1. In the applications for review, the applicant bears the burden of proving the assessments of net amount and administrative penalties are excessive and the amounts that should be assessed, and of proving the cancellation decisions should not have been made or should have been made differently: Taxation Administration Act 1953 (Cth) ('Tax Administration Act'), s 14ZZK.

1. Entitlement to ITCs is governed by s 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) ('GST Act'), which provides that:

Who is entitled to input tax credits for creditable acquisitions? > > You are entitled to the input tax credit for any *creditable acquisition that you make.

2. The amount of the ITC is referable to the GST payable on the relevant taxable supply: s 11-25. In other words, there can be no ITC on an acquisition without GST being payable by the supplier on the supply to the acquirer.
3. The expression 'creditable acquisition' is in turn defined in s 11-5 in this way:

What is a creditable acquisition? > > You make a creditable acquisition if: > > (a) you acquire anything solely or partly for a *creditable purpose; and > > (b) the supply of the thing to you is a *taxable supply; and > > (c) you provide, or are liable to provide, *consideration for the supply; and > > (d) you are*registered, or *required to be registered.

4. The expression 'you' is defined in s 195-1 as follows:

you: if a provision of this Act uses the expression you, it applies to entities generally, unless its application is expressly limited. > > Note: The expression you is not used in provisions that apply only to entities that are not individuals.

5. The expression 'entity' is relevantly defined in s 184-1 as follows:

(1) Entity means any of the following: > > (a) an individual; > > (b) a body corporate; > > (c) a corporation sole; > > (d) a body politic; > > (e) a *partnership; > > (f) any other unincorporated association or body of persons' > > (g) a trust; > > (h) a *superannuation fund. > > Note: The term entity is used in a number of different but related senses. It covers all kinds of legal persons. It also covers groups of legal persons and other things, that in practice are treated as having a separate identity in the same way as a legal person does. > > . . . > > (3) A legal person can have a number of different capacities in which the person does things. In each of those capacities, the person is taken to be a different entity. > > Example: In addition to his or her personal capacity, an individual may be:

• sole trustee of one or more trusts; and
• one of a number of trustees of a further trust.

In his or her personal capacity, he or she is one entity. As trustee of each trust, he or she is a different entity. The trustees of the further trust are a different entity again, of which the individual is a member.

1. Various other expressions in s 11-5, such as 'supply' and 'acquisition', are defined inclusively. It is not necessary to set out the relevant provisions.

The Commissioner must cancel your [GST] *registration . . . if:

(a) the Commissioner is satisfied that you are not *carrying on an enterprise; and

(b) the Commissioner believes on reasonable grounds that you are not likely to carry on an enterprise for at least 12 months.

1. Section 8(1) of the A New Tax System (Australian Business Number) Act 1999 (Cth) ('ABN Act') provides for entitlement to an ABN in these terms:

*You are entitled to have an Australian Business Number (*ABN) if: > > (a) you are *carrying on an enterprise in *Australia; or > > (b) in the course or furtherance of carrying on an enterprise, you make *supplies that are *connected with the indirect tax zone.

2. Under s 18(1) of the ABN Act, the registrar (that is, the Commissioner of Taxation) may cancel an ABN registration if satisfied that:

(a) you are registered under an identify that is not your true identity; or

(b) at the time you were registered, you were not entitled to have an *ABN; or

(c) you are no longer entitled to have an ABN.

