Commissioner of Taxation v New South Wales Cancer Council

1 The appellants (for convenience we will refer only to "the Commissioner") appeal against the judgment of a judge of this Court (Sackville J) in which his Honour held that the respondent ("the Cancer Council"), was entitled to a declaration that three particular models of sunglasses were exempt from sales tax pursuant to Item 20 of the First Schedule to the Sales Tax (Exemptions and Classifications) Act 1992 (Cth) ("the Act").

2 Goods are exempt from sales tax pursuant to Item 20 if they are: "(e)quipment of a kind ordinarily used in the course of industrial operations to protect persons engaged in those operations, including masks, respirators, shields, goggles, visors, helmets, belts and machine guards." 3 The sunglasses in question complied with an Australian Standard published by Standards Australia in 1990 entitled "Sunglasses and fashion spectacles" (AS 1067). The following outline of the relevant part of AS 1067 is taken from the primary judge's reasons for decision: "Part 1 (AS 1067.1) deals with safety requirements. It sets out safety requirements for sunglasses and fashion spectacles having plano lenses of nominally zero refractive power. The sunglasses described in AS 1067.1 are not intended to provide protection against sources of radiation other than natural sunlight. Paragraph 1.4 of AS 1067.1 deals with the classification of sunglasses and fashion spectacles as follows: 'For the purpose of labelling, sunglasses and fashion spectacles shall be classified according to the luminous transmittance properties of their lenses (as given in Table 2.1). The classifications are as follows: (1) Fashion spectacles. (2) General-purpose sunglasses. (3) Specific-purpose sunglasses. Type (a) For protection against very intense sun glare. Type (b) For protection against ultraviolet radiation in sunlight for specified environments.' AS 1067.1, par 1.3.7, provides the following definitions of the expressions used in par 1.4: '1.3.7.1 Fashion spectacles - glasses that do not substantially reduce sun glare and are worn primarily for their fashion properties. 1.3.7.2 General-purpose sunglasses - sunglasses intended to reduce sun glare in ordinary circumstances (which includes driving of motor vehicles in daylight). 1.3.7.3 Specific-purpose sunglasses - sunglasses for occupational and recreational purposes intended to reduce sun glare in those occupations or environmental conditions where general-purpose sunglasses may prove inadequate or unsuitable. These conditions include circumstances where glare is very intense, or where the wearer incurs regular or long-term exposure to glare.' Table 2.1, referred to in par 1.4, sets out several kinds of transmittance properties. It is necessary only to refer to the 'maximum mean transmittance values' for erythemal ultraviolet radiation (that is, ultraviolet radiation wavelength of 325 mm that elicits, after sufficient exposure, a delayed response of inflammation or reddening of the human skin). Fashion spectacles are those which permit transmittance of a maximum of five per cent of erythemal ultraviolet rays. In other words, fashion spectacles must screen out at least ninety-five per cent of those rays. General purpose sunglasses are those which permit transmittance of a maximum of one per cent of erythemal ultraviolet rays. The maximum figure for specific purpose sunglasses is 0.5 per cent in the case of category (a) and 0.2 per cent in the case of category (b). Each of the Council's AS sunglasses complies with AS 1067.1: · model 9604LF conforms as specific-purpose sunglasses type (b) and is suitable for driving, with a 'Glarefoil lens' ensuring traffic signal colour fidelity; · model 9633PK also conforms as specific-purpose sunglasses type (b) and is suitable for driving; and · model 014 'Fitovers' provide maximum protection from UV radiation (that is, have a maximum mean transmittance value of less than one per cent) and thus fall within the category of general-purpose sunglasses." 4 But for one matter it is agreed that the sunglasses in question satisfy the terms of the Item 20 exemption. The matter in dispute is whether, as the Commissioner submits, the protection of which the Item speaks is limited to hazards which arise out of the nature of the industrial operations engaged in, or whether, as the Cancer Council submits, it extends to any hazard which may be encountered by person engaged in industrial operations. 5 The Commissioner's submission can be and was put in a number of different ways. For example, it was submitted that sunglasses do not perform a function particularly concerned with workplace safety, that is, with the protection of persons engaged in industrial operations. Rather, so it was submitted, they perform a protective function which applies to the population generally, and to conditions generally encountered, namely sunlight. The learned primary judge accepted the Cancer Council's submissions and for that reason granted the declaration sought. 6 Once the primary Judge's finding is accepted that sunglasses complying with AS 1067.1, other than "fashion spectacles", are ordinarily used in the course of work by outdoor workers to protect them against the health risks associated with exposure to ultraviolet radiation and visible light, and the Commissioner does accept that finding, there is no warrant for restricting the ordinary English meaning of the words which Parliament has used. The Commissionerconcedes that industrial operations would encompass primary production and many other kinds of outdoor activities which would subject employees to long exposure to the sun's rays. However, senior counsel for the Commissioner seeks to draw a distinction between goods which protect against an environment in which the industrial activity is performed on the one hand and goods which protect against an environment which arises out of the carrying on of the industrial operations on the other. The submission is that it is only in the latter case that the exemption item applies. However, the distinction is not one which is apparent on the face of the legislation. 7 The Commissioner submits that the concluding words in Item 20, while not exhaustive, are illustrative of the nature of the equipment to which the Item applies and that "[e]ach involves protection from some risk which arises out of the operations in which they are used." The primary judge gave two reasons for rejecting this submission. First, he noted that the Macquarie Dictionary definitions of "visor" and "goggle" include references to things which protect the eyes from certain effects of nature. Second, His Honour expressed the view that even if all of the items of equipment specified in Item 20 had the characteristic identified by senior counsel for the Commissioner, he did not think that this would provide a reason for departing from the ordinary meaning of the language used in the first part of Item 20. With respect, we agree with both reasons given by his Honour. 8 It is said that it is a consequence of the adoption of the views put forward by the Cancer Council that exemption would be available for various goods which are used by persons engaged in employment to provided some measure of protection, although the protection in question has nothing to do with the actual work process. Whether this is so may well depend upon whether the goods in question really do qualify as "goods of a kind" otherwise meeting the statutory description. To resolve that question would involve an investigation of each of the examples, an investigation which we could not undertake without an appropriate evidentiary basis. In the present case it was accepted on the basis of the evidence before the learned primary judge that, but for the matter presently in dispute, the sunglasses fell within Item 20. 9 It follows that the appeal should be dismissed with costs. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice .