Rosgoe Pty Ltd v Commissioner of Taxation

JUDGE: LOGAN J DATE: 13 NOVEMBER 2015 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 It is now approaching a quarter of a century since the private ruling regime was introduced, in its original form, into the Taxation Administration Act 1953 (Cth) (TAA) by the Taxation Laws Amendment (Self Assessment) Act 1992 (Cth). Since then, in substance unchanged, the private ruling regime has migrated to the densely populated territory of Schedule 1 to the TAA, where it now forms part of Part 5-5 - Rulings. Within Part 5-5, the private rulings regime is found in Division 359 - Private rulings. 2 As CTC Resources NL v Commissioner of Taxation (1994) 48 FCR 397 and Commissioner of Taxation v McMahon (1997) 79 FCR 127 (McMahon), each judgements of the Full Court delivered early in the life of the private ruling regime, attest, the intricacies of complying with the formal requirements of that regime, either in the making or on the review of a private ruling, presented challenges for the Commissioner of Taxation and, on review, the Administrative Appeals Tribunal (Tribunal). This case illustrates that those challenges remain with us. 3 Rosgoe Pty Ltd (Rosgoe) is the trustee of a discretionary trust known as the Rosgoe Trust (the trust). By an application dated 11 December 2013, Rosgoe applied to the Commissioner for a private ruling in relation to the proposed sale of two adjacent parcels of land at Indooroopilly (the Property), which formed part of the property of the trust. 4 In the ruling application Rosgoe furnished details of particular background facts and requested the Commissioner to rule upon two questions. Those questions and the answers which the Commissioner came to give them by his private ruling dated "28 January 2013" [sic] (in fact, 2014, illustrating that those in public administration are not immune from an embarrassment a good many of us face each New Year) were as follows: Question 1 Is the proposed sale of the Property a mere realisation of a capital asset and hence taxable on capital account under the capital gains tax (CGT) rules for the purpose of the taxation legislation? Answer No Question 2 If the answer to question 1 is affirmative, is the Commissioner satisfied, in respect of the sale of the Property, that: (a) your 'projected goods and services tax (GST) turnover' is below the relevant threshold (b) you are not required to be registered for GST, and (c) the supply of the Property is not a taxable supply? Answer Not applicable. The answers to these questions constituted the Commissioner's ruling. 5 The ruling was made on the basis of an arrangement identified by the Commissioner. In light of the issues which arise for determination in this statutory appeal, it is necessary to set out in full the arrangement identified. Relevant facts and circumstances This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. The arrangement that is the subject of the private ruling is described below. This description is based on the application for private ruling dated 12 December 2013 and the accompanying documents. These documents form part of and are to be read with this description. You are a discretionary trust settled by a deed dated 20 August 2004 with Rosgoe Pty Ltd as your Trustee. The directors and shareholders of your Trustee are Greg Wright and Ross Badcock. Mr Wright and Mr Badcock are named as your primary beneficiaries in the Trust deed. Mr Wright and Mr Badcock have a history of property development through other entities. Their experience involves the physical construction of premises on land for the purpose of sale. Both have skills and expertise in the project management of construction activities. The Property is comprised of two adjacent lots: (a) 15 Lambert Road, Indooroopilly ('Lot 1'), and (b) 181 Clarence Road, Indooroopilly ('Lot 2). Lot 1 was purchased and registered on 28 March 2006 with one derelict vacant house situated on the lot. It was leased to Queensland Rail for a period of 18 months from July 2007 to December 2008 for use as a works depot. Since 1 November 2012 the property has been let to Shamrock Civil Engineering for use as a works depot. Lot 2 was purchased and registered on 23 August 2007 with a tenanted house on the lot. The house has been continuously tenanted since the purchase of the property by you. You acquired the Property with the intention of developing and selling it as part of a joint venture with Indigo, a large property developer. An email, dated 6 February 2009, summarises discussions between Indigo, Mr Badcock and Mr Wright regarding the joint venture. During the 2009-10 financial year the negotiations with Indigo fell through. You were unable to secure funding and decided to abandon your intention to carry on a development business and develop the Property. You state that at this point you ceased to hold the Property as trading stock and began to treat it as a capital asset. The financial statement for the year ended 30 June 2012 shows an asset Land and buildings with a book value of $3,068,367. You have not provided any details of whether you have acquired other land or buildings. You engaged an associated development management company, R & L Badcock Builders Pty Ltd (Badcock Builders) to obtain development approval (DA) for