Hematite Petroleum Pty Ltd v Victoria

Hematite Petroleum Pty Ltd v Victoria - [1983] HCA 23 - HCA 1983 case summary — Zoe

[4]

The facts which must be accepted as correct for the purposes of the demurrer may be summarized as follows. The plaintiffs, as joint venturers, carry on the business of the exploration for, recovery, production and processing of petroleum, and have since 1968 produced petroleum from wells located in Bass Strait more than three miles from the coast of Victoria. Their operations are now, and have at all material times been, carried on as follows. Hydrocarbons in the form of oil or gas derived from the wells in Bass Strait are carried from offshore production platforms to a gas processing and crude oil stabilization plant at Longford in Gippsland in Victoria. There the hydrocarbons are processed and separated into stabilized crude oil, liquefied petroleum gas and natural gas. The stabilized crude oil is conveyed by a pipeline ("the crude oil pipeline"), which is the subject of pipeline licences nos. 35 and 126, to a fractionation plant and crude oil tank farm at Long Island Point on Westernport Bay in Victoria. The liquefied petroleum gas is conveyed by another pipeline ("the gas liquids pipeline") the subject of pipeline licences nos. 27 and 34, to the plant at Long Island Point. The natural gas is conveyed by a third pipeline ("the Gas and Fuel Corporation pipeline"), the subject of pipeline licences nos. 75, 117, 120 and 135, to Melbourne. The plaintiffs are the co-owners of the crude oil pipeline and the gas liquids pipeline and the co-holders of licences nos. 27, 34, 35 and 126, which are issued under the Pipelines Act; they also hold the permits which under that Act must be held by a person to whom a licence is issued. They are the co-owners of the substances that pass through those two pipelines. All the petroleum recovered from the wells in Bass Strait is conveyed to the Longford plant and all of the products of the Longford plant (except the natural gas) are conveyed by the crude oil pipeline and the gas liquids pipeline to the Long Island Point plant. There is a continuous flow of crude oil and gas liquids respectively through those two pipelines, and no other substances have been conveyed by them. At the Long Island Point plant further processing occurs; the products are propane and butane (which are marketed as liquefied petroleum gas), ethane (which is marketed separately) and crude oil. Approximately 90 per cent of the propane and butane is exported by ship from Long Island Point and a substantial part of the crude oil, which is sold by the plaintiffs, is transported to its destination by sea. It does not appear from the statement of claim how the ethane is disposed of. There is no other practicable way of conveying the crude oil and the liquefied petroleum gas from Longford to Long Island Point other than by the pipelines. There is no port at Longford; Long Island Point is the nearest deep water port. The recovery of the petroleum from Bass Strait, its processing and production at Longford and Long Island Point and the delivery of the products transported by sea is virtually a continuous process and the transportation of the crude oil and liquefied petroleum gas through the crude oil pipeline and the gas products pipeline is an integral step in the production of the products sold by the plaintiffs. The natural gas produced at Longford is sold and delivered by the plaintiffs to the Gas and Fuel Corporation of Victoria at Longford, and is conveyed to Melbourne by the Gas and Fuel Corporation pipeline, which is owned by the Gas and Fuel Corporation of Victoria, which holds licences nos. 75, 117, 120 and 135.

[23]

The Pipelines Act gives rise to some difficulties of construction. It is not altogether clear what is the statutory purpose of requiring a person who wishes to carry something through a pipeline to obtain a licence as well as a permit, unless it is to dissociate the fee, which is payable for the licence, from the permit. It is made clear enough by ss. 25 and 26 that before any person may construct a pipeline he must hold a licence as well as a permit. The provisions of ss. 8-12 of the Pipelines Act, considered alone, suggest that once a pipeline has been constructed the holder of a permit such as those issued in the present case, viz. a permit to own and use a pipeline for the purpose of carrying hydrocarbons, can lawfully use the pipeline for that purpose. However, to operate the pipeline a licence as well as a permit is needed. The definition of operation in s. 3 includes maintenance, removal and alteration, but is not limited to those things, and the ordinary meanings of the word "operate" include "to cause or actuate the working of; to work (a machine, etc.)" (Shorter Oxford English Dictionary). It seems to follow that a licence is needed to work the pipeline and ss. 36-38 of the Pipelines Act support the view that it is the licensee who is concerned with the working of the pipeline. A licence is also necessary to maintain the pipeline and maintenance is of course necessary to enable the pipeline to be used. The licences actually issued in the present case contain specifications and conditions, inter alia, as to the thing to be carried (which is described as liquid hydrocarbons, usually with further details) and as to the maintenance of the pipelines. Notwithstanding the definition of operation in the Pipelines Act, it is doubtful whether those licences would permit the plaintiffs to remove or alter a pipeline, but there is in any case no suggestion that they intend to do so. The licences authorize the plaintiffs to work and to maintain, and therefore to use, the two pipelines. At the time of the enactment of the Pipelines (Fees) Act 1981 the crude oil pipeline and the gas liquids pipeline had been fully constructed and were in continuous use for the conveyance of the plaintiffs' liquid hydrocarbons from Longford to Long Island Point. It is common ground that the pipeline operation fee which the Pipelines (Fees) Act 1981 made payable in respect of those two pipelines was not a fee for services rendered, but was a tax. In the circumstances to which I have referred, the tax was in my opinion payable for the right to use those pipelines for the conveyance of the liquid hydrocarbons from Longford to Long Island Point.