1. The administrative penalty regime has been relevantly summarised as follows:

. . . > > 4. By s 284-90 in Schedule 1 to the Taxation Administration Act 1953 (Cth) ('TAA'), Parliament has prescribed penalties in what has been described as 'gradations of increasing severity in terms of conduct by a taxpayer or his, her or its agent which has resulted in a tax shortfall'. > > 5. Thus, failure to take reasonable care, recklessness and intentional disregard of the law attract base penalty amounts of 25%, 50% and 75% respectively of the relevant tax shortfall. The applicable base penalty amount is increased by an uplift of 20% where, relevantly, a penalty has previously been applied. > > 6. The authorities establish that 'intentional disregard' requires: > > inter alia, an understanding by the taxpayer of the effect of the relevant legislation or regulations, an appreciation by the taxpayer of how that legislation or regulation applies to the circumstances of the taxpayer, and finally, deliberate conduct of the taxpayer so as to flout the [Act or regulations]. > > 7. The object of the administrative penalty legislation is stated to be to provide a uniform administrative penalty regime to apply to entities that fail to meet their obligations under taxation laws. Implicitly, it is to encourage voluntary compliance with taxation obligations. > > 8. Under s 298-20 in Schedule 1 of the TAA, the base penalty amount may be wholly or partly remitted where, having regard to all relevant circumstances, it is appropriate to do so.[1]

2. Of particular relevance to this matter, I should add that the Full Court of the Federal Court, in the context of a shortfall arising from incorrect claiming of ITCs, has held that the fact the Commissioner has stopped refunds of ITCs from being released is not relevant to whether the discretion to remit an administrative penalty should be exercised in the taxpayer's favour.[2]

1. The parties agree that there are four separate applications for review and that the dismissal power must be exercised separately in relation to each application.
2. In summary, I have decided as follows:

(a) The applications to review the objection decisions in respect of the assessments of net amount and the two cancellation decisions must be dismissed. For the reasons I outline below, they have no reasonable prospects of success. The main reason is that on no view that has proper regard to the applicable Australian legislation could it be determined that the alleged entity exists as an entity separate from Evans. It follows that there were no creditable acquisitions and no activities carried on by the alleged entity separate from the activities of Evans that could be characterised as carrying on an enterprise. Those conclusions are fatal to the applicant's claims. > > (b) The Commissioner's application for the application for review of the objection decision relating to the administrative penalties to be dismissed must be refused. The main reason is that it is not possible for the Tribunal to determine what prospects of success the application may have without first hearing evidence relevant to the Commissioner's finding that the applicant intentionally disregarded the law and to whether remission of the penalties to any extent is appropriate.

Assessments of net amount and cancellation decisions

1. Although I have considered each of these matters individually, because they raise some common issues it is convenient to discuss them together.
2. The applicant confirmed at the hearing of the dismissal application that a central plank of his submission, though not his only argument, was the application of United States legal concepts and statutes. The applicant referred to various US tax and other statutes regulations. Indeed, he asserted that the Commonwealth of Australia is a political subdivision of the United States. That is self-evidently not correct.
3. The only laws relevant to the determination of these applications for review are those made by Australian Parliament. I consider it would not be responsible use of the Tribunal's scarce, publicly-funded resources to detail and respond individually to the applicant's arguments that have the application of US law as their foundation. They are, with all respect, plainly and unequivocally misguided.
4. The applicant also sought to draw support from various Australian laws, including provisions of the income tax and foreign takeovers legislation. None of the statutes referenced by the applicant have any relevance to the applicant's entitlement to ITCs or to GST or ABN registration which fall for consideration under the provisions extracted above. The applicant variously claimed to be an unincorporated association, a company and a bank. The applicant did not identify a legal basis for any of those claims that has any prospect of success.
5. No amount of form-filling, registration or assertion can transform what remains in reality Evans himself, a natural person, into an association, company or bank. It is not a case where a natural person is treated as a separate entity when acting in a different capacity, for instance as a trustee. Rather, Evans claims to have achieved the status of a separate entity. He has not.
6. In short, the applicant has not identified any basis on which it could be concluded that the alleged entity has a separate existence or capacity to Evans the individual in his own right. If the applicant cannot demonstrate that the alleged entity is a separate entity from Evans, the applicant cannot on any view demonstrate that the applicant is entitled to GST and ABN registrations separate from Evans' registrations. Nor is there any basis on which it could be said that there is or may be an enterprise carried on by the alleged entity involving transactions between Evans and the alleged entity. It follows that the applicant cannot establish entitlement to the ITCs or the registrations, the statutory entitlements for which are premised upon an entity carrying on an enterprise.
7. Even if it were the case that the applicant is a separate entity, the applicant has not identified any arguable basis on which the applicant could be said to satisfy the requirements for entitlement to ITCs in the order of $30M. That is scarcely surprising in circumstances where the applicant has parted with no money in connection with alleged transactions and has identified no transaction on which GST was paid or is payable by Evans as supplier. The applicant appeared to blame the non-payment of consideration on the Commissioner's retention of the claimed ITCs.
8. The applicant claims there were transactions arising between Evans and the alleged entity apparently based on a concept of securities being created by Evans' receipt or acceptance of invoices or liabilities and the acquisition of the securities said to be so created by the alleged entity. Claims by Evans of the unilateral creation of securities in this way in earlier, unrelated litigation were roundly rejected by the court in each case.[3]
9. The applicant attempted to distinguish the circumstances of that litigation from the current proceedings on the basis that the alleged entity had not been established at the time of the litigation. Additionally, the applicant reproduced a myriad of Australian and US legislative provisions. What the applicant has not done, in his objection or in submissions before the Tribunal, is identify an intelligible basis for an entitlement to the ITCs that were claimed.

