Ha v New South Wales

Ha v New South Wales - [1997] HCA 34 - HCA 1997 case summary — Zoe

[29]

[I]t would be ridiculous to say that a State inland tax upon goods of a description manufactured here as well as imported here was not met by s 90, excluding as that section does both duties of customs and duties of excise, because the duty was not confined to goods imported and so was not a duty of customs and was not confined to goods manufactured at home and so was not a duty of excise. Submissions which were not materially different from the defendants' submissions in the present cases were advanced and rejected in Capital Duplicators Pty Ltd v Australian Capital Territory [No 2] [2] , the most recent of the line of authorities relating to excise. In Capital Duplicators [No 2] [3] , the majority of the Court (Mason CJ, Brennan, Deane and McHugh JJ) reviewed the authorities and said: The submissions advanced by the defendants and South Australia deny the proposition that "duties of customs and of excise" in s 90 exhaust the categories of taxes on goods. Those submissions accept that a tax which, in form or even in substance, imposes a duty on the importation of goods or on the local production or manufacture of goods would be within the scope of s 90. But a tax which does not fall within either of those categories but which imposes a duty indifferently on all goods (whether imported or locally produced or manufactured) is said to be outside the scope of s 90. These propositions were rejected expressly and, in our respectful opinion, rightly by Dixon CJ and Windeyer J in Dennis Hotels [4] . Moreover, they are inconsistent with the purpose which Dixon J attributed to s 90 in Parton [5] and which has been attributed to s 90 by subsequent judgments in this Court. Adhering to that view of the purpose of s 90, the term "duties of customs and of excise" in s 90 must be construed as exhausting the categories of taxes on goods. 1. (1960) 104 CLR 529 at 540. 2. (1993) 178 CLR 561. 3. (1993) 178 CLR 561 at 589-590. 4. (1960) 104 CLR 529 at 540, 600-601; cf Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 at 26 Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 at 663-664 Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368 at 383 5. Parton v Milk Board (Vic) (1949) 80 CLR 229

[73]

The preferable approach is to accept Dennis Hotels and Dickenson's Arcade as authority for the proposition that, in the special fields of licences to sell alcohol and tobacco, a licence fee which would otherwise be regarded as a duty of excise will not be so regarded if it can properly be characterised as a fee for carrying on business and if it is calculated by reference to sales made during a period other than the period of the licence. In Philip Morris, Brennan J in dissent declined to accept that approach, saying [59] : The point is whether licence fees for dealing in liquor or tobacco are to be sequestered from the operation of general principles by which the character of fees for licences to deal in other commodities is ascertained. There are, in my opinion, three reasons why a negative answer must be given to that question. First, the Constitution makes no distinction among commodities for excise purposes. Second, if the nature of the commodity were relevant to the character of a tax related to dealings in it, liquor and tobacco are historically the prime excisable commodities. Third, if liquor and tobacco had been thought to be commodities to which special principles applied, the decisions in Dennis Hotels and Dickenson's Arcade would have been distinguished on that ground in H C Sleigh. Thus, respectfully, I am in agreement with Stephen J in H C Sleigh [60] on this point and in disagreement with the contrary view expressed by Mason CJ and Deane J. I would hold that liquor or tobacco are in no special category which denies to a tax on any step in their production or distribution the character of a duty of excise. However, the nature of these commodities is such that licensing schemes which affect them may be truly regulatory (as Taylor J held in Dennis Hotels) and that feature of a licensing scheme is relevant to the character of a fee exacted for a licence. We are respectfully unable to accept the basis on which Mason CJ and Deane J accepted Dennis Hotels and Dickenson's Arcade [61] . Were it not for that basis, Mason CJ and Deane J would have joined Brennan and McHugh JJ in holding the imposts in Philip Morris and Coastace to be duties of excise and, on that account, invalid. The concordance in their Honours' views was manifested in their joint judgment in the Capital Duplicators Case [No 2]. 1. Philip Morris (1989) 167 CLR 399 at 440. 2. Philip Morris (1989) 167 CLR 399 at 459. 3. (1977) 136 CLR 475 at 496. 4. Prior to Federation, beer, spirits and tobacco were the chief and perhaps the only subjects of Colonial excise duties: Convention Debates, (Sydney 1891), at pp 349(2), 366(1).

