Chief Commissioner of State Revenue v The Ettamogh Mob Australia Pty Ltd & Ors

REASONS FOR DECISION 1 PRESIDENT: This is an appeal by the Chief Commissioner of State Revenue (the Commissioner) from the decision of the Revenue Division of the Tribunal (the Tribunal) in The Ettamogah Mob Australia Pty Ltd & ors v Chief Commissioner of State Revenue [2005] NSWADT 22. The Tribunal dealt with an application by taxpayers for review of an assessment imposing interest and penalty in connection with a tax default. 2 The Tribunal upheld the Commissioner's assessment as it related to interest. However, the Tribunal reduced the penalty tax, as in its opinion the circumstances attracted the reduction from the prime rate allowed by s 29 of the Taxation Administration Act 1996 (the TAA). 3 The Commissioner has appealed against this part of the decision, alleging errors of law. A party is entitled, as of right and without leave, to appeal in relation to a question of law. See Administrative Decisions Tribunal Act 1997, ss 112 and 113. The Commissioner did apply for leave to extend the appeal to the merits. 4 Penalty tax is payable in respect of a 'tax default': TAA, s 25; 'tax default means a failure by a taxpayer to pay, in accordance with a taxation law, the whole or part of tax that the taxpayer is liable to pay': s 3. There is no dispute, at this point, that a tax default occurred in this case. 5 The primary rule is that the penalty tax payable is 25% of the amount of tax unpaid: s 27(1). This amount may be varied up or down, having regard to the conduct of the taxpayer in the circumstances surrounding the default, or by reference to conduct of the taxpayer after the default has been identified. 6 If the 'tax default was caused wholly or partly by the intentional disregard by the taxpayer (or a person acting on behalf of the taxpayer) of a taxation law', the Commissioner may increase the penalty to 75%: s 27(2). On the other hand s 27(3) allows the Commissioner to reduce the penalty to nil, if '(a) the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with the taxation law, or (b) the tax default occurred solely because of circumstances beyond the taxpayer's control (or if a person acted on behalf of the taxpayer, because of circumstances beyond either the person's or the taxpayer's control) but not amounting to financial incapacity.' 7 The TAA then turns its attention to taxpayer conduct that occurs in the context of a possible or actual investigation. The Commissioner's formal powers of investigation are found in the TAA at Part 9, Div 2, ss 71 ff. The Commissioner's powers to require information and to set a time for that information is found in a detailed provision: s 72. 8 Section 28 directs the Commissioner to reduce the penalty tax imposed under s 27(1) by 80% (i.e. from 25% to 5% of the tax default): 'if, before the Chief Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out, the taxpayer discloses to the Chief Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.' 9 Section 29 deals with a case where the Commissioner has launched an investigation. Under s 29 the taxpayer can have the penalty tax imposed under s 27(1) reduced by 20% (i.e. from 25% to 20% of the tax default). 10 Section 29 provides: 'The amount of penalty tax determined under section 27 is to be reduced by 20% if, after the Chief Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out and before it is completed, the taxpayer discloses to the Chief Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined.' 11 This is the provision in issue in this case. 12 It will be seen that s 29 describes in the same way as s 28 the nature of the material required to obtain the benefit of the provision - 'sufficient information to enable the nature and extent of the tax default to be determined.' 13 (How s 27(1) and s 28 inter-relate is not entirely clear. Any disclosure of 'sufficient' information (that also meets the other criteria) made before an investigation occurs would presumably receive the benefit of s 28. It would seem to be an odd result in terms of equitable treatment of taxpayers if s 28 only came into play in cases where subsequently there was in fact an investigation or there had at least been a threat of an investigation; that is, the more troublesome taxpayer might be able to get a better result (25% reduced to 5%) than the less troublesome taxpayer (whose assessment shows the prime rate, and it is paid). See further Chief Commissioner of State Revenue v Incise Technologies & anor [2004] NSWADTAP 19 at [43]-[49].) 14 The next two provisions deal with the minimum amount of penalty ($20): s 31; and time for payment: s 32. Finally, s 33 gives the Commissioner a general discretion to dispense a taxpayer from payment of penalty tax: 'The Chief Commissioner may, in such circumstances as the Chief Commissioner considers appropriate, remit penalty tax by any amount.' 15 At the end of s 30 and before s 31, the TAA has a Note. This Note has received considerable attention in the submissions of the Commissioner in this case. It is as follows: 'Note. This Table contains a summary of the provisions of sections 27-30. Prime Rate Voluntary disclosure Voluntary disclosure Concealment or hindrance in establishing underpay-ment Penalty Category % Before Investigation During investigation % % % Failure to take reasonable care but no intentional disregard of the law 25 5 20 30 Intentional disregard of the law 75 15 60 90

16 It will be seen that this Table introduces for the first time into the language of this part of the Act two words - 'voluntary disclosure'. These words have received considerable attention in this appeal. 17 The Tribunal did not have any regard to this Note. The Circumstances relevant to section 29 18 The Commissioner issued a notice of investigation to the taxpayers on 12 June 2002 (see tab 17 of bundle of documents before the Tribunal). The letter is headed 'Notice of Investigation - Taxation Administration Act'. The letter advised that the writer, Mr Adam Kmita, Senior Compliance Division, Office of State Revenue (OSR) would be attending the taxpayers' office on 15 and 16 July 2002 to undertake an audit. 19 The letter referred to the purpose of the audit and continued: 'To ensure there is as little disruption to your business as possible, it would be appreciated if all the records listed on attachment A are made available at our meeting. … Where penalties and/or interest is imposed as a result of the audit, the Taxation Administration Act 1996 will be applied in respect of pay-roll tax, land tax and stamp duty. This letter constitutes the commencement of an investigation under the Taxation Administration Act 1996. Where you discover underpayments of tax or duty and these are voluntarily disclosed to me prior to or during the audit, reductions in the level of penalties will be made. …'. 20 It will be seen that the letter itself refers to voluntary disclosure as the basis for reductions in the level of penalty. 21 The Attachment stated that the period under review covered the three previous financial years and the current financial year. The records required were described as 'pay-roll tax returns and working papers', 'pay-roll record summaries', 'employment contracts', 'group certificate summary report reconciliations for each year end', 'salary & wages reconciliations for each year', 'superannuation fund payment details', 'subcontractor information - copies of invoices', 'invoices relating to staff engaged through employment agencies', 'copy of annual financial statements - including a detailed profit and loss and notes to the accounts. If there are comparative figures then every second year will suffice', 'copy of FBT returns and working papers'. 