Plaintiff v Defendant

JUDICIAL REVIEW - Assessments of land tax issued under Taxation Administration Act 1997 - Assessments withdrawn - Reassessments issued in same amounts - Whether reassessment power spent - Interpretation of Legislation Act 1984 s 40; Taxation Administration Act 1997 ss 8, 9, 13, 14, 62, 63.

STATUTORY INTERPRETATION - Land tax assessment - Withdrawal - Reassessments- Whether reassessments authorised by statute - Exercise of power from time to time as occasion requires - Interpretation of Legislation Act 1984 s 40 (a); Taxation Administration Act 1997 ss 8, 9, 13, 14.

1 The plaintiff, Ms Celeste Vasiliades, seeks judicial review of assessments made by the Commissioner of State Revenue ('the Commissioner') for land tax payable by her in respect of land at 3 Towers Road, Toorak for the 2009, 2010 and 2011 assessment years. She contends that the assessments are invalid and their making involves jurisdictional error.

2 The main issue concerning the liability for land tax was whether the land was Ms Vasiliades' principal place of residence and therefore exempt under the Land Tax Act 2005 ('the Land Tax Act').

3 In about 2002, Ms Vasiliades acquired the land as registered proprietor and lived in it with her husband and children. In 2008 or 2009, they moved to Europe and lived there. She sold the property in 2014.

4 The land tax assessed, or reassessed, in 2015 under the Land Tax Act was $119,475 for both the 2009 and 2010 years and was $130,050 for the 2011 year.

5 Ms Vasiliades contends that the Commissioner did not have power to issue those assessments as he had previously issued assessments of land tax to her in respect of the property in the same amounts for the same years, but had then withdrawn them, under an agreement made with her.

6 Ms Vasiliades had been assessed for land tax in respect of the property for the same three years and amounts under s 8 of the Taxation Administration Act 1997 ('the TAA') in August 2011. She lodged an objection against the three assessments. The Commissioner determined her objection under s 101 and disallowed it. By letter dated 21 September 2012, Ms Vasiliades requested the Commissioner to refer the matter to the Victorian Civil and Administrative Tribunal ('VCAT') for review under s 106 of the TAA.

7 Before referring the matter to VCAT, the Commissioner made an offer to Ms Vasiliades' solicitor by letter dated 1 November 2012, as follows:

I refer to our telephone conversation today and also to your letter dated 21 September 2011 requesting that the Commissioner of State Revenue ('Commissioner') refer the above matter to the Victorian Civil and Administrative Tribunal for review ('Referral Request').

The Commissioner of State Revenue ('Commissioner') is prepared to resolve the matter by withdrawing the 2009, 2010 and 2011 land tax assessments (respectively numbered 69952531, 69952549 and 69952557), pursuant to s 14 of the Taxation Administration Act 1997.

The offer is conditional upon your client confirming in writing to the Commissioner that she withdraws her Referral Request by close of business Thursday, 8 November 2012. In this regard I have taken the liberty of preparing a draft form titled 'Notice of Withdrawal of Referral Request' (enclosed). If your client accepts the proposal, please return the signed copy of the form to this office by the due date, marked to my attention.

8 In response, Ms Vasiliades signed and returned the 'Notice of Withdrawal of Referral Request' to the Commissioner on 2 November 2012. There was no dispute that the Commissioner had power to make the withdrawal offer.

9 In a letter of 5 December 2012, the State Revenue Office informed the plaintiff that:

Principal Place of Residence Exemption

Thank you for your letter dated 30 November 2012 requesting a principal place of residence exemption in respect of the property at 3 Towers Road, Toorak.

The principal place of residence exemption has been granted for the above property from the 2009 year based on the information provided by you.

Please note that this exemption is conditional on the use of the land not changing. If the use of the land changes, it is your client's responsibility to contact the State Revenue Office, as the exemption may no longer be applicable.

The 2009, 2010, 2011 and 2012 assessments for Ms Celeste Vasiliades have been withdrawn.

10 Sections 13 and 14(1) of the TAA empower the Commissioner to withdraw an assessment. The Commissioner has powers to commence, defend and settle litigation.[1] These powers are also part of the Commissioner's general power of administration of the taxation laws conferred by s 63(1) of the TAA. The Commissioner in conducting litigation under s 64 of the Act has power to seek to resolve litigation efficiently and without due cost.