[31]

The association in the Constitution of duties of excise with duties of customs suggests that the two forms of taxation were intended to perform related purposes. The reason for giving the Commonwealth exclusive power to impose duties of customs was clear enough. It was intended by the framers of the Constitution that there should be no interstate tariffs and that the taxation of imports into the Commonwealth should be exclusively within the province of the Commonwealth. Although the Commonwealth was given exclusive power to impose tariffs, it might still have been possible for the States, by imposing duties of excise, to prevent the accomplishment of a policy which the Parliament wished to effect by means of its tariff. For example, if the Commonwealth wished to protect local manufacturers, and accordingly imposed duty on certain imported goods, a State which believed in free trade might have imposed a corresponding excise duty on local manufacturers of the same kind. Whether such action would have been likely is another question. Similarly, if the Commonwealth had adopted a policy of free trade, a State might have obstructed that policy by giving bounties to local manufacturers. Section 90 of the Constitution, however, made exclusive the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production and export of goods. This conjunction of customs, excise and bounties suggests that it was intended by s. 90 to give the Commonwealth a real control of its tariff policy, but it is by no means evident from anything that appears in the Constitution that it was intended to go further, and "to give the Parliament a real control of the taxation of commodities", to use the words of Dixon J. inParton v. Milk Board (Vict.) [7] , and still less clear that it was intended to give the Parliament "the control of the national economy as a unity which knows no State boundaries": Western Australia v. Chamberlain Industries Pty. Ltd. [8] .

[35]

The conclusion that the grant to the Commonwealth of the exclusive power to impose duties of excise gravely hampers the States in the conduct of their financial affairs without conferring any corresponding benefit on the Commonwealth does not mean that the prohibition which s. 90 contains must be disregarded. It does however suggest that there is no good reason for giving a wide and loose construction to its provisions. It supports the view that there is no justification for deciding the question whether a tax is a duty of excise by considering whether the real or practical effect of the legislation is the same as that which would be produced by a duty of excise. As Walsh J. pointed out in Western Australia v. Chamberlain Industries Pty. Ltd. [9] , it does not assist the Court in deciding whether a tax is an excise to consider the economic consequences of the tax. And when it has been said that in deciding upon the validity of laws we must look to the substance rather than the form, that only means "that an examination must be made of the provisions of the Act to determine its legal effect, according to the proper construction of its operative provisions, whatever their form may be and whatever label may be attached by the Act to the duty which is imposed by it": Western Australia v. Chamberlain Industries Pty. Ltd. [10] . With all respect to any who may take a different view, I can see no analogy with questions that arise under s. 92 of the Constitution. That section is expressed to be designed to achieve a result - that trade, commerce and intercourse among the States shall be absolutely free. It is understandable that an enactment which has the practical effect of detracting from the attainment of that result may be regarded as infringing the prohibition contained in the section. However, s. 90 makes exclusive to the Commonwealth a particular sort of tax. The question whether a State law infringes s. 90 can be answered only by determining whether it imposes that sort of tax. One must first define "excise", and then ask whether the tax imposed by the State statute comes within that definition. It is irrelevant that the State statute brings about the same practical result as a duty of excise, for s. 90 does not forbid the States to achieve any particular economic result; it forbids them to enact a particular form of taxation. The decision in Vacuum Oil Co. Pty. Ltd. v. Queensland [11] strongly supports this approach. In that case it was accepted that the scheme of the Act there challenged did bring about the same result as levying an excise on petrol, but that did not result in its invalidation [12] .