22 While the letter did not refer specifically to s 72 of the TAA, I accept the Commissioner's submission that it constituted a notice for the purposes of s 72. It is convenient at this point to set out the text of s 72: ' 72 Power to require information, instruments and records, and attendance (1) The Chief Commissioner may require a person, by written notice, to do any one or more of the following: (a) to provide to the Chief Commissioner (either orally or in writing) information that is described in the notice, (b) to attend and give evidence before the Chief Commissioner or an authorised officer, (c) to produce to the Chief Commissioner an instrument or record in the person's custody or control that is described in the notice. (2) The Chief Commissioner must, if the requirement is made of a person to determine that person's tax liability, indicate in the notice that the requirement is made for that purpose, but the Chief Commissioner is not otherwise required to identify a person in relation to whom any information, evidence, instrument or record is required under this section. (3) The Chief Commissioner may require information or evidence that is not given orally to be provided in the form of or verified by statutory declaration. (4) The Chief Commissioner may require evidence that is given orally to be given on oath or by affirmation and for that purpose the Chief Commissioner or an authorised officer may administer an oath or affirmation. (5) A person who is required to attend and give evidence orally is to be paid expenses in accordance with the scale of allowances to witnesses in force for the time being under the rules of the District Court. (6) Subsection (5) does not apply to a person, or a representative of a person, whose liability under a taxation law is being investigated by the Chief Commissioner. (7) The Chief Commissioner may make a recording, by such means as the Chief Commissioner determines, of the evidence given orally by a person. (8) The person to whom the notice is given must comply with the notice within such period as is specified in the notice or such extended period as the Chief Commissioner may allow. Maximum penalty (subsection (8)): 100 penalty units.' 23 This notice belonged, as would be typical of cases where formal notices are issued, to a broader history of dealings between the Commissioner and the taxpayers. This history is set out at various points of the Tribunal's reasons. 24 The history shows that the taxpayers first had discussions over their pay-roll tax situation with the OSR in May 1998. They subsequently registered for pay-roll tax. The taxpayers had a belief that they might be entitled to certain concessions. It transpired that they were not entitled to concessions, and faced a liability. Notices of assessment issued on 21 and 24 August 2000 for a total amount of approximately $81,000. On 29 August 2000 an accountant, acting on behalf of the Applicant, acknowledged that there was a pay-roll tax debt and sought a payment plan. On 24 November 2000 the taxpayers agreed to a repayment plan ($10,000 immediately (paid) following by $8000 a month). The Tribunal noted at para [5] that the assessments at that time did not include any penalty tax. 25 By June 2002, the taxpayers had only paid $58,000; from which I infer they that had not been able to honour their original commitment. By June 2002, according to the Tribunal, the taxpayers had also failed to lodge a number of returns. These circumstances provide at least part of the background to the issuance of the notice dated 12 June 2002. The investigation led to amended assessments being issued, dated 11 February 2003. It is the taxpayers' objections to those assessments that have led to these proceedings. As at August 2004, the taxpayers informed the Tribunal that the primary liability had reached $408,729.64, penalty tax has been applied in the sum of $82,929.44, market rate of interest in the sum of $35,781.74 and premium rate of interest in the sum of $56,596.04. The Tribunal's Reasons 26 The Tribunal began by examining the question of whether s 28 was applicable. It said: '18 … On discovering that Pay-Roll Tax was payable [this is a reference to the event of August 2000], the Applicant accepted that tax was due and entered into a payment plan which should have continued whilst further returns should have been lodged in the usual manner as time passed. The Applicant, after discovering the liability, did not comply with the requirements of the taxation law. The Applicant attended to expanding business operations and although compliance was a further business impost, the circumstances of non-compliance were not beyond the group's control. … 20 … The Applicant was not diligent in attending to lodgement of returns during the period from the assessments up to the time of the audit. This had the effect of triggering the audit undertaken on 15 and 16 July 2002 and then the issue of subsequent assessments. As the Applicant had not disclosed sufficient information to the Chief Commissioner to enable the nature and extent of the tax default to be determined prior to the audit then Section 28 does not apply.' 27 The Tribunal then went on to consider the application of s 29, and said: '21 … In this instance during the course of the investigation the Applicant disclosed sufficient information to permit the Chief Commissioner to determine the nature and extent of the tax default. Accordingly the provisions of Section 29 apply. … 23 In view of the disclosures made by the Applicant and the co-operation of the Applicant during the audit the penalty tax should have been reduced in accordance with Section 29.' 28 The Tribunal's only discussion of what occurred after issuance of the notice of investigation appears at paras [9] and [10]: '9 On 15 and 16 July 2002 the Applicant was audited. This audit was triggered automatically as a result of non-lodgement of a large number of returns. The Applicant co-operated with the Respondent and offered to make further instalment payments. Mr O'Brien, the sole director of 3 of the companies, was present during the audit undertaken by two officers from the Respondent. At that time Mr O'Brien was advised that there was no automatic setoff against Pay-Roll Tax liabilities and that any concessions may only be by formal refund. Mr O'Brien attested that he was told by one of the officers, when he enquired as to whether the Applicant should start paying monies against the outstanding Pay-Roll Tax liabilities: "No, wait until you receive the assessment." 10 At the time of the audit in July 2002 there was already an amount of Pay-Roll Tax outstanding. The payments which were being made, under cover of a copy of original assessments ceased in June 2002. At a later stage further payments were made against outstanding Pay-Roll Tax prior to the assessments being issued. After the assessments issued following the audit a further amount of Pay-Roll Tax was paid. Mr O'Brien believed that the monies that had been paid would have been credited against the Pay-Roll Tax outstanding firstly and, if any money over, then against interest. In any event the monies paid by the time of the audit, pursuant to the payment plan, did not cover the Pay-Roll Tax then outstanding. Interest continued to accrue on the outstanding sum.' Grounds of Appeal 29 The notice of appeal asserted that the Tribunal erred: · In finding for the purposes of s 29 that the taxpayer disclosed, during the course of the investigation, sufficient information to permit the Chief Commissioner to determine the nature and extent of the tax default (para [21]). · In finding that the taxpayer had satisfied the requirements of s 29 so as to reduce the penalty tax (para [21]). 