11 Under cover of a letter dated 10 August 2015, the Commissioner issued three documents entitled 'Re-Assessment - [year] Land Tax Notice' in respect of the land to the plaintiff for the 2009, 2010 and 2011 years. The reassessments again assessed the land for the same sums previously assessed.

The Taxation Administration Act 1997

8 General power to make assessment

(1) The Commissioner may make an assessment of a

tax liability of a taxpayer.

(2) An assessment of a tax liability may consist of or

include a determination that there is not a particular tax liability.

9 Reassessment[2]

(1) The Commissioner may make one or more reassessments of a tax liability of a taxpayer.

(2) Nothing prevents the Commissioner -

(a) from making a reassessment of a tax liability of a taxpayer after an amount previously assessed as being payable by the taxpayer has been paid; or

(b) from making a reassessment of a tax liability under which the taxpayer is assessed as having liabilities that are additional to or greater than those under the previous assessment.

(3) The Commissioner cannot make a reassessment of a tax liability more than 5 years after the initial assessment of the liability, unless -

(a) the reassessment is to adjust tax to give effect to a decision on an objection, review or appeal as to the initial assessment; or

(b) at the time the initial assessment or a reassessment was made, all the facts and circumstances affecting the tax liability under the relevant taxation law of the person in respect of whom the assessment or reassessment was made were not fully and truly disclosed to the Commissioner; or

(c) the reassessment is authorised to be made more than 5 years after the initial assessment by another taxation law.

(4) The time limited by subsection (3) applies even if the initial assessment is withdrawn.

13 Withdrawal of assessment

The Commissioner may withdraw an assessment at any time within 5 years after the date of service of the notice of assessment, whether or not the amount of tax specified in the notice of assessment has been paid.

14 Notice of assessment or withdrawal of assessment

(1) If the Commissioner makes or withdraws an assessment, the Commissioner must serve a notice of assessment or withdrawal on the taxpayer.

63 General administration of the taxation laws

(1) The Commissioner has the general administration of the taxation laws and may do all things that are necessary or convenient to give effect to the taxation laws.

(2) The Commissioner also has the functions conferred on him or her by or under any other Act.

64 Legal proceedings in Commissioner's name

(1) Legal proceedings may be taken by or against the Commissioner in the name "Commissioner of State Revenue".

13 Section 51 of the Land Tax Act 2005 states:

The Commissioner may make a reassessment of land tax under section 9 of the Taxation Administration Act 1997 more than 5 years after the initial assessment.

14 Section 54 contains the principal place of residence exemption.

15 The evidence in the proceeding was contained in an affidavit of the plaintiff and an affidavit of Ms Kelly Rewell, who is a senior investigator employed by the Commissioner of State Revenue.

16 The affidavit of Ms Vasiliades described the issuing of the assessments in 2011 and her making of objections to them. It also referred to the letter of 1 November 2012, and the notice of withdrawal referred to in the letter of 5 December 2012. Ms Vasiliades stated that upon these exchanges of correspondence, and upon the Commissioner acting on her withdrawal of the request that the matter be referred to VCAT by withdrawing the 2009, 2010 and 2011 assessments, she 'took it as read that the matter was at an end' and was closed, forever. She regarded the property as not attracting land tax for those years and thought that the matter had finally settled on clear terms with no qualifications, and that she would not have to pay $370,000 for land tax for those years. She pointed out that the Commissioner's letter of 1 November 2012 did not refer to any right, or option, for him to re-issue the same assessments, or any other assessments, if he changed his mind, or if he decided to conduct another investigation. If she had thought that the Commissioner might do that, she might well have decided not to withdraw her request that the matter be referred to VCAT. It may well have been more convenient for her to proceed with the VCAT hearing at that time as her memory of events would have been much better then.

