Mooney v Commissioners of Taxation (NSW) [1905] HCA 61

Mooney v Commissioners of Taxation (NSW) [1905] HCA 61 - HCA 1905 case summary — Zoe

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It must be remembered that the exemptions referred to are "as to value or amount," and not exemptions on other grounds. In the case of land the reference is plainly to sec. 10, which provides that land tax shall be payable by every owner of land after deducting £240 from the assessed value. This may be, not inaptly, described as "an exemption as to value," and it results from the deduction made under sec. 10. With respect to incomes the term "exempt" is used as an adjective in sec. 17, which pro- vides that income derived from certain sources shall be "exempt" from income tax, and the word " exemptions " is used in sec. 27 (vi) with reference to sec. 17. As already shown, the word "exemptions " in the phrase now under consideration cannot refer to see. 17, which deals not with amount but with sources. But it obviously includes the deductions made under sec. 16. Does it then refer to anything else? As already pointed out, the term "exemptions " assumes the existence of something from which the exemption is to be made, but neither that term nor the term "deduction" is apt as referring to a case which does not fall within some category with respect to which there may be an exemption or deduction. Still, the context may show that the word "exemptions" must have a larger meaning. The phrase "amount of income taxable" is not used elsewhere in the Act, although other somewhat similar phrases are used in secs. 27, 28, and 68. Sec. 27, as already pointed out, refers to what is called the taxable amount, and the first direction is that the "amount of taxable income" from all sources for the preceding year shall be the basis of calculation. "Taxable income" does not include income from the sources mentioned in sec. 17. The fourth direc- tion uses the words "taxable amount of any income." Sec. 28 provides that "from the taxable amount so ascertained" every tax- payer shall be entitled to deductions in respect of certain specified out-goings. Sec. 68 detines the term "income chargeable" as meaning "the taxable amount less the deductions allowed " in the Act. '

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in the one case and £240 in the other; and I cannot see reason for holding it to include a case which does not fall the original area of taxation. Thus construed, sub-sec. ( vides that no person shall be relieved from the obligation make a return as to income merely because the provisions of { Act for deductions from the total ineome would redue chargeable income below £200, and so exempt him alt under sec. 16. That is to say, every person who has a income exceeding £200 is bound to furnish a return noi standing those provisions. To support the extended construct of the words "all persons liable to taxation" contended for the respondents, it is necessary, first, to read negative wo extending an obligation imposed by positive words; then ton the single expression "within the exemptions" as bearing | distinct meanings in the same phrase, that is to say, with to land tax as meaning "entitled to the benefit of the statut deduction from the total value," and with respect to income t as meaning not only "within the benefit of -the statut deduction from the taxable amount of income," but also "y the benefit of non-liability to taxation by reason of insufficiem of total income." If the legislature meant to include all in receipt of income in the obligation to make returns nothi would have been easier than to say so. I cannot see my do such violence to the language of the Statute, or to hold tl the term "all persons liable to taxation" is synonymous éi with "all persons in receipt of income," or with "all alleged to be in receipt of income," or with "all persons s to the jurisdiction of the legislature," unless, indeed, no othe construction is open which would make the other provisions the Statute intelligible. But, in my opinion, the intention legislature was that persons who were not in receipt of a gi income exceeding £200 a year - a fact easily ascertained just: ownership of land can be ascertained - should not be in any concerned with its provisions. If a person with an exceeding that amount failed in the obligation imposed up him by the Statute, provisions, considered by the legislature be ample, were made for punishing him both by fine and peni and, if these provisions were found inadequate, authority w:

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appealed to that Court he would have been entitled (if of the facts is correct) to have the assessment set aside | ground that he was not liable to pay the tax; and that, the jurisdiction of the Commissioners cannot be impeached in other way. This argument was accepted by the learned J in the Full Court. They referred to the well known when a new right is created by Statute, and a special enforcing it is provided by the same Statute, that mode mu general be taken to be exclusive. But, with deference, unable to see how this rule applies to the case where a trib of limited jurisdiction exceeds its jurisdiction. The cit that an appeal lies from a tribunal of limited jurisdiction is q irrelevant to the question whether a particular case is within jurisdiction. The fact that an appellate tribunal has jurisdi to reverse the decision of a tribunal of first instance on the g of excess of jurisdiction does not in general affect the right persons complaining of the excess to ask for a prohibition, 0 set up the invalidity of the judgment in any other appropt proceeding. In the case of Rex v. General Commissioner Taxes for Clerkenwell (1), this was taken for granted by Court of Appeal and by the very learned counsel by whom case was argued. 4 It is said, however, that if the appellant had appealed to | Court of Review, as he might have done, that Court would had jurisdiction to inquire whether he had any taxable ine and that if the Court had (though erroneously) decided th had a taxable income, its decision would have been bint him (unless appealed from to the Supreme Court on case sta and would have established conclusively as between him a Commissioners that he was a person liable to taxation, and sequently a person who had made default under sec. 39. Possi this result would have followed if the appellant had invoked jurisdiction of the Court of Review. On that point I expre opinion. But it does not follow that a person against whom order is made by a tribunal which has no jurisdiction, and ft which an appeal lies, is bound to appeal from the order, cannot take his objection by way of prohibition or otherwise. (1) (1901) 2 K.B., 879.

