph (a), (b)

or (c) under the heading "Receipt" in the Second Schedule to this

Act, applies and any other person who on application to the

Commissioner has been granted permission in writing by him so to do,

may give notice in writing in the prescribed form to the

Commissioner that he elects to pay duty under this section instead

of being obliged to comply with the requirements of this Act with

respect to the payment of duty on receipts.

99B (1) Where a person has given a notice to the Commissioner

pursuant to subsection (1) of section ninety-nine A of this Act

until the notice is duly cancelled pursuant to subsection (2) of

that section the person -

(a) shall forward to the Commissioner at such intervals

as the Commissioner in writing directs a statement in

the prescribed form verified in the manner prescribed,

setting out the total of all amounts received or deemed

to have been received by, or paid or deemed to have

been paid to, or deposited with or deemed to have been

deposited with that person during the prescribed

period; and

(b) shall forthwith pay to the Commissioner as duty on

that statement an amount calculated at the rate of -

one cent for each ten dollars and also for any fractional

part of ten dollars, if the person so forwarding the

statement is a person referred to in, and to whom

paragraph (a), (b) or (c) under the heading "RECEIPT"

in the Second Schedule to this Act, would otherwise

apply

on so much of the total amount so set out in the statement

as represents the aggregate of the amounts in

respect of which a receipt given for each of those

amounts would have been liable to duty under and in

accordance with that Schedule, if the person had not

included that amount in the statement forwarded to

the Commissioner." (at p102)

[25]

15. Is the duty imposed by the Act upon or in respect of the second and third classes of writing which I have described truly and in substance merely a tax upon the creation of an instrument? I might mention in passing that it may be questionable whether the duty is imposed at all on the writing in the third of these classes; for in that case there is a direct obligation to pay the tax on the total amount of money received during the span of time covered by the return although the duty is expressed as duty "on the statement" (see s. 99B). The return itself is not, in my opinion, a dutiable instrument (see Second Schedule). In my opinion, it is no more than part of the administrative mechanism of quantifying and collecting the amount of tax payable upon the receipt of money. Whilst the making of the return is at the option of the person making it and subject to the consent and approval of the Commissioner for Stamp Duties, the very fact that it is an acceptable alternative to the stamping of the writings in the second class is of some significance, though may be not of critical significance in deciding the actual question which we are here dealing with, namely, is the tax a mere instrument duty or a tax on the receipt of money? This same question was, in my opinion, critical to the resolution of the problem in the case of Western Australia v. Hamersley Iron Pty. Ltd. (No. 1) [1969] HCA 42; (1969) 120 CLR 42 in which the Court recently delivered judgment. In that case, I came to the clear conclusion, as did the late Sir Alan Taylor, that the duty in relation to the receipt of the price on the sale of goods was a tax on the receipt of the purchase price for goods sold; it was not a mere instrument duty. It was thus in the same case as a tax on the price charged for the goods; it was in substance a sales tax and therefore, according to the decisions of this Court, an excise. It mattered not that the section there under attack was limited to the receipt of money out of State: it was none the less, as applied to the receipt of the purchase price for goods sold, a tax on the receipt of that price. I remain of that opinion. In that case the writing which was required to be brought into existence was in substance of a like kind with the writings in the second class of the three classes which I have already set out. It was not required to be used commercially at all. In my opinion, for that reason and by reason of the compulsion of the statute to make writings of the second class, there is a radical difference between the first and second class of those writings: and as I have said, the third class is scarcely an instrument at all. (at p104)

[41]