[39]

The fact that an impost is correctly described as a fee for the right to carry on a particular business or occupation will not prevent it from being a duty of excise. The question, as I have said, is whether the impost is a tax directly related to goods, imposed at some step in their production or distribution before they reach the hands of consumers. In Peterswald v. Bartley [16] , where a fixed fee for a brewer's licence was held not to be an excise, the amount of tax in no way depended on the quantity of beer manufactured [17] . In three cases the Court has upheld the validity of licence fees required to be paid by public carriers. The fee considered in Hughes & Vale Pty. Ltd. v. State of New South Wales [18] , was calculated on the combined weight of the vehicle and the weight of the load it was capable of carrying and was payable in respect of the employment of the vehicle upon a journey independently of the weight or quantity of the commodities carried; it was held not to be an excise because the tonnage rate was not a tax directly affecting commodities [19] . In Browns Transport Pty. Ltd. v. Kropp [20] , the fee was a percentage of the gross revenue derived from carrying on the service authorized by the licence and the Court said [21] : "Here the exaction is imposed without mention of, and without regard to, any commodity or class of commodities. The person taxed is not taxed by reference to, or by reason of, any relation between himself and any commodity as producer, manufacturer, processor, seller or purchaser. The taxes which s. 35(2) authorises, calculated on one or more of a variety of bases, are payable whether the person taxed carried goods or passengers, and, if he carries goods, whatever may be the nature of the goods carried." This was said although in fact the carrier in that case derived revenue only from freight [22] , it was the provisions of the enactment, rather than the facts of the case, that mattered. In Bolton v. Madsen [23] the fee was charged by reference to the carrying capacity of the vehicle and the distance in miles over which the goods were carried on the vehicle. The tax was held not to be an excise because it did not affect the goods carried. The Court said [24] :

[40]

It is not enough that Turner, the owner-carrier, could by a simple calculation determine the cost to him per bale of carrying his wool from his station to the wool store for sale. It is not enough because it is the criterion of liability that determines whether or not a tax is a duty of excise. The tax is a duty of excise only when it is imposed directly upon goods or, to put the same thing in another way, when it directly affects goods, and to establish no more than that its imposition has increased the cost of putting goods upon the market by a calculable amount falls short of establishing the directness of relation between the tax and the goods that is the essential characteristic of a duty of excise. A fixed fee to use a vehicle for a particular journey could by a simple arithmetical calculation be distributed over the goods carried, but counsel for the appellants showed natural reluctance to go as far as to contend that such a fee imposed by virtue of s. 44(2)(b)(i) of the Act would be a duty of excise. It was held to be immaterial that the carrier was also the producer of the wool carried. The Court pointed out [25] that the carrier fell within the provisions of the legislation "not because he wanted to carry wool which he had produced upon a vehicle of which he was the owner but because he wanted to carry wool belonging to him on that vehicle; not because he wanted to carry the wool to market but because he wanted to carry the wool on a Queensland road". They added [25] : If there were a law imposing liability to pay fees for permits to carry a person's own goods upon his own vehicle without more, it could not be said that the criterion of liability is "the taking of a step in a process of bringing goods into existence or to a consumable state, or passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer" 1. (1904) 1 C.L.R. 497. 2. (1904) 1 C.L.R., at p. 511. 3. (1953) 87 C.L.R. 49. 4. (1953) 87 C.L.R., at p. 75. 5. (1958) 100 C.L.R. 117. 6. (1958) 100 C.L.R., at pp. 129-130. 7. (1958) 100 C.L.R., at p. 128. 8. (1963) 110 C.L.R. 264. 9. (1963) 110 C.L.R., at pp. 271-272. 10. (1963) 110 C.L.R., at p. 273. 11. (1963) 110 C.L.R., at p. 273.

[144]

The tax here is imposed upon trunk pipelines identified by reference to the numbers of the licences which authorize, subject to s. 35(1), their operation. On the proper construction of the legislation, I conclude that what is taxed is the activity of operating the pipeline in question. Furthermore, it is clear on the facts asserted in the statement of claim that the activity includes the use of the pipelines by the plaintiffs for the transportation of hydrocarbons in the course of the refining process and by the Gas and Fuel Corporation for the transportation of natural gas in the course of its business. This is not to say that the impost is a tax imposed on a step taken in the course of production or distribution of the hydrocarbons. It is payable before any petroleum product is conveyed through the pipeline. It might accurately be described as a direct or personal tax, a fee payable by the owner of a pipeline for the privilege of operating it. At the same time, it bears a close relation to the transportation of the product through the pipeline and I am prepared, for the sake of argument, to proceed on the basis of an acceptance of the plaintiffs' argument that it is properly described as a tax on a step taken in the course of production or distribution. Even so, on the basis of received doctrine, such a conclusion is not of itself sufficient to constitute the tax a duty of excise. It must be directly related to the product which passes through the pipelines. The question is whether there is such a relationship. The tax imposed on each pipeline is a fixed annual fee which is in no way dependent upon the volume of hydrocarbons which pass along the pipeline. It remains constant regardless of the capacity or length of the pipeline and the rate at which the petroleum is pumped through it. It will be payable during periods when because of maintenance or other work referred to in the interpretation in s. 3 of the word "operation" no material is being passed along it.

[146]

It is now established that for constitutional purposes duties of excise are taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers. Let it be assumed that the carriage of wool from the station upon which it has been produced to a wool store for sale is a step at which the imposition of a tax directly affecting the wool would be a duty of excise and, on the footing already stated, let it be further assumed that the exaction of the fee demanded from Turner was directly authorized by the Act: nevertheless, the fee would not be a duty of excise for the simple reason that it would not directly affect the wool. It would be a fee to use a particular truck to carry any quantity of any wool belonging to Turner from Goondibilla Station to Brisbane calculated by multiplying three pence by the load capacity of the vehicle in tons and the distance in miles. The contention that such a fee is a duty of excise is, we think, completely answered by adopting mutatis mutandis what was said by Dixon C.J. in Hughes and Vale Pty. Ltd. v. New South Wales [17] about a tonnage rate levied upon licensees of vehicles used in the course of any trade or business calculated not merely upon the carrying capacity of the vehicle, as here, but upon the combined weight of the vehicle and the load it could carry. His Honour said: - "Finally the point was taken that the levy of the tonnage rates amounted to an excise duty placed beyond the power of the State by s. 90 of the Constitution. In answer to this contention it is, I think, enough to say that the tonnage rate is not a tax directly affecting commodities. It is calculated on the combined weight of the vehicle and weight of the load it is capable of carrying and is payable in respect of the employment of the vehicle upon a journey independently of the weight or quantity of the commodities carried. It is a tax on the carrier because he carries goods by motor vehicle" [18] .

[163]

It was submitted that to distinguish between a licence fee calculated on sales or turnover of a past period and one calculated on current sales or turnover is merely artificial, that it lacks some worthwhile quality of reality and is destructive of clear constitutional intent. So to submit is to assume that the exclusive nature of the federal Parliament's power to impose duties of excise can readily and with accuracy be explained by reference to constitutional purpose or historical reasons, that purpose or those reasons providing a reliable guide to the identification of the precise field of revenue-raising from which the States are to be excluded. Yet experience in the past suggests that niether source offers certain guidance and that it is, instead, to the meaning of "duties of excise" that attention must be directed if the extent of the area immune from State exaction is to be discovered. If, then, it be a feature of "duties of excise" that they are directly related to goods and are imposed at some step in their production or distribution (Bolton v. Madsen [9] ) it is entirely realistic that importance should be attached to the distinction to which I have referred, constitutional limits of revenue-raising power being fixed by reference to the particular character which an impost bears, it necessarily follows that a feature of that impost relevant to that character will be an important determinant of validity. Moreover, since s. 90 denies to the States only those imposts of a particular character, it is to be expected that imposts especially designed so as to lack that character will be resorted to; this is no more than the consequence of delimiting legislative capacity by reference to a particular class of impost identifiable by particular characteristics. These words emphasize to my mind that if one in seeking to determine the true character of a tax is unable to rely on the legal operation of the statute which imposes it, then the important constitutional distinction which is drawn by s. 90 must inevitably be eroded. If the term "duties of excise" is to be extended to cover any impost which may be seen in a practical sense to increase the cost of production or distribution of goods then the powers of taxation hitherto conceded to State legislatures will be seriously diminished. It may be noted that such a broad view of an excise duty finds no support by reference to the other matters referred to in s. 90. Both the term "duties of customs" and the term "bounties on the production or export of goods" signify in each case a necessarily direct and immediate connexion with commodities. Cf., also, Chamberlain [10] ; Logan Downs Pty. Ltd. v. Queensland [11] . 1. (1977) 136 C.L.R. 475, at p. 497. 2. (1963) 110 C.L.R., at p. 271. 3. (1970) 121 C.L.R., at pp. 20-21, 37. 4. (1977) 137 C.L.R. 59, at p. 64.