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of goods and chattels taken by the defendant under a warrant of distress issued by the Commissioners of Taxes to enforce payment of duties for which the plaintiff had been assessed by the assessors for his parish under the Act 48 Geo. III. ¢. 99. The Court treated the case as if it had been an action of trespass for taking goods without legal justification. The main question in the case was whether under the Act of 43 Geo. III. ¢. 99, the jurisdiction of the parish assessors was limited to assessing the taxes payable by persons who in fact and law were liable to pay them, or whether it also extended to determining whether persons alleged to be liable were in fact and law so liable. The Court of Exchequer, on consideration of the provisions of the Statute, took the latter view. In the course of the argument of Sir F. Thesiger for the plaintiff, Parke B. is reported to have said (2): - * Wher- ever a Statute gives to certain persons the power of adjudicating upon a particular matter, their decision excludes all further inquiry. Here it is as if the Statute had said, that the assessor shall decide whether or no the party is a horse-dealer; and the assessor having done so, his decision is final and conclusive, unless appealed against in the manner pointed out by the Act: Brittain vy. Kinnard (3); Reg. v. Bolton (4). In delivering judgment he said (5): - * On a careful consideration of these Acts of Parlia- ment, they seem to me to differ from the Statute of Elizabeth, as "to poor-rate (42 Eliz. c. 2), and that the legislature intended that the assessment of the assessors appointed by the Commis- sioners should be final and conclusive, unless appealed from, in the first place, to the Commissioners, and further, if neces- sary, to the Judges of the superior Courts; and again, " With- out referring to the Statutes, I should say, & priori, that the object of the legislature was to make the decision of the assessor final and binding, unless disputed in the manner pointed out. On reading the Statutes, I come to the same conclusion. By the 9th section of the 43 Geo. III. c. 99, the Commissioners are to meet and appoint assessors, who are to bring in their cer-

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thereby 'required, with all care and diligence, to charge and themselves and all other persons chargeable with the said dut If the language had been ' to charge and assess all such pe they honestly and bond fide, after due care and diligence, to be chargeable,' their assessment would, beyond all quest final. But though the Statute does not, in express te that the assessment shall be conclusive, yet I find, on refe: the 30th section of the 43 Geo. III. ¢. 161, which enabl assessors to assess persons who neglect or refuse to deliver it is enacted that every such assessment 'shall be final and eo clusive upon the person thereby charged, who shall not be liberty to appeal therefrom, unless such person shall prove tl he or she was not at his or her dwelling-house or place of ab at the time of delivery of such notice, nor between that day an the time limited for delivering such lists aforesaid to the as' nor unless such person shall allege and prove some other ¢ for not having delivered his or her list, as the Commissione: in their judgment, think reasonable and sufficient. In special case, the legislature has expressly made the assessm final and conclusive; and unless the party can bring hims within the exception, he has no opportunity of appealing. being so, if a party, who has an opportunity of appealing, not avail himself of it, it would be reading the Acts very incot sistently to say that he is not equally bound by the assessmen Let us then look to the power of appeal, which pessibly might framed in such a way as to show that the legislature did mean it to be conclusive. This provision is contained in the sec. of the 43 Geo. III. ¢. 99, which enacts, 'that, if any shall think himself overcharged or overrated by any assessme or surcharge, &c., 'it shall be lawful for him to appeal to th Commissioners; &. It is argued, that the wording of this lau shows that the legislature meant it to apply only to persons to be rated, but rated for too much. Admitting it to be so, that the word ' overrated' has that meaning, then this plain! iff in the predicament of a person 'overrated, since he is clear! liable to part of the rate; for it is stated by the avowry, that hi was liable to 'other duties amounting to £3 8s. 9d., in which h was duly assessed and which he paid." The learned

