Singh v Chief Commissioner of State Revenue

Powers of Tribunal on review

1. Section 96(1) of the TA Act relevantly provides: A taxpayer may apply to the Civil and Administrative Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of a decision of the Chief Commissioner that has been the subject of an objection…if…the taxpayer is dissatisfied with the Chief Commissioner's determination of the taxpayer's objection…
2. Section 97 of the TA Act, which empowers the Supreme Court to review a decision of the Chief Commissioner, is in similar terms to s 96. In Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184, Basten JA with whom Giles and Campbell JJA agreed said at [28]: …the right of review under s 97 is given by reference to the operative decision of the Chief Commissioner and not to a ruling made on an objection. Although the existence of an objection is a necessary precondition to the power of review by the Court, and it is the taxpayer's dissatisfaction with the determination of the objection which provides standing to seek review, it is the initial decision which is the subject matter of the review.
3. In Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378, when considering an appeal against a decision of the Appeal Panel of the Administrative Decisions Tribunal (ADT) in relation to a dispute concerning whether the dominant use of rural land was primary production, White J, with whom Barrett JA and Leeming JA agreed, said at [10]: The Chief Commissioner's decision that should have been the subject of the application for review by the Tribunal was the decision the subject of the objection, that is, the decision to make the assessment of land tax, not the decision on the objection …
4. The ADT was replaced by this Tribunal on 1 January 2014. There is no dispute that the operative decision which is subject to review by this Tribunal is the decision which led to the issue of the Assessments rather than the Disallowance Decision.
5. On a review the Tribunal may affirm vary or set aside administratively reviewable decisions, such as the Assessments and make orders as to costs or otherwise, s 101(1) of the TA Act, s 63 Administrative Decisions Review Act 1997 (ADR Act) and s 60 Civil and Administrative Tribunal Act 2013 (CAT Act).
6. In accordance with s 38(2) of the CAT Act the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. The Tribunal is to act according to equity and good conscience and the substantial merits of the case without regard to technicalities and shall take such measures as are reasonably practicable to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings, ss 38(4) and (5).
7. The Tribunal is to decide what the correct and preferable decision is, having regard to the material then before it, including any relevant factual material, and any applicable written or unwritten law, s 63 of the ADR Act.

Onus and standard of proof

1. Having regard to s 100(3) of the TA Act and Cornish Investments I adopt the Respondent's submission at [26] that the Applicant bears the onus of proving his case. The standard of proof required of the Applicant is the "balance of probabilities", B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187.

PSL law

1. The objects of the Act are set out at s 3. They are: …to discourage car use in leviable districts by imposing a levy on parking spaces (including parking spaces in parking stations), and by using the revenue to encourage the use of public transport (in particular, public transport to and from, or within, those districts).
2. The words and phrases "leviable district", "leviable premises", "levy", "owner", "parking space" and "premises" are defined in the Act and are not in dispute.
3. There is no dispute between the parties as to the matters summarised in the Respondent's case at [8] (1) to (5) and (7) above.

Issues

1. The issues to be determined by the Tribunal are: 1. Whether the Respondent is estopped by the 2014 statement referred to at [6] (1) above from issuing the Assessments to the Applicant or requiring payment by the Applicant of the amounts of tax and interest contained in the Assessments. 2. The validity of the Assessments being issued after the date payment was due to be made for each year during the Relevant Period. 3. Whether a tax default has occurred in respect of a payment required to be made pursuant to an Assessment notice which had not been issued. 4. Whether interest is payable by the Applicant in respect of periods before Assessment notices were received by him. 5. Whether the Applicant's inability to recover the PSL from his tenants should limit the Applicant's liability to pay the PSL to the Chief Commissioner. 6. Whether the Assessment notices were required to be issued by the Chief Commissioner to an owner of the Premises other than the Applicant. 7. Whether the Applicant is entitled to any statutory exemption from payment of the levy or the interest as assessed. 8. Whether the Applicant's liability to comply with the Assessments is unfair in all the circumstances. 9. Whether there is any relevant hardship in the professed inability of the Applicant to pay the levy for five years when he submitted that he had not planned on paying for a single year as he had never previously received a PSL assessment.

Is the Respondent estopped by the 2014 statement from his office to the Applicant?