3. The statement of claim alleges that the payments in respect of which declarations are sought are received in the course of the carrying on by the plaintiff of a business as, inter alia, a carrier of goods between States for reward. It is important, because it goes to the root of the case, to observe that this allegation is immaterial to the plaintiff's claim to the protection of s. 92. In fact it is worse than immaterial : it tends to confuse the issue by implying that the freedom which s. 92 assures is freedom not only from restraints and burdens upon individual acts of inter-State trade, commerce or intercourse, but also from consequential detriments to businesses in which such acts occur. The Banking Case (The Commonwealth v. Bank of N.S.W.) [1949] HCA 47; (1949) 79 CLR 497 established that s. 92 forbids only such restraints and burdens as, but for the section, laws would impose upon inter-State trade by their direct operation ; and that necessarily involves, as the decisions of this Court have repeatedly shown over the last twenty years, that upon a claim to the protection of s. 92 the crucial question is whether the law in question operates directly to restrict or burden something that is actually within, and not merely connected with, the concept of inter-State trade, commerce and intercourse. The economic or social consequences that flow from its legal operation are irrelevant, as the Privy Council said in so many words in the Banking Case (1949) 79 CLR, at p 637 and the operation of the impugned law upon anything outside the very subject matter for which freedom is decreed is likewise, and for the same reason, irrelevant. Accordingly, a law which imposes a burden upon a person in respect of some act that he does in his business is not forbidden by s. 92 unless the act itself, as distinguished from all other acts in or aspects of the business, is or forms part of inter-State trade, commerce or intercourse ; if it is not, the person gains no protection from s. 92 by showing that in his business some other act is an act of inter-State trade, commerce or intercourse and that the two acts are interconnected as parts of a single sequence of business events. Thus, to take a familiar example, it is one thing, and correct, to treat an intraState movement as within the protection of s. 92 if it is an integral part of a larger movement which as a whole is an inter-State movement ; but it is another thing, and erroneous, to treat an intraState movement as within the protection on the plea that, though not an integral part of an inter-State movement, it is an essential step in preparations for a future inter-State movement, and that the preparations and the inter-State movement are both parts of the one business. Such a plea confuses the very things that the Banking Case showed must be kept distinct. The freedom with which s. 92 is concerned is only legal freedom - freedom from restraints and burdens imposed by or under laws - not immunity from the more remote, de facto, disadvantages which may ensue when laws have operated according to their terms. (at p109)

[42]

4. All this has been amply illustrated by the Tasmanian road transport cases, where the basic principle that has been applied is none other than that which the Margarine Cases exemplified in their own field. The differences of opinion which have arisen among members of the Court in cases of this kind are largely to be explained as differences upon the question of fact, namely whether a movement which itself crosses no State lines is in truth a part of, as distinguished from a mere preparation for, a larger and inter-State movement : see Tamar Timber Trading Co. Pty. Ltd. v. Pilkington [1968] HCA 15; (1968) 117 CLR 353 and cases there cited. I took an opportunity to review some of the principal authorities in Samuels v. Readers' Digest Association Pty. Ltd. [1969] HCA 6; (1969) 120 CLR 1, at pp 27-30 ; sub nom Re Readers' Digest Association Pty Ltd. [1969] HCA 6; 43 A.L.J.R. 116, at pp. 125, 126. and shall not now repeat what I said in that case. The present case seems to me to present less difficulty than some and indeed to afford a classic example of a law to which s. 92 has nothing to say since the only direct operation of the law is to impose a burden upon an intra-State act, with consequences, but no more than consequences, for inter-State trade. What, in the plaintiff's business, constitutes trade, commerce or intercourse among the States ? Only the inter-State transportation of goods. To say that it is the inter-State transportation of goods for reward adds nothing, except that the plaintiff receives money for performing its acts of inter-State transportation ; but the statement has nevertheless been made repeatedly in the course of the argument for the purpose of suggesting that a law which taxes receipt of the freight taxes the transportation for reward. It is precisely at this point that it becomes imperative to observe the general principle I have been discussing. To say, as the plaintiff does, that the Stamp Act taxes the transportation for reward is to use a loose expression. The Act taxes the receipt of the reward and it taxes nothing else. That, and only that, is its direct operation. To say that that operation renders the transportation for reward, or the plaintiff's inter-State transportation business generally, less profitable than it would otherwise be is to wander at once away from the notion of legal freedom into the area of economic consequences. In a business sense it is undeniable that an effect of imposing a tax upon intra-State receipts is, in relation to an intra-State receipt of freight for an inter-State carriage of goods, to burden the business of inter-State carrying, and to burden every individual act of inter-State carrying for which payment is made within the State. But that is a proposition of economics, for the truth of it depends upon the word "effect" being used as referring to ultimate business consequences. The law that imposes the tax does not operate upon or by reference to any conduct by which payments happen to be earned. Its concern is only with the bare fact that money is received, regardless of whether it has been earned in this way or in that or not earned at all. The consequences that flow from the taxing of a receipt may be of many kinds, and their remoteness from the receipt itself may be of varying degrees ; but however disadvantageous they may be they are no impairment of any freedom, except the freedom to receive a payment. (at p111)