17 She stressed that her position, that the land was her principal place of residence had not changed and that she had reluctantly left the house in 2008. She hoped, and wanted, to return to live in the house and that was the chief reason why she did not sell it until six years later in 2014. She did not rent it as it was always her intention to return to it. She had invested much in the house and kept it maintained while she was not living in it. She has now sold the house and has turned her attention to buying another house as she still intended to return to Melbourne. Her husband's family live in Melbourne, including her mother- in- law who is 91 years old. She did not give any further consideration to land tax issues until she received the State Revenue Office's letter of 8 April 2015. She had not budgeted on having to pay the Commissioner $370,000, nor considered that the Commissioner might change his mind about their agreement. She said that she took the Commissioner at his word.

18 On 8 April 2015, Ms Rewell informed Ms Vasiliades that the State Revenue Office had decided to commence a new investigation into her land tax liability for the property for the same years. By then, the property had been sold. Ms Rewell's letter, written on behalf of the Commissioner, stated that:

A further objection was lodged on Miss Vasiliades' behalf in August 2013 in relation to the 2012 and 2013 assessments for the Toorak property based on her continued intention to return to the property. Other than this Ms Vasiliades was advised in August 2014 that this objection was disallowed.

Information available to the SRO indicates that not all of the relevant facts and circumstances affecting the tax liability were fully disclosed during the initial investigation and as such this matter was subject to a new investigation.

You are required to forward all relevant information to Ms Vasiliades' eligibility for a PPR exemption and her intention to return to the Toorak property in relation to the 2009-11 assessment years via email or in the reply paid envelope enclosed by 24 April 2015.

19 Subsequently, Ms Vasiliades' accountant, Mr J Paolacci, wrote to Ms Rewell on 25 May 2015, stating in part:

Regarding the affidavit of Mrs Vasiliades relating to the ATO matter that you referred to in your discussion with Mr Paolacci, Mrs Vasiliades has advised that the statement in the affidavit was made in the context of the present whereby she had sold her home and made the decision to permanently leave Australia.

Further, Mrs Vasiliades confirmed that there was always an intention to return to Australia and this is evidenced by Towers Road being sold in 2014 (6 years later) and that, if the intention was never to return, the property would have been sold in 2008. The property was retained as the family home and not rented throughout this period.

20 The reference in the accountant's letter to an affidavit, was to an affidavit made in Federal Court proceedings, which are described below.

21 Ms Vasiliades made a statutory declaration dated 22 July 2015 in London which was forwarded to the SRO. In it, she recorded her address as in Paris, France and declared:

I made the statement 'In around August 2008, Socrates, our two daughters and I left Australia intending to live in Europe permanently' in the affidavit dated 6 November 2014 in the context of the present and at a time when I had sold the Property (my home) and had made the decision to permanently emigrate from Australia.

It was my understanding that if you leave Australia indefinitely you cease to be an Australian tax resident and you become a non-resident for Australian tax purposes. I used the term 'permanently' as a synonym for indefinitely. I meant 'permanently' in that context and never intended to emigrate permanently when I left Australia.

I confirm that it was always my intention to return to Australia and maintain the Property as my family home and this is evidenced by the Property being sold in 2014, six years after I left Australia. If the intention was never to return, the property would have been sold in 2008. Also, I confirm the property was not rented and significant costs were spent maintaining the Property. The Property was not rented because I wanted to always have the option to return to Australia without notice.

Further evidence of my intention at the time was provided to the ATO in a letter to them on 18 August 2011. In that letter, I advised the ATO that I had no other principal place of residence at that time and my family and I continued to maintain the Property as our principal place of residence. Also, in that letter I stated that my family and I resided in London in rental accommodation at that time and restated that my family and I continued to maintain the Property as our principal place of residence.

Accordingly, I firmly state that all relevant times that I maintained the Property, I had always intended to return to the Property.

22 Ms Vasiliades lodged a Notice of Objection to the reassessments. She requested the Court to examine the Commissioner's conduct.

23 In her affidavit, on behalf of the Commissioner, Ms Rewell stated that in May 2011 she was allocated an investigation file to verify the principal place of residence exemption under the Land Tax Act held by Ms Vasiliades for the land in Toorak.

24 As part of the investigation, she received a letter from Ms Vasiliades dated 25 May 2011 stating that she and her husband were temporarily absent from the land, but intended to return to it. Ms Rewell ascertained that a new building had been constructed on the land and completed in December 2007, however there was no occupancy permit for it.