30 On their face, as submitted by the respondents in their notice in reply, these are mere challenges to the fact-finding process, and raise no error of law. The same is true of the way the Commissioner initially formulated his case in opening submissions at hearing - his submission was that there were no extenuating circumstances of a kind that brought the conduct of the taxpayer within the scope of s 29. 31 Counsel for the Commissioner was invited to explain how the two points of appeal found in the notice of appeal could be said to raise an error of law. As we understand his reply to the request, the questions of law might be listed as follows: (a) misinterpretation of the meaning of s 29, when read in conjunction with s 30 and the Note forming part of the endnote to s 30; (b) leading to a misapplication of the law to the facts; (c) with the result, that there is no evidence to justify the Tribunal's decision; (d) alternatively, lack of adequate reasons; (e) alternatively, miscarriage of discretion, failure to take account of relevant considerations. Adequacy of Reasons 32 It will be seen that para [9] casts the taxpayers' responsibility in terms of 'co-operation', a term not used in s 29, and finds co-operation, but does not spell out in what way the taxpayers 'co-operated' with the Commissioner. The text of paras [9] and [10] mainly focuses on communications said to have occurred as between Mr O'Brien (the principal in most of the dealings with the OSR on behalf of the taxpayers) and the OSR staff. It does not address the specific matters required to be addressed by s 29 - whether there was 'sufficient' information provided, and whether that enabled the 'nature' and 'extent' of the tax fault to be determined. It does not set out the relevant evidence. 33 There was clearly in my view a failure to give adequate reasons. Such a failure constitutes an error of law: Azzopardi v Tasman UEB Industries Ltd [1985] 4 NSWLR 139; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; and Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430; and see Administrative Decisions Tribunal Act 1997, s 89. 34 There remains the question of whether the decision should be set aside. 35 Before turning to that question, I will consider two other questions of law raised by the grounds of appeal. Does Section 29 confer a Discretion on the Commissioner? 36 The Commissioner's primary submission is that s 29 confers on the Commissioner a discretion to grant or refuse a reduction. The Commissioner said that the following were the kind of factors that might for him give rise to the favourable application of s 29: (a) a degree of the co-operation and assistance to the process of investigation which went beyond mere compliance with the s 72 notice, (b) the extent of any voluntary disclosure, (c) the degree to which the taxpayer's co-operation and responsiveness to the notice has saved the Commissioner time and resources, and (d) in the context of payroll tax, this element requires the furnishing of the equivalent information that would be required to be furnished to the Chief Commissioner by way of a payroll tax return under s 13(1) Pay-roll Tax Act 1971 (NSW) ('PA'). Such information would include the wages which would be liable to payroll tax for each month and the calculation of the relevant imposition of payroll tax on such wages in accordance with ss 6 and 7 PA. 37 The Commissioner saw this case as one which had involved mere compliance by the taxpayer with a notice given under s 72; and this was not enough to justify any reduction of the prime rate, applying s 29. 38 The word 'may', the word most commonly found in statutory provisions conferring a discretion, does not appear in s 29. The section commences by directing the Commissioner to pass on the reduction (the amount 'is to be reduced') if, before the investigation is completed, certain matters of fact have been demonstrated. While the words 'sufficient', 'nature' and 'extent' are words of some elasticity, the inclusion of words of elasticity in a provision does not, in my view, make the provision, read as a whole, a discretionary provision. 39 The provisions from ss 27 to 33 only on three occasions use the usual language of discretion or choice. Section 27(1) states the basic rule, then s 27(2) states that the Commissioner 'may' increase the penalty in instances of intentional disregard, and in s 27(3) states that he 'may' do the same in cases where there was no failure to take reasonable care. The next time the word 'may' appears is in connection with the residual discretion found at s 33, previously quoted. The word 'may' is, of course, not conclusive of the issue. It seems to me to be at least arguable that s 27(2) and s 27(3) lay down rules despite the presence of the word 'may': see further, Samad v District Court of NSW (2002) 76 ALJR 871. 40 By contrast, s 28 and s 29 use rule-like language. Both commence with the words 'the amount of penalty tax … is to be reduced' followed by the setting out of certain circumstances. 41 In my view, there is nothing in the scheme of the provisions to suggest that s 29 gives the Commissioner a discretion. The Commissioner is, I consider, directed by the Parliament to apply a reduction once certain circumstances are established. Clearly there is some room for debate as to what in a particular situation will be 'sufficient' information to enable the 'nature' and 'extent' of the tax default to be determined. 42 Once the circumstances to which s 29 relates are found to exist, the rule must be applied. My view is similar to that reached by Harper J of the Victorian Supreme Court, dealing with a similar Victorian provision in American Express International Inc v Commissioner of State Revenue [2003] VSC 32: see further Seve JM's decision at [89]. Does s 29 incorporate the concept of 'voluntary disclosure'? 43 The second line of argument is that, despite any reference in the provision to the making of 'voluntary disclosure' by the taxpayer as a relevant circumstance, nonetheless the provision, properly construed, allows the Commissioner to refuse to give a reduction if the taxpayer has not voluntary disclosed information sufficient to enable the nature and extent of the tax default to be determined. In the Commissioner's view, the provision might apply if the taxpayer had, after receiving the notice of investigation, communicated with the OSR in a substantive and helpful way, going beyond the tender of a bundle of documents to an audit. 44 In support of this argument, the Commissioner relies on the words appearing in the Note at the top of the Table over the column dealing with ss 28 and 29 - 'voluntary disclosure' - as indicating what s 29 is seeking to address. The Commissioner sees the present case as one involving 'compelled disclosure' not 'voluntary disclosure'. In his view, nothing was done by the taxpayers in the way of self-reporting. The taxpayers merely supplied documents and left it up to the OSR staff to sort out the situation. 