[199]

The compact between the people of the Australian colonies which is embodied in the Constitution was for unity in "one indissoluble Federal Commonwealth". To achieve and preserve that Commonwealth, the Constitution contains provisions, in both negative and positive form, designed to ensure that colonial boundaries, while remaining as lines of demarcation between States, did not continue as barriers in the path towards economic and national unity. Thus, the grant of a general taxation power to the Commonwealth Parliament was limited to exclude any power to discriminate between States or parts of States (s. 51(ii)) and the power to grant bounties was limited by a requirement of uniformity throughout the Commonwealth (s. 52(iii)). In addition, the Commonwealth was prohibited from giving preference, by any law or regulation of trade, commerce or revenue, to one State or any part thereof over another State or any part thereof (s. 99). For their part, the States were deprived, by s. 90, both of the power to impose duties of customs or excise and, subject to limited exception (s. 91), of the power to grant bounties on the production or export of goods. Both Commonwealth and States were subjected to the requirement of s. 92 that trade, commerce and intercourse among the States be absolutely free. It was directed that uniform duties of customs be imposed within two years after the establishment of the Commonwealth (s. 88). In combination, these provisions effectively deprived the people of any State of the protection of tariff barriers or preferential bounties against interstate competition. At the same time, they represented constitutional guarantees in the form of limitations of or restraints on the legislative powers which the Constitution conferred or preserved. The people of a State were not to be disadvantaged, in relation to the people of any other State, by the burden of higher customs or excise duties, by less favourable treatment as regards bounties on production or export of goods, or by restriction upon access, for themselves, their goods and their legitimate commercial endeavours, to the territory and markets of other States.

[208]

The Constitution contains no definition of "excise" or "duties of excise". In England, the original excise duties were taxes levied on the manufacture, purchase or sale of specified commodities. They were collected through the Excise Office and, in time, "excise duty" came to be applied to a wide variety of inland taxes collected through that office including such imposts as the fee for a dog licence and an auctioneer's licence fee. In the United States, excise duties, in their original sense, were "something cut off from the price paid on a sale of goods as a contribution to the support of government" (see 71 Am. Jur. 2d, State and Local Taxation, s. 28 and the cases there cited). It may be that references to "cut off" were the result of solecism since, etymologically, the word "excise", when used to denote a tax, would appear to be derived from the Dutch "excijs" from the Latin "accensare" (to tax) and not from the Latin "excisus" (cut out or cut off) to which the verb "excise" can be traced. As in England, "excise" came to be applied in the United States to a very wide variety of taxes: "any tax which does not fall within the classification of a poll tax or a property tax, and which embraces every form of burden not laid directly upon persons or property" (ibid). In the Australian colonies, "excise" and "duty of excise" were, it would seem, generally understood as having a meaning corresponding to their primary meaning in England, namely, "a tax on articles produced or manufactured in a country. In the taxation of such articles of luxury, as spirits, beer, tobacco, and cigars, it [had] been the practice to place a certain duty on the importation of these articles and a corresponding or reduced duty on similar articles produced or manufactured in the country" (Quick and Garran, Annotated Constitution of the Australian Commonwealth (1901), p. 837). Since Peterswald v. Bartley [41] , it has been settled that the combination of colonial usage and context leads to the conclusion that the term "duties of excise" is used in the Constitution in that narrower sense of a tax upon internally produced or manufactured goods. The subsequent cases in this Court on s. 90 have been largely concerned with the closer identification of the nature of that particular type of tax.