25 On 29 August 2011, she wrote to Ms Vasiliades advising her of the outcome of the investigation and enclosing 2009, 2010 and 2011 land tax assessments in respect of the land.

26 Correspondence then ensued between the Commissioner and Ms Vasiliades. On 2 November 2012, Ms Vasiliades' signed the Notice of Withdrawal of Referral Request.

27 Ms Rewell next stated that on 2 April 2015 she was allocated an investigation file to verify the principal place of residence exemption held by Ms Vasiliades. She explained that it had been discovered that the Federal Court's decision in the matter of Deputy Commissioner of Taxation v Vasiliades[3] contained information that may be relevant to the exempt status of the land. That decision, which concerned the Deputy Commissioner's application for freezing orders against specified assets of Mr and Ms Vasiliades, referred to affidavit evidence provided by them that, when they left Australia in August 2008, they did so with the intention of living overseas permanently. Ms Rewell obtained copies of those affidavits.

28 Ms Vasiliades made a statutory declaration on 22 July 2015 that was provided to the defendant. I have set it out previously.

29 Ms Rewell stated that, after reading Ms and Mr Vasiliades' Federal Court affidavits, she formed the view that the evidence contained in them was in complete contrast to what Ms Vasiliades had previously advised the State Revenue Office of her intention to return to the land after she had left for Europe in August 2008. She was not convinced by the Ms Vasiliades attempt to explain the inconsistency between the affidavit evidence and the disclosures that she had previously made to the SRO about her intention to return to the land. She considered that the statements made in the affidavits were clear and should be taken at face value and was satisfied that the requirements of s 56(1)(b) of the Land Tax Act 2005 were not met and that the principal place of residence exemption in s 54 did not apply to the land for the 2009 to 2011 years.

30 On 10 August 2015, Ms Rewell wrote to Ms Vasiliades advising her of the outcome of the second investigation and enclosing 2009, 2010 and 2011 land tax reassessments in respect of the land. The reassessments for 2009 and 2010 were each for the sum of $119,475 and that for 2011 the sum was for $130,050.

31 The plaintiff contended that the reissue of the assessments for the three years had no legal effect as the Commissioner had no power to reissue them. The issue of the reassessments was a decision affected by jurisdictional error.[4] The Commissioner's statutory power to issue assessments was exhausted because of the settlement agreement of 2012, by which the Commissioner promised to withdraw the assessments and then did so. The Commissioner's agreement to withdraw the assessments did not permit him to reissue them at a later point in time.[5] After agreeing to withdraw the assessments, the Commissioner's power to reissue them was exhausted, or at least, he had agreed not to exercise that power.

32 Sections 13 and 14(1) of the TAA provide for the Commissioner to withdraw an assessment by the Commissioner. The Commissioner's statutory power to assess the land for the years in question was exhausted upon Ms Vasiliades accepting the Commissioner's offer to withdraw the three assessments unconditionally. The Commissioner had denied himself the ability to reassess the land for those years and he had made a jurisdictional error by purporting to exercise power to reissue them. Had the Commissioner wanted to not forfeit the right, or power, to reassess, he could have added a term to the settlement offer reserving that right. The terms of the settlement agreement were inconsistent with the reservation of any right or power to reassess the for the same years. The Commissioner had denied himself the ability to reassess the land for those years. To decide otherwise, would sanction the breaking of settlement agreements by the Commissioner.

33 Ms Vasiliades relied on the decision of the High Court in Cox v Deputy Federal Commissioner of Land Tax[6] in which the appellants lodged an appeal against an assessment of land tax by the Commissioner issued in February 1913. The Commissioner had previously issued to the appellants an assessment of land tax in October 1911. Before the appeal was heard, the Commissioner gave notice to the appellants that he accepted their contention. The appellants did not proceed with the appeal and withdrew it and the Commissioner paid their costs. At a later point, the Commissioner issued to the appellants a notice of amended assessment by which he assessed the unimproved value of the estate. The appellants appealed that further assessment and a case was stated for the High Court raising questions including:

whether, under the circumstances hereinbefore stated, it was competent for the respondent to issue the notice of 22nd February 1913, or whether it is precluded from doing so by the proceedings taken upon the appellants' appeal instituted in 1911.