1. There are two matters to be dealt with in relation to this issue. The first matter relates to the 2014 statement and the second matter relates to estoppel.
2. In relation to the first matter the Applicant stated in his reasons for objection "Last year I received a statement from your office that there is no outstanding amount due to me." The Disallowance Decision from the OSR included the following: You have stated that your (sic) received a statement from the Office of State Revenue in 2014 which confirmed that you did not have any outstanding PSL liability. Records show that no such statement was issued to you prior to the assessment notices of 20 January 2015. You have also failed to provide the statement to our office in support of your grounds for objection…
3. No such statement was produced to the Tribunal. In oral evidence the Applicant said he was relying on his memory in relation to the existence of the statement. I find that the Applicant did not appear to have any strong recollection as to the existence or the content of the statement. I am not satisfied that any such statement was received by the Applicant.
4. Having regard to my finding in respect of the alleged statement it is not necessary to deal with any claim of estoppel in relation to this issue.

Validity of the Assessments

1. Sections 5, 8 and 9 of the Act relevantly provide: 5 This Act is to be read together with the Taxation Administration Act 1996. Note. The Taxation Administration Act 1996 makes provision for the administration and enforcement of taxation laws. This Act is a taxation law for the purposes of that Act. 8 (1) A parking space levy is imposed on 1 July each year on all leviable premises. (2) The amount of the levy for any leviable premises is the amount calculated in respect of the premises in accordance with the regulations. (3) A person who, as at 1 July in any year, is the owner of leviable premises is liable for payment of the levy for the premises. (4) If the premises are owned by 2 or more persons, the owners are jointly and severally liable for payment of the levy. (5) The levy is to be paid to the Chief Commissioner. 9 (1) A person who, as at 1 July in any year, is the owner of leviable premises must, on or before 1 September in that year, furnish a return to the Chief Commissioner in relation to the parking spaces situated on those premises at any time during the previous financial year.
2. Sections 7, 8, 11, 15 and 16 of the TA Act relevantly provide: 7 Purpose of Act and relationship with other taxation laws (1) The purpose of this Act is to make general provision with respect to the administration and enforcement of the other taxation laws. (2) The other taxation laws include provisions with respect to: (a) the imposition of tax and its payment, and (b) exceptions to and exemptions from liability to the tax, and (c) …. (3) This Act includes general provisions with respect to: (a) assessment …of tax liability, and (b) …, and (c) imposition of interest …, and (d) …, and (e) collection of tax, and (f) … and (g) … and (h) objections and reviews, and (i) …. 8 General power to make assessment (1) The Chief Commissioner may make an assessment of the tax liability of a taxpayer. 11 Information on which assessment is made (1) The Chief Commissioner may make an assessment on the information that the Chief Commissioner has from any source at the time the assessment is made. 15 Inclusion of interest and penalty tax in notice of assessment A notice of assessment of a taxpayer's tax liability issued following a tax default by the taxpayer must specify any interest and penalty tax payable by the taxpayer under Part 5 or section 95 in respect of the default. 16 Validity of assessment The validity of an assessment is not affected because a provision of a taxation law has not been complied with.
3. The Applicant submitted in his third paragraph: Section 8(1) of TA Act simply states "The Chief Commissioner may make an assessment of the tax liability of a taxpayer". There is no mention of time in this statement. Therefore Chief Commissioner has to issue tax liability (sic), as it is due to be paid by the taxpayer.
4. The Applicant's reference to s 8(1) is accurate and I accept the second sentence in the paragraph. However, the conclusion in the third sentence does not necessarily follow from the earlier provisions of that paragraph.
5. The Respondent's submission is to the effect that no time limit is imposed on the Chief Commissioner as to when an initial assessment of tax liability for a particular year may be made. I agree that there appears to be no express statutory time limit in relation to making an initial assessment in the present circumstances.
6. I observe that ss 9 and 14(2) of the TA Act respectively provide, on a general basis, that any reassessment of a tax liability is to be made within five years after the initial assessment of liability and if the Chief Commissioner has not issued a notice of assessment of a tax liability he must issue the notice if a request to do so is made by the relevant taxpayer within five years after the liability arose.
7. The express statutory time limits in relation to reassessment and issuing a notice of assessment at the request of a taxpayer may be contrasted with the lack of any express statutory time limit in s 8 of the TA Act in relation to the issue of an initial assessment.
8. The Applicant has provided no authority to support his submission that the Chief Commissioner must issue an assessment within a period which relates to the date on which the Applicant was due to pay the amounts assessed.
9. I have regard to s 16 of the TA Act to the effect that the validity of an assessment is not affected because a provision of a taxation law has not been complied with. I also have regard to the imposition of the liability to the levy and the joint and several liability of the owners of relevant premises pursuant to s 8 of the Act rather than pursuant to the issue of the Assessments.
10. The Applicant has not satisfied me on the evidence before me that the Assessments were not validly issued. Nor has the Applicant satisfied me that he, as an owner of the Premises was not liable as at 1 July in each relevant year to pay the levy.