the Property to improve its anticipated price on sale. Mr Badcock is the sole shareholder and director of Badcock Builders. The DA was obtained by Badcock Builders on 20 September 2013 for development of the Property as a ten storey residential development. You played no part in obtaining the DA. You engaged real estate agents to sell the Property on your behalf. You entered into a contract on 9 December 2013 to sell the Property. The date for settlement of the contract is 27 February 2014. The DA is the sole improvement to the property and there has been no physical improvement to the property. [sic] 6 In advising Rosgoe of his ruling, the Commissioner also furnished reasons. In so doing, the Commissioner explicitly stated that those reasons "are not part of the private ruling" and that they were provided, "to help you to understand how we reached our decision". In those reasons, the Commissioner expressed the view that Rosgoe was not carrying on a business of property development. A corollary of this was the Commissioner's conclusion that the Property was not at any time during Rosgoe's ownership of it trading stock, only a capital asset. 7 Elsewhere in his reasons, the Commissioner stated that the Property had been acquired with the intention that it be developed and sold at a profit and that, even though the profit "was not obtained via the original means envisaged" it was nonetheless sold at a profit. The Commissioner stated that he "considered that an isolated transaction was entered into, and the profit was made in carrying out a commercial transaction". 8 Being dissatisfied with the ruling, Rosgoe objected to it. On objection, the Commissioner adhered to the ruling. Rosgoe then sought the review of the objection decision by the Tribunal. 9 The Tribunal decided to affirm the objection decision. It did so primarily because it made, or at least purported to make, a finding of fact that Rosgoe was engaged in carrying on a business during the relevant period. It is necessary to acknowledge the possibility that the finding was "purported", because the essence of Rosgoe's challenge in this appeal was the resolution of the question as to whether the Tribunal had any power to make such a finding, given the jurisdiction it was exercising and the arrangement identified by the Commissioner in his ruling. 10 To understand further the Tribunal's primary basis for the affirming of the objection decision and the occasion for Rosgoe's challenge, it is necessary to set out the following passage from the Tribunal's reasons (at [20] - [21]): 20. The question of whether or not a taxpayer is engaged in a business is a question of fact. The cases make it clear that one must look to a range of indicia that might suggest the taxpayer was (or was not) engaged in a business, as opposed to a single transaction, or something else. I am inclined to think the taxpayer in this case was conducting a business of property development. The ruling (including the email of 6 February 2009) notes: ◦ the directors of the taxpayer were experienced builders, and it is clear they were bringing that experience to bear in the course of the development; ◦ the taxpayer organised finance and acquired the two conjoined parcels of land in separate transactions with a view to their aggregation; ◦ the taxpayer's directors engaged in negotiations with a prospective joint venture partner on the details of how the development would proceed, and be financed; and ◦ when the negotiations with the prospective joint venturer failed, interests associated with the directors of the taxpayer set about obtaining development approval - a reasonably complex endeavour. (If I understand the taxpayer's argument correctly, the fact the taxpayer had someone else act on its behalf tended to suggest the taxpayer was not itself engaged in a business. That does not necessarily follow: the practice of engaging and working with others to achieve an agreed end may in fact indicate the existence of a business.) 21. It follows I do not accept the taxpayer's claim that it was not engaged in a business at all during the relevant period. Moreover I am satisfied the business described in the ruling - especially having regard to the fourth dot point in the email of 6 February 2009 which refers to "mov[ing] the project forward to Development Approval stage to achieve the best outcome possible for the site and JV partners" - contemplates a business that is broader than developing the property in a particular way with the participation of a particular joint venturer. I accept the email in particular is evidence that the taxpayer contemplated the property being resold at a profit after obtaining development approval, even if that was not the preferred option. I accept the sale occurred in the ordinary course of the taxpayer's business, which means that profits generated by the sale should be brought to account as ordinary income. 