34 Griffith CJ, delivering the judgment of the Court,[7] concluded that it was not competent for the Commissioner to issue the further assessment. He stated:

The trustees thereupon gave notice of appeal against that amended assessment on the ground that the widow was entitled to the benefit of sec. 25. The appeal was set down for hearing in this Court, but before it could come on for hearing the respondent gave notice to the appellants that he submitted to their contention. They thereupon gave notice to the Registrar that the appeal was withdrawn, and the respondent paid them their costs of the appeal and refunded to them the excess amount which they had, as required by law, paid as soon as the amended assessment was made.

So the matter appeared to have ended. But in 1913 the respondent issued a notice purporting to be an amended assessment, in which he reasserted his former claim of 1911. The trustees object, that under the circumstances I have stated, the respondent is precluded from doing so. They contend that the proceedings which took place upon the appeal of 1911 had the effect of a settlement of the matter in litigation between parties, and further that in effect the respondent is now seeking to recover from the appellants a sum of money which was paid by him to them under an alleged mistake of law, namely, thinking that the widow was entitled to the benefit of sec. 25 of the Act.

The first question submitted by the case is whether the respondent is so precluded. Though some doubt occurred to my mind during the progress of the case, I have come to the conclusion that he is. The matter was in an actual litigation between the parties in the manner prescribed by the Act. While that litigation was pending an agreement was come to by which the respondent submitted to the appellants' claim, paid their costs and paid the amount claimed from him. Under those circumstances it seems to me impossible to reopen the matter. Although it is not, strictly speaking, res judicata, the compromise followed by payment operates as an executed agreement for valuable consideration. No reason has been suggested why, having regard to the provisions of the Act as to appeal and the direction that the money held by the Court to be overpaid shall be refunded, such an agreement should not be binding on the Crown. I think the same effect should be given to this compromise as to a compromise of an action for the recovery of money paid under compulsion. An appeal under this Act is, in substance, such an action, and it would be strange, indeed, if in such a case, where the money claimed has been recovered by the action upon a settlement of it, the defendant should afterwards be allowed to bring another action to recover it back from the plaintiff. I think, therefore, that the first question should be answered to the effect that the respondent was precluded from issuing the notice of 22nd February 1913.[8]

35 Ms Vasiliades submitted that the provisions of s 40(a) of the Interpretation of Legislation Act 1984 had no application, because the TAA gave the Commissioner the power to issue reassessments. The Commissioner's promise to withdraw the assessments without any reservation removed any role for s 40(a). She relied on the judgment of Gummow J in Minister for Immigration and Ethnic Affairs v Kurtovic,[9] for the proposition that in a given case, a discretionary power may be of such a character that it is not exercisable from time to time.

36 Ms Vasiliades made detailed written submissions about the ambit of the judicial review available to her in respect of the reassessments, but the Commissioner did not contest her right to seek that remedy as a matter of law.

37 The Commissioner submitted that the assessments were valid because:

(a) his power to make an assessment, or a reassessment, entailed a power to reissue assessments that were previously made and then withdrawn, whenever, on reexamination, he was of the opinion that the assessment should again be made;

(b) his power to make an assessment, or a reassessment, was not 'spent' by his entry into an arrangement, styled by Ms Vasiliades as a 'settlement agreement', in which he agreed to withdraw the initial assessments; and

(c) by reissuing assessments, after having withdrawn the initial assessments in performance of the alleged 'settlement agreement', the Commissioner did not exercise the power of assessment, or reassessment, improperly, let alone in a way that constituted conscious maladministration.

38 The Commissioner submitted that his power to issue the reassessments in 2015 was not irrevocably 'spent' by his withdrawing the original assessments, whether or not it was characterised as a reexercise of the power to make an assessment or the power to make a reassessment. He relied on four reasons for that proposition. First, the words of ss 8 and 9 did not limit his general power to make assessments and reassessments of a taxpayer's tax liabilities in circumstances where an assessment had been withdrawn.