45 As to the relevance of notes to the construction of the legislation, TAA, s 3(2) provides: '(2) Notes in the text of this Act do not form part of the Act.' The Interpretation Act 1987, s 34(2)(a) does allow text of a kind which appears in the officially published statute extraneous to the statutory provisions to be considered in the interpretation of a statute. Section 34(1) provides as to extrinsic material generally: '(1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable. 46 There appears to be no ambiguity about the words of s 29. The major operative words triggering the duty to pass on the reduction are vague - ' sufficient', 'nature' and 'extent' - but they are not affected by ambiguity. So the use of the Note for the purpose of resolving an ambiguity is not required. 47 The case-law going to the use of notes mainly concerns the weight or importance to be given to marginal notes. They have generally been seen as of limited value in dealing with issues of construction: see generally, Pearce & Geddes, Statutory Interpretation (5th ed. 2001) [4.47]; The Ombudsman v Moroney [1983] 1 NSWLR 317 at 325 per Street CJ. 48 A Note of the kind under consideration in this case is of a more substantial kind than a marginal note, and reflects a trend often found in the drafting of modern statutes. It is now not uncommon to see devices such as tick-lists, lists of questions, and tables summarising provisions to appear in statutes. Nonetheless it is not possible, I consider, to go so far as the Commissioner in effect suggests and read the words 'voluntary disclosure' into the text of s 29. 49 The Commissioner also refers in support of his case to Commonwealth tax law and practice. He referred to the Australian Taxation Office (ATO) guidelines issued in relation to in-audit co-operation. They operate against the background of statutory provisions which plainly vest a discretion in the federal Commissioner of Taxation in relation to various types of default. Section 226Y of the Income Tax Assessment Act 1936 (Commonwealth) is a typical provision: ' Reduction of penalty tax - disclosure after tax audit notified If: (a) under a shortfall section a taxpayer is liable to pay additional tax in respect of a year of income because of a tax shortfall or part of a tax shortfall; and (b) after the Commissioner had informed the taxpayer that a tax audit relating to the taxpayer in respect of the year was to be carried out, the taxpayer voluntarily told the Commissioner, in writing, about the shortfall or part; and (c) telling the Commissioner could reasonably be estimated to have saved the Commissioner a significant amount of time or significant resources in the audit; the amount of the additional tax is reduced by 20%.' 50 This provision expressly refers to 'voluntary disclosure'; and also incorporates the other factor of importance to the Commissioner, co-operation resulting in the saving of significant time or significant resources. 51 The ATO Ruling seeks to explain how the rule in s 226Y is to be applied (TR 94/6). In dealing with disclosures made after being informed of a tax audit, at [39] it gives these as relevant considerations: · That the provision of information is in writing, and brings all the relevant facts and other information to the attention of the Commissioner that will allow the Commissioner to readily identify the amount and nature of the shortfall · That it is made voluntarily · It could be reasonably be estimated to have saved the Commissioner a significant amount of time or resources in the audit. 52 As to what is to be understood to be involved in the meaning of 'voluntary' in this context, the Ruling states at [41-42]: '… [I]n addition to what has already been discussed separately in respect of disclosures before audit (see [29-36]), it is clear that the word 'voluntary' in the context of disclosure after notification of an audit includes a disclosure by a taxpayer that may have been prompted in an indirect way by the audit. For example, disclosures outside the scope of an audit. 'Voluntary' in this context presupposes a level of co-operation and assistance by the taxpayer that is well above that ordinarily expected of taxpayers during the conduct of an audit. The requirement that a disclosure be voluntary is closely related to the requirement that the disclosure could reasonably be estimated to result in a significant saving in time or resources taken to conduct the audit. However, a taxpayer who merely 'comes clean' when caught should not be accepted as having made the disclosure voluntarily, for example, where the tax shortfall disclosed is the same kind of subject matter that is within the scope of the audit.' 53 This Ruling clearly responds to the Commonwealth Parliament's direction to the federal Commissioner as reflected in s 226Y. 54 I am not satisfied that s 29 occupies the same ground as the Federal s 226Y. 'In Writing' 55 Section 29 uses the expression 'in writing' in connection with the word 'information'. It might possibly be argued that this expression refers to some form of active communication by the taxpayer to the Commissioner which involves the giving of 'information' that goes beyond merely making available, as here, in an orderly way business documents for use by investigators. In my view the requirement that the 'information' be in writing goes no further than simply to exclude from consideration information provided orally. Conclusions 56 The determination of whether a taxpayer has given 'sufficient information' is a classic question of fact. The word 'sufficient' is the key word. The word is a natural one, with a very flexible connotation, e.g. see the Macquarie Dictionary definition '1. that suffices; enough or adequate'. It is a broad expression. 57 The material before the Tribunal discloses that when the OSR officers attended on 15 and 16 July 2002, the taxpayers provided them with binders of their business documents responding to the list given in Attachment A of the notice of investigation. The auditors spent two work days at the taxpayers' premises. 58 The Commissioner's submissions on appeal acknowledge that "All assistance was provided to the OSR officers during their attendance at [the taxpayer's] offices and [on behalf of the taxpayer] Mr Jackson assisted in providing information to the OSR auditors and clarification, as needed." It is this submission to which, I think, the Tribunal was referring when it spoke of 'co-operation' in its reasons. The relevant evidence may be found at Tab 17 of the Bundle, the affidavit of Leigh Christopher O'Brien sworn 7 July 2004 (paragraphs 18-27) and the affidavit of David Jackson sworn 7 July 2004 (paragraphs 12-15). 59 The substance of this evidence is that on 12 June 2002, the taxpayer was informed that an audit of the companies would occur on 15 and 16 July 2002. The audit occurred on those days. Messrs O'Brien and Jackson were present during the course of the audit. All assistance was provided to the OSR officers during their attendance at Ettamogah's offices and Mr Jackson assisted in providing information to the OSR auditors and clarification, as needed: paragraph 25 affidavit of Leigh O'Brien and paragraph 13 affidavit of David Jackson. There has not been any dispute that the information that was provided proved to be sufficient to enable the OSR staff to issue the amended notices of assessment. 60 On the facts as presented to the Tribunal, the conclusion is inescapable, based on my construction of s 29, that the taxpayers were entitled to the reduction. This is not a case where the error of law identified, serious as it is - failure to give adequate reasons, has resulted in any substantial injustice. 