11 The Tribunal made an alternative finding of fact as to Rosgoe's objective of achieving "the best possible outcome", drawing upon a statement in the email of 6 February 2009, referred to in the passage quoted from its reasons. That finding was that, even if the transaction which had generated the gain did not occur in the course of Rosgoe's carrying on a business but was instead an isolated or unusual one, it nonetheless had a profit-making purpose from the outset. For this reason also, the Tribunal considered that the amount of the gain constituted ordinary income for the purposes of s 6-5 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997). In this regard also, Rosgoe contended that the Tribunal had, by making this finding of fact, misconceived the review function consigned to it in respect of objection decisions concerning private rulings. 12 On a review of an objection decision in respect of a private ruling, the Tribunal is not permitted to redefine the "arrangement" as stated by the Commissioner in his ruling. Put another way, the Tribunal may not itself engage in a fact finding exercise. Rather, the Tribunal must form its own view as to how a taxation law applies to an arrangement it takes as a given. To highlight the correctness of these propositions, reference may be made to the following passages from McMahon - per Lockhart J, at 133: In my opinion on a process of review the Tribunal cannot redefine the arrangement. The Tribunal is limited to the facts that constitute the arrangement as identified by the Commissioner in his own ruling. I agree with the submission of counsel for the taxpayer that the arrangement is a "constant" and a ruling is about how a tax law applies to that arrangement. The question for the Tribunal is whether the Commissioner's opinion as to the application of the law concerning the arrangement is correct. In considering the correctness or otherwise of the objection decision the Tribunal must be limited to the facts as identified by the Commissioner in his ruling as constituting the arrangement. In making his decision about the private ruling the Commissioner is bound by the facts said by him to constitute the arrangement as identified in the ruling. Nor can the Tribunal travel beyond those facts as identified in the ruling. What the Tribunal does is to "go over again" the objection decision to consider what it thinks should be the proper answer to the question about the way in which the relevant tax law operated on the identified facts constituting the arrangement: Comptroller-General of Customs v Akai Pty Ltd (1994) 50 FCR 511 at 521 and the cases there cited. Per Beaumont J, at 140: … [T]he statutory character of the private ruling is that of an advisory opinion on a particular question, that is, the way in which the tax legislation would apply to the person in respect of a year of income in relation to an "arrangement" . It is equally plain from the language of s 14ZAZA(l), and from its evident purpose, that the subject of any objection to the ruling is the same question, that is, the way in which the tax legislation would apply to the person in respect of the year of income in relation to the arrangement. It must follow, in my opinion, that the subject of any review of that taxation decision and of any review or appeal relating to the ruling will be that question, and no other or different question. In that sense, "the stream can rise no higher than its source" and that source is the construct constituted by the "arrangement", as nominated and identified by the applicant for the ruling. Per Emmett J, at 149-150: Once it is accepted that the scheme of the private ruling provisions is to enable a Taxpayer to obtain a binding ruling on a question of law, it follows that, on the hearing of an application to the Tribunal for review of an objection decision, the only function which the Tribunal is to perform is to review the opinion of the Commissioner, as stated in the ruling, as to the way in which the relevant tax law applies to the arrangement which is the subject of the ruling. There is simply no cause for the Tribunal to investigate whether the facts and circumstances which are the subject of the ruling accord with the true facts or not. Indeed, that would be an impossibility where the ruling was sought in relation to an arrangement consolidated by facts and circumstances which had not yet occurred. 13 Even though these statements were made in relation to the effect of the provisions in the TAA concerning private rulings prior to their migration to Schedule 1 to that Act, they remain apt. This is evident from s 359-20 and s 357-100 in Schedule 1, which provide: 359-20 Private rulings must contain certain details (1) A *private ruling must state that it is a private ruling. (2) A *private ruling must identify the entity to whom it applies and specify the relevant *scheme and the relevant provision to which it relates. 357-110 Assumptions in making private or oral ruling (1) If the Commissioner considers that the correctness of a *private ruling or an *oral ruling would depend on which assumptions were made about a future event or other matter, the Commissioner may: (a) decline to make the ruling; or (b) make such of the assumptions as the Commissioner considers to be most appropriate. (2) Before making the ruling, the Commissioner must: (a) tell the applicant which assumptions (if any) the Commissioner proposes to make; and (b) give the applicant a reasonable opportunity to respond. 