1. The Commissioner points to various factors in support of a submission that the applicant must have known the applicant was not entitled to the ITCs that were claimed when they were claimed. The factors include the previous unsuccessful litigation in which Evans attempted to demonstrate the creation of securities in circumstances analogous to his apparent arguments in this matter and previous interactions with the Commissioner's officers in respect of earlier claims.
2. I acknowledge the force in those arguments in a context where no rational basis for the ITCs in excess of $30M that were claimed has been put forward. If it is the case that the applicant intentionally claimed around $30M in ITCs knowing there was no such entitlement, that would be most egregious conduct. It would be difficult in those circumstances to see on what basis the applicant could challenge the decision that the shortfalls arose from intentional disregard of the law or that remissions would be appropriate. As the Commissioner pointed out, the applicant did not identify any basis on which remission of the penalties might be allowed.
3. However, it is a serious matter to dismiss an application for review without giving the applicant an opportunity to prove the assessments are excessive. It is not inconceivable that the applicant could satisfy the Tribunal that he did not intentionally disregard the law or, more particularly, that it is appropriate to remit the penalty at least to some extent. It is simply impossible to reach an informed view of his prospects, if any, of doing so at the current stage of the proceedings.
4. In the absence of hearing evidence from Evans, the Tribunal is not in a position to determine whether the applicant has any reasonable prospect of discharging the burden of proving he did not intentionally disregard the law. Nor has there been an opportunity for Evans to put on evidence that may be relevant to the question of remission.
5. Penalty assessments in the order of $27M are substantial by any measure. At this stage of the proceeding, I cannot say the applicant has no reasonable prospect of persuading the Tribunal to remit the penalty assessments to any extent or that the application for review is frivolous, vexatious, misconceived, lacking in substance, or otherwise an abuse of process. It may also be relevant, as the applicant seems to indicate in submissions, if ITCs were claimed in error, although that is yet to be proved by sworn evidence tested in cross-examination.

1. I have no direct evidence regarding the applicant's capacity to pay a penalty assessment of around $27M. It may be the case that the interests of the Commonwealth would be served by an agreed resolution of the matter. I would urge the parties to enter into a dialogue in that regard and to consider whether potential resolution of the matter might be assisted by an alternative dispute resolution (ADR) process facilitated by the Tribunal.
2. In any case, there seems to be no reason why the usual programming directions for the parties to file and serve Statements of Facts, Issues and Contentions, witness statements, hearing certificates and, if the parties wish, outlines of submissions, should not be made, and the matter set down for hearing. The Tribunal therefore invites the parties to submit agreed directions within 14 days, including if the matter is considered appropriate for an ADR process, or, failing agreement, each party's proposed directions.

[1] Mitri and Commissioner of Taxation [2024] AATA 1268.

[2] Dixon v Commissioner of Taxation [2008] FCAFC 54; (2008) 167 FCR 287, [20].

[3] Snowy Valleys Council v Anthony William Evans [2021] NSWSC 428; Australia and New Zealand Banking Group Limited [2023] NSWSC 1018.