61 The real grievance of the Commissioner, as I understand his case, is that the Office had actually to commence the audit before it received all the information. On the other hand, the letter sent on 12 June 2002 could just as easily have been interpreted by the recipient as only asking the recipient to have that material there on the day of the audit, which they did. It may be that, despite the Commissioner's belief that the provision is addressed to conduct going beyond mere compliance with a notice of investigation, that is all the legislature was seeking to achieve. The fact of 'mere compliance' saves resources in the sense that the Commissioner is not forced to go on any further. 62 I regard the considerations raised by the Commissioner as all understandable ones. I am sympathetic to the position of the Commissioner, but I do not think the text of s 29 achieves the end that he advocates, one which is clearly achieved by Federal tax law. 63 In my opinion, no error of law sufficient to warrant setting aside the decision has been identified. The appeal should be dismissed. 64 JUDICIAL MEMBER SEVE: The Commissioner has submitted that 'disclosure' in s 29 of the Taxation Administration Act 1996 (TAA) should be interpreted to mean 'voluntary disclosure' in a narrow sense, of not being compelled, based on the use of the words 'voluntary disclosure' in the Table in the Note after s 30 of the TAA. 65 Section 3(2) of the TAA provides as follows: 'Notes in the text of this Act do not form part of the Act.' In addition, s 35(2)(c) of the Interpretation Act 1987 (Interpretation Act) provides that a footnote or endnote in an Act shall be taken not to be part of the Act. (The exceptions in sub-sections (3) and (4) of s 35 are not relevantly applicable.) The Note and Table in the Note after s 30 of the TAA are clearly extrinsic material to the TAA. Use of Extrinsic Material 66 Section 35(5) of the Interpretation Act provides that s 35 does not limit the application of s 34 in relation to the use of any heading, marginal note, footnote or endnote in the interpretation of the provision to which the heading, marginal note, footnote or endnote relates. 67 Section 34(1) of the Interpretation Act provides that in the interpretation of a provision of an Act, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: '(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act and the purpose or object underlying the Act), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable'. 68 Section 15AB of the Acts Interpretation Act 1901 (Commonwealth) is almost identical to s 34 of the Interpretation Act. Section 15AB of the Acts Interpretation Act 1901 was considered in the context of s 40 of the Insurance Contracts Act 1984 in Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 . In that case, McHugh J held: 'Section 15AB permits a liberal use of many forms of extrinsic material. But the section has its limits. Recourse to extrinsic material under s 15AB is legitimate only if s 40 of the Act is 'ambiguous or obscure', for it cannot be said that the ordinary meaning conveyed by the text of that section 'is manifestly absurd or is unreasonable.' Moreover, under s 15AB the ambiguity must arise from the words themselves before recourse to the extrinsic material is permitted, and the literal meaning of s 40(1) is neither ambiguous nor obscure. Section 15AB therefore does not assist the Council in its endeavour to use the extrinsic material to shape the meaning of s 40. Nothing in that section gives any support to the notion that the extrinsic material to which it refers can be used to demonstrate ambiguity in the legislative provision.' 69 Nothing manifestly absurd or unreasonable or ambiguous or obscure relevantly arises in the context of s 29 of the TAA. Equally, it can not be said that the words 'voluntary disclosure' in the Table in the Note after s 30 confirm the 'ordinary meaning' conveyed by the text of the provision. Indeed, the word 'voluntary' has itself been held to be capable of having more than one meaning, indicating that it is not an entirely certain expression and therefore does not itself necessarily have an 'ordinary' meaning. In Savoy Overseers v Art Union of London [1895-9] All ER Rep 702 [1896] AC 296, Lord Halsbury LC held at 305: 'My Lords, there is no doubt that the word 'voluntary' is constantly used in two different senses: it is constantly used as the antithesis of something done under compulsion; but it is also used commonly among lawyers - and not uncommonly among other people - as denoting the obtaining or giving something without anything being obtained in return. A lawyer speaks of a voluntary conveyance as opposed to one which involves valuable consideration. It is common to hear of some institution supported by voluntary contributions'. 70 Section 34(1) of the Interpretation Act is therefore inapplicable in this case. 71 However, the matter does not end there. The modern approach to statutory interpretation permits recourse to extrinsic material beyond the circumstances of s 34 of the Interpretation Act, in certain other circumstances. In CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, Brennan CJ, Dawson, Toohey and Gummow JJ held at 408: 'It is well settled that at common law, apart from any reliance upon s15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy.' (references omitted) 72 In Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 after rejecting the submission that s 5AB of the Acts Interpretation Act 1901 applied, but determining, in reliance on CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 that extrinsic material could still be considered, McHugh J stated: ' Extrinsic material cannot be used to construe a legislative provision unless the construction of the provision suggested by that material is one that is 'reasonably open'. Even if extrinsic material convincingly indicates the evil at which a section was aimed, it does not follow that the language of the section will always permit a construction that will remedy that evil. If the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances. As Brennan CJ and I said in IW v City of Perth (1997) 71 ALJR 943 at 947; 146 ALR 696 at 702, even when a court adopts a purposive construction to remedial legislation it 'is not at liberty to give it a construction that is unreasonable or unnatural'. Nevertheless, when the purpose of a legislative provision is clear, a court may be justified in giving the provision 'a strained construction' to achieve that purpose provided that the construction is neither unreasonable nor unnatural. If the target of a legislative provision is clear, the court's duty is to ensure that it is hit rather than to record that it has been missed. As a result, on rare occasions a court may be justified in treating a provision as containing additional words if those additional words will give effect to the legislative purpose. In Jones v Wrotham Park Estates (1991) 25 NSWLR 400, Lord Diplock said that three conditions must be met before a court can read words into legislation. First, the court must know the mischief with which the statute was dealing. Second, the court must be satisfied that by inadvertence Parliament had overlooked an eventuality which must be dealt with if the purpose of the legislation is to be achieved. Third, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect.' (references omitted) 73 An extract from the decision of McHugh J in Newcastle City Council v GIO General Limited was cited with approval by the majority of the High Court (McHugh ACJ, Gummow and Hayne JJ) in Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 205 ALR 1 when restating 'several of the relevant principles or precepts of statutory interpretation' (at 10 and 11). Application of these Principles 74 The three conditions stated by Lord Diplock in Jones v Wrotham Park Estates (1991) 25 NSWLR 400 as cited by McHugh J in Newcastle City Council v GIO General Limited (1997) 191 CLR 85 are relevant to this case since the submission of the Commissioner effectively seeks to read the word 'voluntary' into s 29, before the word 'disclosure'. Lord Diplock's three conditions are not all satisfied in this case. 75 First Condition: First, the Tribunal must know the mischief with which the statute was dealing. The mischief with which s 29 of the TAA appears to be dealing is, to create, during an investigation, an incentive for defaulting taxpayers to enable enforcement costs to the revenue to be saved - that is, to reward defaulting taxpayers for co-operating to the point of enabling the nature and extent of tax defaults to be determined during an investigation. 