14 The word, "scheme" is defined by s 995-1 of the ITAA 1997 (Cth) in this way: "scheme" means: (a) any *arrangement; or (b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise. "Arrangement" is also defined by s 995-1 of the ITAA 1997 but it is not necessary to set out that definition. The point is that, given that definition of "scheme" includes "arrangement", there was no particular vice in the Commissioner's use of the word "arrangement" in his ruling. For a like reason, that there is reference to "arrangement" in the passages quoted from the judgements delivered in McMahon and that the word "scheme" is used in the present Part 5-5 - Rulings is a distinction without a difference so far as the continued applicability of the observations made in those passages is concerned. 15 Later in time than McMahon is Cooperative Bulk Handling Ltd v Commissioner of Taxation (2010) 79 ATR 582 (Cooperative Bulk Handling), in which, at [15] - [16], Gilmour J offers a helpful and succinct summary of the authorities, including McMahon, concerning the private ruling system: 15. When making his ruling the Commissioner does not make findings of fact. Rather he identifies facts and states his opinion about the way the tax laws apply to those facts. It is open to him to describe a scheme by incorporating descriptions from other documents and/or by reference to listed documents and correspondence. The facts, insofar as the incorporated and referenced materials include assertions of fact, are used in the scheme description on the basis that the facts stated by the applicant are correct. Their use does not amount to findings of fact or the acceptance of facts by the Commissioner: FCT v McMahon (1997) 79 FCR 127 at 133; 37 ATR 167 at 172; 97 ATC 4986 at 4990; 149 ALR 159 at 164; Bellinz v FCT (1998) 84 FCR 154 at 160; 39 ATR 198 at 205-204; 98 ATC 4634 at 4639; 155 ALR 220 at 225-226; Lamont v FCT (2005) 144 FCR 312 at 326 [23]; 59 ATR 374 at 387 [23]; 2005 ATC 4411 at 4422 [23]; 219 ALR 678 at 690-691 [23]. 16. In reviewing the Commissioner's opinion on the application of the law to the specified scheme, the only material to which the court can have regard is the ruling and documents identified in the description of the scheme which were either provided by the applicant or were used by the Commissioner: Bellinz v FCT (1998) 84 FCR 154 at 160; 39 ATR 198 at 204; 98 ATC 4634 at 4639; 155 ALR 220 at 226. The court is confined by the scheme description in the ruling, which remains constant throughout any appellate process. Neither the Commissioner nor the applicant can make good any deficiency in the scheme description. The court is unable to consider a different scheme; it cannot investigate the facts on which the Commissioner's opinion was formed and make its own findings of fact, make assumptions, re-define the scheme or create its own description of the scheme: Hastie Group Ltd v FCT (2008) 172 FCR 496 at 498 [3]; 2008 ATC 20-076 at 9088 [3]; 79 ATR 390 at 392 [3], (a case under Div 359 of the TAA); FCT v McMahon (1997) 79 FCR 127 at 133, 141 and 145; 37 ATR 167 at 172, 179-180 and 183; 97 ATC 4986 at 4990, 4996 and 4999-5000; 149 ALR 159 at 164, 171-172 and 175-176; Lamont v FCT (2005) 144 FCR 312 at 318 [13], 319 [21] and 320 [26]; 59 ATR 374 at 380 [13], 381 [21] and 382 [26]; 2005 ATC 4411 at 4416 [13], 4418 [21] and [26]; 219 ALR 678 at 683 [13], 684 [21] and 685 [26]. [Emphasis added] An appeal from his Honour's judgement in that case was subsequently dismissed: Commissioner of Taxation v Co-operative Bulk Handling Ltd (2010) 189 FCR 322. Nothing that was stated in the Full Court calls into question the accuracy of his Honour's summary of the role undertaken by the Court in relation to the private ruling system; indeed, none of the judges constituting the Full Court felt it necessary to pass upon that subject at all. McMahon demonstrates that the observations made by Gilmour J in his summary as to the Court's role are just as applicable to the Tribunal's role. 16 The point of all this is that, in describing the "arrangement", the Commissioner stated, "You were unable to secure funding and decided to abandon your intention to carry on a development business and develop the Property." [Emphasis added]. Nowhere in his description of the "arrangement" does the Commissioner record that Rosgoe carried on a business. Yet, having recited (Reasons, para 20), correctly, that the question of whether a taxpayer is engaged in a business is one of fact, the Tribunal went on to find as a fact (Reasons, para 21), in the purported exercise of the review jurisdiction consigned to it in relation to a private ruling, that Rosgoe was carrying on a business at all material times. This was something the Tribunal could not do. The passages quoted from McMahon and the summary offered by Gilmour J in Cooperative Bulk Handling make this pellucid. 17 The form of review which the Tribunal conducts in relation to a private ruling has a very particular, perhaps even peculiar, quality about it by comparison with the more usual form of merits review undertaken by the Tribunal. Materially and in a revenue law context, when conducting a review on the merits of an objection decision in respect of an assessment, the Tribunal is fully able to reach its own conclusions of fact and law in, for example, deciding that a particular profit on the sale of property is or is not ordinary income. In so doing, the Tribunal is in no way bound by whatever conclusions of fact which the Commissioner may have reached on that subject. Indeed, were a Tribunal member to regard himself or herself as so bound, that would amount to a jurisdictional error. So the very ethos of independence engendered by observation of that more usual jurisdictional requirement can lend a counter-intuitive quality to the review of a private ruling decision. In that may well lie the occasion for the error committed on this occasion. 