39 Secondly, the basic principle of 'tax doctrine' is that an assessing officer has a statutory public duty to issue correct assessments to the taxpayer.[10]

40 Thirdly, a construction of the TAA by which the Commissioner was found to have no power to reissue the assessments that he had previously withdrawn would lead to absurd results.

41 Fourthly, s 40(a) of the Interpretation of Legislation Act created a presumption that the Commissioner's power to make assessments and reassessments may be exercised 'from time to time as the occasion requires'. Section 40(a) states:

Exercise of powers and performance of duties

Unless the contrary intention appears, where an Act or subordinate instrument confers a power or imposes a duty, the power may be exercised and the duty shall be performed -

(a) from time to time as occasion requires.

42 The TAA does not contain a contrary intention for the purposes of s 40(a) and the Commissioner's powers of assessment or reassessment may be exercised 'from time to time'.

43 The Commissioner relied on information obtained after the original assessments had been withdrawn that suggested that the principal place of residence exemption from land tax did not apply because Ms Vasiliades had gone to live in Europe. The Commissioner, after further investigation, had decided that the property had not been the principal place of residence of Ms Vasiliades at the relevant times. His power of assessment or reassessment was not spent. Under s 9 of the TAA, the Commissioner can make reassessments. The Commissioner could not deprive himself of the power to issue assessments[11] and he had issued them within the permitted time.

44 The Commissioner had not agreed to assess the taxpayer's tax liability at nil, nor had he compromised the amount of any debt to be recovered on an assessment. The agreement was only to withdraw the original assessments. There was no agreement that the Commissioner would not re-exercise the power to issue assessments. Ms Vasiliades' action was not to enforce an agreement and Cox's Case[12] was distinguishable on that ground.

45 There was no abuse of power in carrying out further investigations into a taxpayer's taxable income after a judgment in a case.[13] Ms Vasiliades retained her rights to challenge the reassessments.[14]

46 The facts in Cox's Case[15] were also distinguishable, because s 46 of the Land Tax Assessment Act 1910 showed an intention that the taxpayer's litigation before the court would determine finally, and conclusively, the taxpayer's tax liability. Proceedings in VCAT do not do that.

47 It is important to state at the outset that the Court is considering whether the Commissioner had the power to make the reassessments for the years 2009, 2010 and 2011 and not whether, as a matter of merit, they should have been issued. Ms Vasiliades did not contend that the Commissioner's action involved an abuse of power in the public law sense. Rather, she contended that the Commissioner lacked power.

48 I accept the Commissioner's submissions. The power to issue assessments, as contained in s 8 of the TAA, is that 'the Commissioner may make an assessment of a tax liability of a taxpayer'. Section 9 confers the power to issue reassessments.

49 The Commissioner did agree to withdraw the original assessments. The question is whether that agreement spent or removed the Commissioner's power to issue reassessments. I do not consider that it did. The agreement was to withdraw assessments made under s 8, but the Commissioner's powers under s 9 remained. There was no agreement or promise not to exercise those powers. There was no executed agreement made for valuable consideration of the kind present in Cox's Case.[16]

50 The power to assess is not exercisable once and for all. In any event, there is also the power conferred by s 9 to issue one or more reassessments. That power is to be interpreted in accordance with s 40(a) of the Interpretation of Legislation Act. In Pfeiffer v Stephens, Gleeson CJ and Hayne J said, of the Queensland equivalent of s 40:

The purpose of such an interpretative provision is to permit economy of language. Like the interpretative provision to the effect that the singular includes the plural, it means that to employ the language of singularity does not indicate an intention to deny plurality. If such an intention exists, it must be found elsewhere. Section 860 of the (Queensland legislation under consideration) was an act that in the light of section 23(1) of the [Queensland] Acts Interpretation Act and should be understood accordingly.[17]

51 There is no indication in ss 8 and 9 of the TAA of a contrary intention to the presumption contained in s 40(a). The Commissioner's powers were to be exercised from time to time as the occasion required, whether or not a change in relevant circumstances had occurred. In Minister for Immigration and Ethnic Affairs v Kurtovic,[18] Gummow J, with whom Ryan J relevantly agreed, said:

In the present case, there is nothing in the Migration Act which suggests an intention contrary to the presumption embodied in s 33(1) of the Interpretation Act 1901, to which I have already referred. Accordingly, the power to make a deportation order is exercisable from time to time, so as to revoke or revive a deportation order previously made, whether on the same facts as before or otherwise. Even if the facts upon which the original decision was based remain constant, it may be the policy of the donee of the power which changes and thus requires a reconsideration of decisions previously made [authority omitted]. The significance of a change in either of the facts or in ministerial policy would go merely to the merits of the decision upon which the Court is not entitled to decide. The appellant could not therefore have been functus officio, and an estoppel could not be allowed which would have the effect of stifling the future exercise of the statutory discretion.