76 Second Condition: Second, the Tribunal must be satisfied that by inadvertence, Parliament overlooked an eventuality which must be dealt with if the purpose of the legislation is to be achieved. It is not at all clear that there has been any inadvertence by Parliament or that Parliament overlooked an eventuality in the context of s 29 and this case. The Commissioner has submitted that 'disclosure' in s 29 should be interpreted to mean 'voluntary disclosure' in a narrow sense (of not being compelled). This interpretation will result in s 29 being unavailable to taxpayers who may not be aware of their tax liabilities. There is nothing in the TAA or in the extrinsic material to which the Appeal Panel has been referred that unequivocally supports that this was a purpose or objective of s 29. To the contrary, as aforementioned, the objective of s 29 appears to be to reward taxpayers for co-operating to the point of enabling the nature and extent of tax defaults to be determined during an investigation. That is, taxpayers who may be ignorant of their own tax defaults and who only become aware of the nature and extent of their own tax defaults by co-operating with the specific requests made by the Commissioner during an investigation, are entitled to a 20% reduction in their penalty tax liability under s 29. 77 The interpretation of s 29 submitted by the Commissioner distinguishes between taxpayers who, during an investigation period, disclose in writing, sufficient information to enable the nature and extent of a tax default to be determined: · 'before' being requested or required by the Commissioner to do so; as distinct from · 'upon' being asked or required by the Commissioner to do so. 78 The Commissioner's interpretation makes s 29 available in the former but not in the latter case. There is nothing in the ordinary meaning of s 29 that requires such a distinction. Section 29 simply refers to the disclosure in writing of sufficient information by the taxpayer to the Commissioner 'before' the investigation is completed. Section 29 does not specify that the disclosure must be made 'before' the taxpayer is asked or required by the Commissioner to do so. 79 From the simple language used in s 29, the only temporal conditions required to be satisfied for that section to apply are that the (sufficient and written) disclosure be made: 'after' the Commissioner informs the taxpayer that an investigation is to be carried out; and 'before' the investigation is completed. 80 The Commissioner's interpretation effectively requires that a third temporal condition be added into s 29, namely, that the sufficient and written disclosure must be made before the Commissioner requests or requires it be produced. If this additional temporal condition was intended, the legislature could easily have stated it, just as it did with the two express temporal conditions actually included in s 29. However, such a third temporal condition is not included in s 29. 81 The Table in the Note to s 30 is also only expressed to be a 'summary' of ss 27-30. The Table can not be construed or relied upon as an exhaustive explanation of ss 27-30. An example of this is that under s 30 (2)(b), penalty tax may be increased by 20% in circumstances where there is no active 'concealment or hindrance' namely, where a taxpayer 'fails (without reasonable excuse)' to comply with a s 72(1) notice and yet, this circumstance is not addressed in the Table. Neither the word 'voluntary' nor 'concealment' is used in ss 27-30 of the TAA and yet those words are used in the Table summary of those sections. Neither word contradicts the words actually chosen by the legislature in that each can be construed as a sub-set of the circumstances contemplated by the respective sections to which they relate. The words 'voluntary disclosure' in the Table can be narrowly construed, as a sub-set of 'disclosure' in s 29 (and s 28), or, liberally construed (in the context of a continuing tax default) as any 'disclosure' as used in s 29 (and 28). 82 Third Condition: Third, the Tribunal must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect. Since the second condition is not satisfied, it is not possible for this condition to be satisfied in this case. 83 Result: Since the three conditions stated by Lord Diplock and endorsed by McHugh J are not all satisfied, this Tribunal would not be justified in treating s 29 as containing the additional word 'voluntary' before 'disclosure'. Furthermore, it is not at all clear that the legislative purpose was to limit s 29 to a narrow concept of 'voluntary disclosure'. To construe s 29 as limited to a narrow concept of 'voluntary disclosure' in circumstances where the actual language used in s 29 is 'disclosure' and not 'voluntary disclosure' would be unreasonable and unnatural and therefore contrary to the principles of statutory construction as stated by the High Court. 84 If, as a question of fact, a taxpayer discloses to the Commissioner in writing, sufficient information to enable the nature and extent of a tax default to be determined after being informed of an investigation and before completion of the investigation, there is nothing in the ordinary meaning of s 29 the disclosure is made in compliance with a notice or request from the Commissioner. 85 'Disclosure' in s 29 can not be limited to a narrow concept of 'voluntary' disclosure in the sense of not being compelled to disclose. This is because this would mean that s 29 could rarely apply. This is because the section relates to determination of the nature and extent of a tax default. If a document statement or return required to be lodged under a relevant taxation law has been properly lodged, the nature and extent of a tax default will usually be capable of being determined. 86 In many cases, the reason why the nature and extent of a tax default can not be determined is because a document statement or return required to be lodged under a relevant taxation law has not been lodged. In such cases, unless and until such document statement or return is lodged, the taxpayer is liable for a continuing offence under s 57 of the TAA. If the Commissioner's interpretation is accepted, the existence of such an offence precludes the taxpayer from ever being eligible for the benefit of ss 28 or 29 since, in such circumstances, no disclosure by the taxpayer could ever be 'voluntary' because it is compelled. This is an unreasonable result that is contrary to the actual language used in ss 28 and 29 and there is no clear evidence that it was intended. 