18 It was put on behalf of the Commissioner that the Tribunal was "properly able to draw inferences from the facts stated in the scheme" and that the email of 6 February 2009 contained indicia that Rosgoe was carrying on the very business that the Tribunal found as a fact. 19 Each of these propositions is at variance with the position on the authorities as summarised by Gilmour J in Cooperative Bulk Handling. The Commissioner not having described an arrangement (or "scheme") which included as a fact that Rosgoe was carrying on a business, it was not open to the Tribunal to investigate documents referred to in the ruling so as to make its own findings of fact on that subject. Whatever finding of fact might be made based on what was stated in the email of 6 February 2009 was, for the purposes of the ruling, made by the Commissioner when he described the arrangement. 20 In describing an arrangement, the Commissioner is entitled to incorporate by reference a description found in a document. That is not a licence for the Tribunal, on review, itself to examine those documents to the end of making a finding of fact which is at variance with or not found in the Commissioner's description of the facts of an arrangement for the purposes of the ruling. Nor can the Tribunal draw inferences of fact which are at variance with or not found in the description the Commissioner has given of the arrangement. 21 There was discussion in the course of submissions about whether regard might be had to the Commissioner's expressed reasons for the ruling. Even if those reasons, as they apparently do here, contain conclusions of fact, that does not ameliorate a deficiency in the statement of facts in the Commissioner's description of the arrangement. Moreover, in giving his ruling, the Commissioner deliberately and quite properly drew a distinction between the description which he gave of the arrangement and reasons which he gave for his ruling as to how the taxation law applied to that arrangement. 22 It was put for the Commissioner that the question as to whether Rosgoe was carrying on a business at the time of the sale of the Property was one which it was essential for the Tribunal to answer when reviewing the correctness of the objection decision. Answering that question was certainly a step along the way to a conclusion of law that the gain made on the sale was ordinary income but that step entailed a finding of fact. Were the objection decision one made in respect of an assessment, the Tribunal would have been perfectly entitled to make such a finding as a precursor to a conclusion as to the application of a taxation law but that is not this case. The Commissioner additionally submitted that it was permissible for the Tribunal to do this, because the issue upon which the Commissioner had been asked to rule and had ruled was whether the proceeds of sale should be brought to account as ordinary income. That does not alter the position that a finding as to whether and when Rosgoe was carrying on a business was one of fact. Upon the findings of fact made turned the application of the taxation law. If the fact was not found, because the Commissioner had omitted to find it in describing the arrangement, it was not within the jurisdiction of the Tribunal to remedy that deficiency. 23 If the Commissioner had considered that there was some deficiency in the statement of the arrangement put to him for the ruling, it was open to him, as s 357-110 reveals, either to have declined to make the ruling requested or to have made an assumption as to a further fact. If he chose the latter course, he was obliged to tell Rosgoe of that proposed assumed fact and to offer it an opportunity to be heard on whether to make that assumption prior to making any ruling based on that assumption. The Commissioner chose to make no such assumption in making this ruling. 24 The Tribunal's alternative basis for concluding that the gain was ordinary income entails a like misconception of the jurisdiction it was exercising. The conclusion that the disposal of the Property was an "isolated transaction that eventuated [that] had a profit-making purpose from the outset" is at variance with the Commissioner's description of the arrangement, particularly the extract which I have repeated and emphasised at para 16, above. The conjunctive in that description entails a finding that there was an abandonment of any such purpose. This is reinforced by the reference in the description of the arrangement to having ceased to hold the Property as trading stock and instead moving it to capital account. 