[98]

Bearing in mind that the Constitution was framed in Australia by Australians, and for the use of the Australian people, and that the word "excise" had a distinct meaning in the popular mind, and that there were in the States many laws in force dealing with the subject, and that when used in the Constitution it is used in connection with the words "on goods produced or manufactured in the States", the conclusion is almost inevitable that, whenever it is used, it is intended to mean a duty analogous to a customs duty imposed upon goods either in relation to quantity or value when produced or manufactured, and not in the sense of a direct tax or personal tax. Reading the Constitution alone, that seems to be the proper construction to be put upon the term. The reference in that passage to the words "on goods produced or manufactured in the States" appears to be a reference to s 93, which is a transitional provision providing that duties of excise collected in one State upon goods passing into another State for consumption shall be taken to have been collected not in the former but in the latter State. The words used are "duties of excise paid on goods produced or manufactured in a State and afterwards passing into another State for consumption" and there is no reason to suppose that those words are used to differentiate one type of excise duty from another. On the contrary, they are plainly intended to be descriptive of what is meant by the term "duties of excise" as it is used in the Constitution [79] . Otherwise, the use of the restricted expression would be by way of exception which it would be impossible to explain [80] . 1. (1904) 1 CLR 497 at 509. And see Capital Duplicators Pty Ltd v Australian Capital Territory [No 2] (1993) 178 CLR 561 at 606-609, per Dawson J; at 624-625, per Toohey and Gaudron JJ. 2. Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 555And see the Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 585. 3. See Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 466

[120]

The duties of customs and duties of excise contemplated by the Constitution are, I think, alike duties which are imposed as a condition of the entry of particular goods into general circulation in the community - of their introduction into the mass of vendible commodities in a State. When once they have passed into that general mass, they cease, I think, to be proper subject matter for either duties of customs or duties of excise. In H C Sleigh Ltd v South Australia [101] , Murphy J was of the opinion that duties of excise within the meaning of s 90 are taxes upon goods produced or manufactured within a State. In Logan Downs Pty Ltd v Queensland [102] he said: In general, taxes imposed without regard to the place of production or manufacture are neither duties of customs nor duties of excise. The essence of each duty is the tendency to discriminate between goods locally produced and other goods. He adhered to this view in Hematite Petroleum Pty Ltd v Victoria [103] where he said: The constitutional concept of excise forbidden to the States is limited to taxes on production within the State; it does not extend to taxes on distribution or consumption unless these are in substance taxes on production within the State. In Philip Morris Ltd v Commissioner of Business Franchises (Vic) [104] and the Capital Duplicators Case [No 2] [105] , Toohey and Gaudron JJ questioned the view taken by Murphy J that excise duties are confined to State taxes on production within the State and preferred the view that they may extend to State taxes imposed on goods produced in Australia. It is unnecessary for present purposes to pursue that matter. Putting it to one side, their Honours accepted in both cases that s 90 strikes down State taxation measures which discriminate against goods locally manufactured or produced [106] . Finally, in the Capital Duplicators Case [No 2] [107] Dawson J expressed the view that: The difference between excise duties and other taxes within the context of s 90 is to be seen in the purpose served by that section. That purpose is to secure the customs union to which the States agreed in the Constitution by ensuring a uniform policy with respect to external tariffs, whether free trade or protectionist. A tax should be characterised as an excise duty if it imposes a different level of tax on goods produced overseas and home-produced goods. It is this difference which determines the extent of protection (if any) for local production and manufacture. 1. Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 625, per Toohey and Gaudron JJ. 2. (1960) 104 CLR 529 at 556. 3. (1977) 136 CLR 475 at 526-527. 4. (1977) 137 CLR 59 at 84. 5. (1983) 151 CLR 599 at 638. 6. (1989) 167 CLR 399 at 479-480. 7. (1993) 178 CLR 561 at 630-631. 8. See Philip Morris (1989) 167 CLR 399 at 483; Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 629-631. 9. (1993) 178 CLR 561 at 609.

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