52 There are High Court decisions that emphasise the width of the power of taxation authorities to issue amended taxation assessments. The decision of The Trustees, Executors and Agency Co. Ltd. v Commissioner of Land Tax,[19] concerned s 20 of the Land Tax Assessment Act 1910. The Commissioner had issued an assessment, which was paid. He then issued an amended assessment increasing the tax payable. The tax payers paid the additional tax. The Commissioner issued two further amended assessments, lowering the tax payable and an amount was refunded to the tax payers. The Commissioner then issued another amendment increasing the tax payable to an amount higher than the first amended assessment. The High Court held that the Commissioner was empowered to do so under s 20, which gave him power to make alterations in, or additions, to assessments:

as he thinks necessary in order to ensure its completeness and accuracy, notwithstanding that land tax may have been paid in respect of the land included in the assessment.

There is nothing in the language of this section to suggest that the power to alter or add to an assessment cannot be exercised more than once. If any doubt could arise on the point it is, in my opinion, removed by s 33 of the Acts Interpretation Act 1901 which provides that - "(1) Where an Act confers a power or imposes a duty, then, unless the contrary intention appears, the power may be exercised and the duty shall be performed from time to time as occasion requires."

The suggested limitation of the power of the Commissioner must therefore be sought for elsewhere.[20]

Sec. 20 is couched in the most general terms. In itself it contains no limit to the power therein given to the Commissioner to alter and amend an assessment as often and as radically as he thinks necessary to make it complete and accurate. And he may do it, 'notwithstanding that land tax may have been paid.'[21]

55 In Liverpool, London & Globe Insurance Co Ltd v Federal Commissioner of Taxation (Cth),[22] Knox CJ had concluded that the Commissioner was not entitled to treat the assessments previously made as existing assessments capable of being altered or added to. That decision was not followed in W & A McArthur Ltd v Federal Commissioner of Taxation,[23] where the Commissioner had issued an assessment under the War-time Profits Act 1917, subsequently cancelled it, then issued an amended assessment some years later. The taxpayer argued that as the original assessment was cancelled, there could not subsequently be in law any amendment of the non-existing original assessment.

56 Isaacs CJ adopted a different approach, stating:

Section 28 makes provision for a taxpayer dissatisfied with his assessment stating his objection to it. The Commissioner is directed to consider the objection, and is empowered to 'disallow it, or allow it', either wholly or in part. Disallowance may be referred by the taxpayer to the Court, as in the present instance. But 'allowance', like 'disallowance', is a mere administrative act. The Commissioner is empowered to bind the Treasury by allowance, but there is nothing to prevent him from recalling it, should he see reason to do so. The power to recall it must stand in the same position as the power to recall a disallowance. It would be an extraordinary conclusion to arrive at, that, once he disallows an objection he cannot allow it. It would be in conflict with the quoted words of sec. 23.[24] Suppose, for instance, a taxpayer claiming a deduction by way of an objection, submits to the Commissioner's view that the law does not permit, and so pays the tax claim. Is it possible, in view of sec. 23, to deny the power, and, indeed, the moral duty of the Commissioner, ex mero motu, if he alters his view of the law, or if the Court declares it wrong in some other case, to give effect to the true law by allowing the objection formally disallowed? But if so, the same thing must be said of the allowance of an objection. There is every reason for giving full effect to the words of sec. 23. There must be an assessment for each year in respect of every business to which the Act applies, be it right or wrong. If right, it must be enforced; if wrong, it must be corrected or declared wrong. Its existence cannot be administratively annihilated, but it may be altered from time to time until the Court finally declares the mutual rights of the Crown and the taxpayer. When that is done, the general principles of law apply to make the contest final and the rights unchallengeable. I cannot agree with the Liverpool Insurance Co case...[25]

57 While cases about the issuing of amended or further assessments decided under different revenue legislation are of general guidance, the key issue to consider is the powers of the Commissioner given by the TAA and the ambit of any agreement that he reached with Ms Vasiliades about how he might exercise those powers.

