Aurora Developments Pty Ltd v Commissioner of Taxation

REASONS FOR JUDGMENT 1 In these proceedings which were heard together with the matters the subject of application QUD251 of 2008, the applicant contends, among other contentions, that the respondent has no power to amend an administrative penalty assessment once made in reliance upon s 28475(1), s 29830(1), s 28485 of the Taxation Administration Act 1953 (Cth) (the "Administration Act") with the result that once the respondent decided that the assessment was wrong, it had to be set aside in full, not simply in part, as the Commissioner purported to do, according to the applicant. The applicant contends that the Commissioner has no power under the Administration Act equivalent to the power conferred under s 170 of the Income Tax Assessment Act 1936 (Cth). 2 These reasons are to be read together with the reasons for judgment in dismissing Aurora's application in QUD251 of 2008. 3 The respondent contends by paragraph 30 of its outline of submissions dated 22 September 2009 that there can be no doubt that the Commissioner has the power pursuant to s 14ZY of the Administration Act (and the Commissioner's general powers of administration under s 3A of the Administration Act) to reduce a penalty assessment, the subject of a notice of objection, in accordance with the respondent's objection decision. The decision in this case was to reduce the penalty assessment with respect to the tax period 1 July 2004 to 31 July 2004 to an amount representing the imposition of a 25% penalty in respect of a tax shortfall in that period represented by the failure to disclose the settlement of Aurora's contract with the buyer on 2 July 2004. 4 One aspect of the question in relation to whether the Commissioner enjoys a power to amend an administrative penalty assessment once made may be the question of whether s 33(3) of the Acts Interpretation Act 1901 (Cth) confers such a power or has any relevant role to play in the determination of the scope of the Commissioner's powers conferred under the Administration Act. Section 33(3) provides: Where an Act confers a power to make, grant or issue any instrument (including rules, regulations or bylaws) the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument. [emphasis added] 5 A question might arise as to whether the imposition of an administrative penalty is effected by means of any instrument and whether s 33(3) is confined to legislative instruments or whether it extends to instruments by which administrative or executive decisions are made. That question seems to have been resolved by the decision of the Full Court of the Federal Court in Flaherty v Secretary, Department of Health and Ageing and Others [2010] FCAFC 67; (2010) 184 FCR 564 per Emmett, Rares and Nicholas JJ, by which the Court held at [61] that a notice in writing to cancel the approval of a pharmacist under s 98(3) of the National Health Act 1953 (Cth) was an instrument for the purposes of s 33(3). No submissions have been addressed by the parties as to the possible application of s 33(3) of the Acts Interpretation Act 1901 (Cth) in the assessment of the scope of the Commissioner's powers under the Administration Act. 6 Accordingly, I propose to direct the parties to file further submissions directed to that question (should they wish to do so) within 14 days. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.