[216]

The meaning of the expression "duties of excise" as found in the Constitution has received a great deal of consideration during the lifetime of the Court. On the one hand the Court has taken a limited view by confining duties of excise relevantly to duties upon the manufacture or production of goods On the other hand, the Court has not taken the narrow view that to be a duty of excise the tax must be laid directly on the act or process of manufacture or production. In my view, it should be regarded now as acceptable and settled doctrine that the tax will be a duty of excise if it is upon or in respect of goods at any point including the point of manufacture or production, as they pass to consumption. This view, if I may respectfully say so, has been rightly taken, for a tax upon goods at any stage of their distribution will, in general, and sooner or later, according to circumstances, bear on the rate or level at which they are manufactured or produced or if not locally produced, on the extent of their importation. But there is no warrant, in my opinion, to require it to be established in any particular case that the tax in question will in fact so bear on manufacture or production. Its relevant effect will be presumed: it is enough that the impost is upon or in respect of goods before they have actually reached the consumer. But, of course, the demonstration of the effect of the tax upon such manufacture or production may assist an affirmative conclusion to the question whether the tax is a duty of excise. As Barwick C.J. had pointed out in Anderson's Pty. Ltd. v. Victoria [52] , "in arriving at the conclusion that the tax is a tax upon" a relevant step in the process of production, manufacture or distribution, "consideration of many factors is necessary, factors which may not be present in every case and which may have different weight or emphasis in different cases". His Honour continued [53] : The "indirectness" of the tax, its immediate entry into the cost of the goods, the proximity of the transaction it taxes to the manufacture or production or movement of the goods into consumption, the form and content of the legislation imposing the tax - all these are included in the relevant considerations. But in the end what must be decided is that the tax is in substance a tax upon the relevant step. That being the central question in a controversy as to the nature of the tax, it will not, in my opinion, necessarily be resolved by the form of the tax or by identifying what according to that form the legislature has made the criterion of its imposition, however important in any particular case those matters may be. Prominent among factors which can be added to those mentioned by Barwick C.J. is whether the amount of the tax bears a discernable relationship to the quantity or value of the goods manufactured or produced. While each of the above factors is relevant, no one of them is, by either presence or absence, necessarily conclusive of the ultimate question whether the tax is in substance a tax on the manufacture or production of goods. 1. (1977) 137 C.L.R., at p. 84. 2. (1970) 121 C.L.R., at pp. 12-13. 3. (1964) 111 C.L.R. 353, at p. 365. 4. (1964) 111 C.L.R., at pp. 365-366.

[221]

The main factor which militates against a conclusion that the tax is, in substance, a tax upon the manufacture or production of the hydrocarbons carried in the relevant pipeline is that the amount of the tax does not bear any disclosed relationship to the quantity or value of the goods manufactured or produced: as a matter of form, the tax is payable regardless of whether production of hydrocarbons ceases or whether no product is transported. The absence of such a relationship is not however, as has been said, necessarily decisive. Its importance will vary according to the circumstances of the actual case; in particular, it is of comparatively less importance in a case where the tax is imposed at the stage of manufacture or production of goods than in a case where what is claimed to be an excise upon the manufacture or production of particular goods is imposed at a stage where production or manufacture has been completed (see per Mason J., Logan Downs Pty. Ltd. v. Queensland [56] ). The importance of the theoretical possibility that the tax could be payable notwithstanding the cessation of the manufacture or production of hydrocarbons or of their transportation through the pipeline needs to be assessed against both the assumed fact that the flow of hydrocarbons through the pipelines is and has been continuous and the improbability that the plaintiffs would continue to operate a pipeline and thereby attract a tax of some $10,000,000 per year in the event that production or transportation were to cease other than temporarily. In the circumstances of the present case, the absence of a disclosed relationship between the tax and the quantity or value of the goods manufactured or produced is outweighed by the combination of a number of other factors, namely, the magnitude of the tax, its nature as an indirect tax, the fact that it is imposed at the stage of manufacture and production of goods and the fact that it must be paid before an essential step in the actual process of manufacture or production of those goods can be lawfully taken. In my view, the annual tax imposed in respect of each of the plaintiffs' two pipelines is a tax upon the manufacture or production of the goods which are distributed from Long Island Point after transportation, in the course of such manufacture or production, through the relevant pipeline. It is a duty of excise for the purposes of s. 90. It is unnecessary to consider whether, if it were critical that there exist a discernible relationship between the tax and the quantity or value of the relevant goods, it could properly be assumed that the amount of $10,000,000 per annuan in respect of each pipeline was not selected as the result of some arbitrary whim but by reason of some relationship to either the anticipated quantity or value of goods which were to be transported through the pipeline or the anticipated quantity or value of hydrocarbons which will be produced from the Bass Strait fields.

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