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appeal. The moneys received by the appellant (apart income proper of under £50) cannot be held to be profits or ga as included in the meaning of an annual income. The appe does not appear to have been carrying on the buying and of mines as a business, This was a case of three men taki land for mining, developing their mine by their own labour, then accepting a good price for that which had gained value fr their labour. So far as we know it was an isolated tra and the price was not profit as generally known, but value. ' With reference to the decision in Allen v. Sharp (1), strongly pressed on us, I agree in thinking that it does not appl to the present case. It seems to me to fall within the secor branch of Lord Esher's rule in The Queen v. The Commissione for Special Purposes of the Income Tax (2), as an instance which the legislature "intrusts the tribunal or body with jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists, as well as the jurisd on finding that it does exist, to proceed further or do somethi more." Much light is thrown on the judgment by the ob tions of Parke B., interposed during argument at p. 360 of report, in the passage which my learned brother has cited. first branch of the rule, however, is important to the pre case. Parliament, his Lordship observes, "may in effect s that, if a certain state of facts exists and is shewn to the tribuni or body" established by Statute, "before it proceeds to do certain things, it shall have jurisdiction to do such things, b not otherwise." That is what I conceive the legislature has s in this Assessment Act. The jurisdiction of the Commissi depends on a state of facts which in this case does not exist. - Finally, it is argued that, as the appellant could have appeal to the Court of Review under sec. 44 instead of merely the assessment as a nullity, that is the only way in whieh th jurisdiction of the Commissioners could be tested. Assu that an appeal lay to the Court of Review on the question jurisdiction, it does not follow that the existence of such

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the same year which fixes the rate of the tax. The latter Act provides in see. 1 that there shall be "annually levied and paid, under the provisions of the Land and Income Taa Assessment Act 1895, and in the manner therein prescribed an Income Tax of sixpence in the pound on the amount of all incomes chargeable thereunder." The Land and Income Tax Assessment Act in see. 68 defines " income chargeable " as " the taxable amount less the deductions allowed under this Act." The meaning of "taxable amount " is elucidated by sec. 27 as follows : - " For the purpose of ascertaining the sum, hereinafter termed the 'taxable amount, on which (subject to the deductions hereinafter mentioned) in- -come tax is payable, the following directions and provisions shall 'be observed and carried out." After that come directions for the basis of assessment, two definitions of "taxable amount" in special cases, and then the following general provision in sub-sec. (vi.): - In all other cases the taxable amount shall be the total amount of taxable income arising or accruing to any person from all sources except to the extent of the exemptions provided by section seventeen." Sec. 17 contains the list of incomes which on various grounds of public policy are altogether exempt from income tax, as for instance the revenues of Muni- cipal Corporations and the funds and incomes of Registered Friendly Societies. Before we can arrive at the amount of income upon which sec. 15 charges the tax we must deduct from the total amount of the income which is liable to be taxed the deductions authorized by sec. 28 in accordance with the method prescribed by that section. These deductions are, speaking generally, such as would be necessarily made on ordinary business principles to arrive at nett income - but in many cases it 'is clear that they cannot be made without the intervention of the Commissioners. For example, in the case of a business where machinery or utensils is employed, the deductions for diminished value of machinery or utensils by wear and tear during the year 'is to be such as the Commissioners may think just and reasonable. By sub-see. 1, losses, outgoings and expenses incurred in the pro- duction of income can be deducted only if actually incurred in New South Wales. But by sec. 5 the Commissioners may, where

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sub-see, (viii.) of that section provided for exactly such a case in the following words: "No person shall be released from the obliga- tions and penalties by this Act or the regulations imposed in respect to the making of the returns herein mentioned by reason only that such person may be within the exemptions as to value of lands or amount of income taxable hereinbefore declared." There is only one exemption as to value of lands to be found in the Act, that is in sec. 10; which, although it does not use the word " exemption," in effect, exempts from taxation all lands the unimproved value of which is under £240. Also, there is only one exemption as to amount of income taxable to be found in the Act

that is the implied exemption from taxation of all incomes under £200 - in other words the exemption upon which the defendant relies. It may be admitted for the purposes of inter- preting sub-sec. (viii.) that the Commissioners have no power to assess an income as over £200 which is in fact under £200, that the decision of the Court of Review on the assessment is not con- dlusive as to fact or law, and may be reviewed by any Court in which an action for the amount of tax is brought - all that may be admitted, and yet the obligation to furnish information required in the return as the material for the assessment is not affected. It is true that the words are negative - they do not direct tax- payers whose incomes are within the exemption as to value to send in a return, but, where a taxpayer's only reason for failing to send in a return is that his income is under the amount exempted, they declare that that reason shall not exempt him from the obligation to send in a return of his income or relieve him from penalties for failing in that obligation. The defendant admits an income of £50 for the year in question - an income clearly within the section in all other respects, but he contends that his other receipts in that year were not income, and therefore his income was £50 only and below the exemption. That was his only reason for failing to send in his return, I see no way of giving effect to the words of sub-see. (viii.) except by holding that that is no valid reason for failing to send in his return, and that, having so failed, he was a person making default in furnishing a return of income under sec. 39. That section provides that where such default is made the Commissioners may "make an assessment of the

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