58 All the relevant provisions of the TAA must be taken into account in considering whether the Commissioner's power was spent in the circumstances of this case. Section 8 of the TAA gave the Commissioner the power to make an assessment. Section 13 conferred the power to withdraw an assessment. Section 9 gave the Commissioner the power to make one or more reassessments. Sections 8, 9 and 13 contain separate grants of power and authority. The Commissioner and Ms Vasiliades reached an agreement that he would withdraw the original assessments. No agreement was reached about the exercise of the power to reassess. It is unnecessary to decide if the Commissioner could make such an agreement. I do not consider the Commissioner's power to issue the reassessments was spent. It was contained in s 9 and no agreement was reached about its exercise.

59 There may be cases where the making of reassessments is an abuse of the Commissioner's statutory power. It is inappropriate to attempt any general description of the circumstances when such an abuse of power might occur. One possible instance might be where the reassessments were based on entirely the same factual foundation as the original assessments. Ms Vasiliades did not suggest that the Commissioner abused the statutory power conferred on him, rather she contended that he had no power left to exercise. I do not agree with that submission. The Commissioner, at least, had the power to make 'one or more reassessments' of land tax liability.

60 In my opinion, the plaintiff has not established any jurisdictional error by the Commissioner in issuing in 2015 the land tax reassessments for the 2009, 2010 and 2011 years.

[1] Section 64 (1) of the TAA and Landrow Properties Pty Ltd v Commissioner of State Revenue [2009] VSC 108 [12].

[2] Reassessment is defined by s 3(1) to mean reassessment of tax liability under section 9.

[3] [2014] FCA 1250.

[4] Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, 177-8.

[5] The plaintiff relied on Precision Pools Pty Ltd v Commissioner of Taxation [1992] FCA 445; (1992) 37 FCR 554.

[6] [1914] ArgusLawRp 10; (1914) 17 CLR 450 ('Cox's Case').

[9] [1990] FCA 22; (1990) 21 FCR 193,211.

[10] The Commissioner referred to Stewart v Deputy Commissioner of Taxation [2010] FCA 402; (2010) 267 ALR 637 and Macquarie Bank Ltd v Commissioner of Taxation [2013] FCAFC 119 and Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No 2) [1991] FCA 518; (1991) 32 FCR 243,249.

[11] See Stewart v Deputy Commissioner of Taxation [2010] FCA 402; (2010) 267 ALR 637, [9]-[10]; Macquarie Bank Limited v Commissioner of Taxation [2013] FCAFC 119, [11].

[12] [1914] ArgusLawRp 10; (1914) 17 CLR 450.

[13] Chemical Trustee Limited v Deputy Commissioner of Taxation (2014) 308 ALR 366.

[14] Cf Metricon Qld Pty Ltd v Commissioner of State Revenue [2013] NSWSC 982.

[15] [1914] ArgusLawRp 10; (1914) 17 CLR 450.

[17] [2001] HCA 71; (2001) 209 CLR 57, 65 [25].

[18] [1990] FCA 22; (1990) 21 FCR 193, 218-9; cf Re Chan and Minister for Immigration and Ethnic Affairs ( 1977) 17 ALR 432, 441-2 (Smithers J).

[19] [1915] HCA 35; (1915) 20 CLR 21.

[22] [1927] HCA 18; (1927) 40 CLR 108.

[23] [1930] ArgusLawRp 91; (1930) 45 CLR 1.

[24] Section 23 gave power to make alterations in or additions to any assessment to ensure its completeness and accuracy, notwithstanding that tax may have been paid in respect of profits included in the assessment.

[25] Ibid 9-10 and Starke J at 21 and the answers given by the Court at 21 to the questions posed at 4-5. Rich J, with whom Gavan Duffy J agreed, adopted a different approach.