87 Accordingly, the Note and Table can not be used to construe s 29 as limited to a narrow concept of 'voluntary disclosure' because such a construction is not one that is reasonably open. 88 In any particular case, it is a question of fact as to whether there has been disclosure to the Commissioner in writing of sufficient information to enable the nature and extent of a tax default to be determined before completion of an investigation. Whether or not such disclosure is in compliance with a notice or request from the Commissioner is irrelevant. No discretion 89 Section 29 of the TAA is not a discretionary provision. Sections 31(1) and 31(2) of the Taxation Administration Act 1997 (Vic) are worded identically to ss 28 and 29 of the TAA. In American Express International Inc v Commissioner of State Revenue [2003] VSC 32, Harper J held as follows (at 61and 62) (emphasis added): '61. Some guidance of particular relevance in the present circumstances is, it seems to me, given by s.31 of the Act. It provides that, where the taxpayer - before an investigation by the respondent is carried out - discloses sufficient information to enable the nature and extent of a tax default by that taxpayer to be determined, the amount of penalty tax 'is to be reduced' by a fixed percentage: 80% if the information is disclosed before the taxpayer is told that an investigation is to be carried out; 20% if the information is disclosed after news of the investigation has broken It is significant, it seems to me, that these reductions are to be made even if the tax default was deliberate. At this point in the exercise, the respondent has no discretion; the reduction cannot be less than the percentage specified. But, since the respondent may 'remit penalty tax by any amount' pursuant to s.35, he or she could if the default was innocent impose penalty tax of less than 20% and thus, in effect, increase the reduction. This discretion is mirrored by that conferred upon the Commissioner by s. 30(2). He or she may 'increase the amount of penalty tax payable in respect of a tax default to 75% of the tax of the amount of tax unpaid if the Commissioner is satisfied that the tax default was caused...by the intentional disregard by the taxpayer...of a taxation law.' As far as I can tell, the legislation does not take into account the circumstance that an intentional default may be followed by disclosure before the respondent informs the taxpayer that an investigation is to be carried out. Perhaps the 80% reduction must follow regardless. But that is a matter for others to ponder.' 90 Provided a taxpayer discloses in writing sufficient information to enable the nature and extent of a tax default to be determined, the amount of penalty tax 'is to be reduced' by the fixed percentage of 20% under s 29 of the TAA. Disclosure 'in writing' 91 Section 21(1) of the Interpretation Act provides that in any Act: ''writing' includes printing, photography, photocopying, lithography, typewriting and any other mode of representing or reproducing words in visible form.' 92 No apparent contrary intention to this definition appears in the TAA to exclude the definition under s 5 (2) of the Interpretation Act. 93 If a taxpayer provides to the Commissioner, printed or photocopy material or other writing which reveals sufficient information to enable the nature and extent of a relevant tax default to be determined, the taxpayer will have made a disclosure to the Commissioner in writing within s 29 so long as the writing is provided: · after the Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out; and · before the subject investigation of the Commissioner is completed. 94 If the printed or photocopy material or other writing which reveals sufficient information to enable the nature and extent of a relevant tax default to be determined is provided by the taxpayer to the Commissioner before the Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out, s 28 is applicable. Investigation 95 Section 3(1) of the TAA defines 'investigation' as an investigation under Division 2 of Part 9. Section 72 forms part of Division 2 of Part 9. Under s 72(1), the Commissioner may require a person, by written notice to do any one or more of the following: '(a) to provide to the Chief Commissioner (either orally or in writing) information that is described in the notice, (b) to attend and give evidence before the Chief Commissioner or an authorised officer, (c) to produce to the Chief Commissioner an instrument or record in the person's custody or control that is described in the notice.' 96 If, in response to and in compliance with a notice from the Commissioner under s 72(1) of the TAA, a taxpayer provides to the Commissioner, writing which reveals sufficient information to enable the nature and extent of a relevant tax default to be determined, the taxpayer will have made a disclosure to the Commissioner in writing within s 28 if the writing is provided before the Commissioner has informed the taxpayer that an investigation relating to the taxpayer is to be carried out, or within s 29 if the writing is provided after the Commissioner has informed the taxpayer that an investigation relating to the taxpayer is to be carried out and before the investigation is completed. 97 A notice under s 72(1) may include information to a taxpayer that an investigation is to be carried out but equally, it may not do so. It is a question of fact as to how the s 72(1) notice is drafted in each particular case. If a s 72(1) notice that is served on a taxpayer does inform a taxpayer that an investigation is to be carried out, this clearly means that s 28 can no longer be applicable (because disclosure in writing can no longer be made 'before' the Commissioner has informed the taxpayer of the investigation). However, the fact that a s 72(1) notice that is served on a taxpayer informs a taxpayer that an investigation is to be carried out, does not mean that s 29 can not be applicable. 98 So long as the taxpayer discloses in writing sufficient information to enable the nature and extent of a relevant tax default to be determined before the investigation is 'completed', the taxpayer will have made a disclosure within s 29. For the reasons given earlier, the fact that a taxpayer makes such a disclosure in writing in response to a request from the Commissioner, whether made in the s 72(1) notice or otherwise, does not affect the position and is irrelevant. Scheme for Penalty Tax under the TAA 99 Section 30 of the TAA applies to the same period to which s 29 applies, namely, after the Commissioner has informed the taxpayer that an investigation is to be carried out and before the investigation is completed. Section 30(2)(b) provides that if a taxpayer refuses or fails (without reasonable excuse) to comply with a requirement made by the Commissioner under Division 2 of Part 9 for the purposes of determining the taxpayer's tax liability, the amount of penalty tax determined under s 27 is to be increased by 20%. 100 If a taxpayer refuses or fails (without reasonable excuse) to comply with a requirement made by the Commissioner under s 72(1) (in Division 2 of Part 9) of the TAA to provide information, penalty tax payable by the taxpayer under s 27 will be increased by 20% under s 30. On the other hand, if the taxpayer, in compliance with a requirement under a s 72(1) notice provides, in writing, the information and, as a question of fact, such information is sufficient information to enable the nature and extent of the tax default to be determined, then: · not only is there no increase by 20% under s 30 in the penalty tax payable; but · under s 29 of the TAA, there is a decrease by 20% in the penalty tax payable. 