[54]

5. I have come to the conclusion that the plaintiff's submission should be upheld. It is true that the Act is called a Stamp Act and that it takes the form of requiring the recipient of money, whether received in the way of trade or not, to bring an instrument into existence and pay duty upon it but it seems to me that the tax which the Act imposes in such cases is in fact, although not in form, a tax upon gross receipts, the amount of the tax being measured by the amount received. The plaintiff's contentions are not, I think, met by saying that the payments and receipts with which this case is concerned are transactions which, looked at in isolation, involve no inter-State element. In my opinion the receipt by the plaintiff of moneys charged by it for freight for carrying goods inter-State is an essential element in the inter-State trade which it carries on. If that is so, then to require it to pay a tax, the amount of which is measured by the amount received, would be, in my opinion, to impose a burden upon that trade which would infringe s. 92 if it were not for the existence in the Act of s. 2A. I think some support for this view is to be found in the judgments of some of the members of this Court, and particularly in the judgment of Starke J., in A/asian Scale Co. Ltd. v. Commissioner of Taxes (Q.) [1935] HCA 23; (1935) 53 CLR 534 That case was concerned with the validity of s. 14 (4) (iv) of The Income Tax Act of 1924 of Queensland. The first paragraph of s. 14 (4) (iv) provided that the taxable income of a foreign company carrying on business in Queensland should be the amount of the profits made by it in Queensland. Where, in the opinion of the Commissioner, the amount of those profits could not otherwise be satisfactorily determined, the second paragraph of s. 14 (4) (iv) enabled him to assess the taxable income at a sum which bore the same proportion to the total profits made by the company as the sales made by it in Queensland bore to its total sales. The third paragraph of s. 14 (4) (iv) provided that in certain events the Commissioner might assess the taxable income of the company at a sum equal to seven and one half per cent of the amount of the total sales made by it in Queensland. The sales made by the company in Queensland included inter-State sales and the second paragraph of s. 14 (4) (iv) was applied by the Commissioner to determine the amount of its taxable income. It was argued that the result of applying that paragraph was to impose a tax, not upon the company's net income, but upon a proportion of its gross receipts from sales and that, to the extent that those receipts included receipts from inter-State sales, the company's inter-State trade was burdened. The argument failed since, as was pointed out by the Court, what the Act imposed was a tax upon a proportion of the company's profits, notwithstanding the fact that the amount upon which the tax was levied might, in certain circumstances, be ascertained by the use of the formula which the second paragraph of s. 14 (4) (iv) provided. But it was the making of profits that gave rise to the liability to tax and that paragraph merely provided machinery whereby in certain circumstances the amount of those taxable profits might be determined. For present purposes, the significance of the case lies in the fact that, on my reading of the judgment of Starke J., it appears to me that his Honour would have taken the view that had the tax been, as had been argued, one imposed upon and measured by the gross proceeds of sales, including inter-State sales, it would have offended against s. 92. If this was not his Honour's opinion I find it diffucult to understand why he should have been at pains, as he as, to distinguish between a tax on net income and a tax on gross receipts and, although it does not appear so plainly from the joint judgment of Rich and Dixon JJ., their Honours seem to me to have had the same distinction in mind when they pointed out, at p. 553, that the second paragraph of s. 14 (4) (iv) did not make the volume of sales made by the company a measure of the tax and that in this respect it differed from the third paragraph of s. 14 (4) (iv). That third paragraph, they said, had not been applied in making the assessment and for that reason, since it was not suggested to be inseverable from the second paragraph, it could for the purposes of the case be put aside. At pp. 556, 557, Starke J. said:

At a glance

Court

Decision date

Source

Judgment (61 paragraphs)

Associated Steamships Pty Ltd v Western Australia [1969] HCA 45; (1969) 120 CLR 92 (9 October 1969)

Parties

Cases Cited (13)