25 On the Commissioner's description of the facts which constituted the arrangement, the present was a case where property was acquired not for sale at a profit but rather for the carrying out of a profit-making scheme which later came to be abandoned. When, later, the property was sold, "the profit here arose not from the purchase but from the sale and because the sale was not part of the profit-making scheme the profit did not arise 'from the carrying on or carrying out' of that scheme. Indeed the profit did not arise until the scheme had been abandoned: Kratzmann v Commissioner of Taxation (1970) 44 ALJR 293 at 294. 26 It follows that the Tribunal ought to have held that the Commissioner's ruling, as confirmed by the objection decision, was in error, at least in respect of the answer given to Question 1. The correct conclusion as to the application of the ITAA 1997 to the arrangement was that the profit was not ordinary income. On the basis of the description in the arrangement, what occurred was the mere realisation of a capital asset, taxable under the capital gains tax regime. The first of the questions posed for the ruling ought to have been answered, "Yes". 27 Because of the error made by the Tribunal as to its jurisdiction, the Tribunal instead answered the first of the questions posed for a ruling in the negative. That meant that, like the Commissioner beforehand, the Tribunal found it unnecessary to answer the second of the questions posed for a ruling. It will now be necessary to remit the matter to the Tribunal for that second question to be addressed and ruled upon. 28 While the constitution of the Tribunal on the remitter is a matter for the President, it necessarily follows that the Tribunal's decision entailed no lawful findings of fact such as might preclude the Tribunal again being constituted by the member who initially conducted the review. 29 Two further matters should be mentioned. 30 The Commissioner was initially disposed to object to the competency of the appeal on the basis that no question of law was entailed so as to engage the jurisdiction conferred upon the Court by s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). Whatever might have been the position in relation to the notice of appeal as originally cast, in its amended form the notice of appeal clearly raised at least one question of law, which was whether the Tribunal was, given the nature of the review it was conducting, jurisdictionally entitled to make the findings of fact which it did. Given that the notice of appeal specified at least one question of law, the appeal was competent, because that invoked the Court's jurisdiction, irrespective of whether the notice otherwise specified questions of law: Belton v General Motors Holden's Ltd (No 1) (1984) 58 ALJR 352; and for a Papua New Guinea illustration of this same point, see Cocoa Cola Amatil (PNG) Ltd v Yanda [2012] PGSC 52; SC1221. I did not understand the Commissioner to be disposed to press his objection in the face of the amended notice of appeal but in any event, for the reasons given, it was without merit. 31 In the course of the Commissioner's submissions as to why the Tribunal's affirming the objection decision was correct, I voiced a concern that, if that were so, s 14ZVA of the TAA might operate so as, impermissibly, to create an incontestable tax. That section provides: Limited objection rights because of objection against private ruling 14ZVA. If there has been a taxation objection against a private ruling, then the right of objection under this Part against an assessment, or against a decision made under an indirect tax law or an excise law, relating to the matter ruled is limited to a right to object on grounds that neither were, nor could have been, grounds for the taxation objection against the ruling. 32 For reasons already given, I have not accepted the Commissioner's submissions. In any event, having had the benefit of considering the additional submissions made on this subject by the parties, that concern has been allayed. The answer, supplied by the Commissioner in his additional submission, is that the effect of s 14ZVA does not limit grounds of objection against an assessment based on facts materially different from those specified in the arrangement in respect of which a ruling has been made. All that it does is to preclude an objection on a ground that was or could have been a ground for an objection against a ruling. The explanation given by Lockhart J in McMahon, at 132, is apposite: … [O]nce the private ruling is made the Commissioner is bound by it, so is the taxpayer, in the sense that, leaving aside the question of appeal or review, the Commissioner when he issues an assessment must do so on the basis that the "arrangement" as identified by the Commissioner in his ruling binds both the taxpayer and the Commissioner. It is important to note, however, that when the actual facts as ascertained by the Commissioner form the basis of an assessment by the Commissioner, it is those facts that will govern the assessment, not the facts as identified in the form of an arrangement by the Commissioner in his private ruling, unless the two correspond. So understood, s 14ZVA does not preclude a taxpayer from resort to the judicial power of the Commonwealth so as to challenge, on the basis of law and fact, an assessed taxation liability. 33 The appeal must be allowed and the matter remitted to the Tribunal for further hearing according to law. The Commissioner must pay Rosgoe's costs. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.