101 This is consistent with the scheme for penalty tax in s 27 of the TAA. If a taxpayer satisfies the Commissioner that the taxpayer took reasonable care to comply with a taxation law (as distinct from intentionally disregarding it as referred to in s 27(2)) then: · not only can there be no increase in penalty tax (from 25% to 75%) under s 27(2); but · pursuant to s 27(3), the 25% penalty tax under s 27(1) can be removed altogether. 102 The interpretation of s 29 submitted by the Commissioner would disrupt this consistency in the scheme for penalty tax under the TAA. This adds to the reasons earlier given, as to why the interpretation of s 29 submitted by the Commissioner is not accepted. Further Comments 103 The following more specific comments are provided in relation to the matters raised at para [17] of the Commissioner's written submissions. 104 (a). The submission is: 'The note and table that appears between ss 30 and 31 TAA can be used as aids to the interpretation of the provisions of Part 5 Division 2 TAA: para [49] Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19 ("Incise")'. 105 Incise is not authority that the note and table that appears between s 30 and s 31 of the TAA can be used as aids to the interpretation of the provisions of Part 5 Division 2 TAA in every case. At paragraph 49 of Incise, it was held that: "This understanding is also supported by the Note and Table that appears between s 30 and s 31 of the TA Act". That is, the Note and Table after s 30 was used to confirm that the meaning of the provision (s 28) was the ordinary meaning conveyed by the text of the provision. This was an application of s 34(1)(a) of the Interpretation Act which, for the reasons earlier given, is not applicable in this case. 106 (b). The submission is: 'Section 29 TAA was interpreted in Incise as meaning "in-investigation co-operation": para [48] Incise. To "co-operate" is to work together to achieve the same end and not, it is submitted, merely to comply with someone else's requirements or instructions'. 107 To 'co-operate' can also mean to be compliant. An example of this is in RVO Enterprises Pty Ltd as trustee for the R M O'Mara Family Trust v Chief Commissioner of State Revenue [2004] NSWADT 64 where Verick JM held [at 28]: '28 Because the applicant has co-operated and provided sufficient information to enable the respondent to determine its pay-roll tax liability after it commenced compliance inquiries, the respondent has properly reduced the penalty tax under s 29 by 20%.' 108 There is nothing in Incise to indicate that a taxpayer does not 'co-operate' by complying with requirements or instructions of the Commissioner. 109 (c) and (d). These submissions go to the question of whether s 29 is qualified by the words 'voluntary disclosure', a matter which I have addressed earlier in these reasons. 110 (e). The submission is: 'It has been held in the context of the payment of penalty tax in respect of payroll tax in the Australian Capital Territory, that, in substance, if the disclosure "when it occurred was no more than a belated fulfilment of [a taxpayer's] legal obligations" then it does not constitute a voluntary disclosure to attract a remission of the payment of penalty tax for late payment of payroll tax: Re Ausco International Pty Limited v Commissioner for ACT Revenue (1993) 27 ATR 1143 at 1135' ('Re Ausco'). 111 There are at least two problems with this submission. First, Re Ausco was a case relating to a predecessor to the current Taxation Administration Act 1999 (ACT) which has similarities (but is still relevantly different) to the TAA. Re Ausco related to the Taxation (Administration) Act 1987 (ACT) which did not contain any equivalent provisions to s 28 and s 29 of the TAA. The Taxation (Administration) Act 1987 (ACT) contained only a general discretionary provision for remission of penalty tax and interest in s 32. As such, the regime the subject of Re Ausco was very different from the regime the subject of this case. 112 Secondly, Re Ausco was not a case involving penalty tax. It was a case involving interest. As reported at paragraph 1 of the decision, the Commissioner had 'remitted the late lodgement penalty, but refused to remit the late payment penalty. The penalty imposed is at the rate of 20% of the unpaid tax'. It happens to be that s 4(1) of the Taxation (Administration) Act 1987 (ACT) defined "penalty tax" to mean 'an additional amount payable under subsection 30(1) or (2) or 31(1)'. Relevantly, s 30(1) dealt with late lodgement and imposed a penalty (similar to penalty tax as we know it under the TAA). Section 31(1) dealt with late payment and imposed interest (similar to interest as we know it under the TAA). Although Re Ausco refers to 'penalty tax', it is only because of the s 4(1) definition and is not actually relevant to the 'penalty tax' the subject of this case. 113 (f). The submission is: 'Similar provisions in the Income Tax Assessment Act 1936 (Cth) (ss 226Y, 226D and 160RZJ concerning disclosures made by a taxpayer after being informed of an audit) have been interpreted by the Commissioner of Taxation in accordance with similar criteria to those referred to in paragraph 16 above: Taxation Ruling TR 94/6 paragraphs 39-45'. 114 Unlike s 29 of the TAA, s 226Y of the Income Tax Assessment Act 1936 (Cth) (ITAA) uses the expression 'voluntarily'. Subsection (b) requires that 'the taxpayer voluntarily told the Commissioner, in writing, about the shortfall or part' (emphasis added). 115 Again, unlike s 29 of the TAA, s 226D of the ITAA also uses the expression 'voluntarily'. Subsection (b) requires that "the taxpayer voluntarily told the Commissioner, in writing, about the matter because of which the wrongful behaviour provision applies' (emphasis added). 116 There is no s 160RZJ of the ITAA and it is understood that the Commissioner intended to refer to s 160 ARZJ of the ITAA. Yet again, unlike s 29 of the TAA, s 160ARZJ of the ITAA also uses the expression 'voluntarily'. Subsection (b) requires that 'the company voluntarily told the Commissioner, in writing, about the shortfall or part' (emphasis added). 117 In fact, in addition to ss 226Y, 226D and 160ARZJ of the ITAA, ss 226E and 160ARZK (which also deal with reduction of penalty tax) each also use the expression "voluntarily". 118 Accordingly, although ss 226Y, 226D, 160ARZJ, 226E and 160ARZK of the ITAA each deal with reduction of penalty tax under that Act, the provisions are not relevantly similar to s 29 of the TAA. This is because s 29 of the TAA does not use the expression 'voluntarily' or 'voluntary' and only requires that the taxpayer 'discloses' and not that the taxpayer 'voluntarily discloses'. 119 The fact that provisions in a Commonwealth tax statute consistently expressly require that disclosure in writing be 'voluntarily' made as a prerequisite to reduction in penalty tax under that statute, does not mean that such prerequisite applies to a state taxation administration Act. 120 The scheme of the ITAA requires that disclosure in writing be made "voluntarily". The scheme of the TAA does not. Accordingly, ss 226Y, 226D, 160ARZJ, 226E and 160ARZK of the ITAA have no relevance to the issue the subject of this case. Similarly, although Taxation Ruling TR 94/6 is relevant to the ITAA, it is not relevant to the issue the subject of this case. 121 I agree with the President that as no sufficient error of law has been established, leave should not be given to extend the appeal to the merits. 122 The appeal should be dismissed. 123 NON-JUDICIAL MEMBER BENNETT: I agree with the order proposed. Order Appeal dismissed.

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