Has a tax default occurred?

1. The Applicant submitted at the fifth paragraph in ASR: "Tax default" has not occurred. "Tax default" could have occurred only if I did not pay the Parking Space Levy that I received before the date of its payment but I received the Parking Space Levy assessment notices for 2011, 2012, 2013 and 2014 years in January 2015
2. I refer to my above finding in respect of the liability for payment of the levy arising pursuant to s 8 of the Act irrespective of the issue of the Assessments. Accordingly, any failure or delay by the Chief Commissioner in issuing the Assessments was not a pre-requisite to the incurring of a liability to pay the statutory levy.
3. Pursuant to ss 8(3) and (4) of the Act the liability for payment is imposed on each person who as at 1 July in a relevant year is an owner of leviable premises. Section 8(7) provides that there is no tax default if the levy is paid by 1 September in the relevant year.
4. The Respondent submits that, by implication and having regard to the construction of s 8(7) of the Act, a tax default, which is defined in s 3 of the TA Act to mean: a failure by a taxpayer to pay, in accordance with a taxation law, the whole or part of tax that the taxpayer is liable to pay occurs if the levy is not paid by 1 September in the year in which liability for payment of the levy arises.
5. The onus lies on the Applicant to show that no tax default has occurred. I am not satisfied on the evidence before me that the Applicant has satisfied that onus. Accordingly, I find that as at 2 September in each year during the Relevant Period a tax default occurred in respect of the failure to pay the relevant levy.

Is interest payable by the Applicant in the relevant circumstances?

1. There is no dispute that the levy was not paid by 1 September in each relevant year.
2. Part 5 of the TA Act imposes interest and penalties in respect of certain tax defaults and empowers the Respondent to remit either or both interest and penalty tax by any amount in such circumstances as the Respondent considers appropriate. No penalty tax was imposed by the Respondent. The Applicant has requested that the Tribunal review the relevant decisions of the Respondent and remit interest in full. In these proceedings the Tribunal may exercise the Respondent's relevant powers.
3. The relevant TA Act provisions in respect of interest are: 21 Interest in respect of tax defaults (1) If a tax default occurs, the taxpayer is liable to pay interest on the amount of tax unpaid calculated on a daily basis from the end of the last day for payment until the day it is paid at the interest rate from time to time applying under this Division. 22 Interest rate (1) The interest rate is the sum of: (a) the market rate component, and (b) the premium component. (2) The "market rate component" is: (a) unless an order is in force under paragraph (b), the Bank Accepted Bill rate rounded to the second decimal place (rounding 0.005 upwards), or (b) the rate specified for the time being by order of the Minister published in the Gazette. 25 Remission of interest The Chief Commissioner may, in such circumstances as the Chief Commissioner considers appropriate, remit the market rate component or the premium component of interest, or both, by any amount.
4. At [37] the Respondent submitted that interest has been imposed at the market rate in the Assessments. While the Applicant disputed his liability to pay any interest he did not dispute the Respondent's submission concerning the calculation of the rate of interest in the Assessments.
5. In Incise Technologies the Appeal Panel of the then ADT considered an appeal by the Chief Commissioner against a decision by the ADT to reduce penalty tax and to relieve the applicant taxpayer from payment of the premium rate component of interest. In the course of its reasons for decision the Appeal Panel said at [60]: In our view the primary interest rate (the market rate component) is intended to compensate the Commissioner (on behalf of the Government of New South Wales) for not having the benefit of the tax payment from the time it was due. So a rate is set which fluctuates, and is connected to an external rate, the Reserve Bank's Accepted Bill rate. This, as we see it, is a component that could rarely, if ever, be waived as otherwise tax would be paid at a devalued amount thereby discriminating against taxpayers who meet their obligations on time. The Tribunal made the observation at [50] that to justify any remission of the market rate component of interest, it would be necessary to show that in some way the Commissioner contributed to the default. We agree with this observation.
6. In Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 215 Sorensen SM referred at [107] to [109] to the above excerpt from Incise Technologies and to the decision of Verick JM in Trust Co of Australia v Chief Commissioner of State Revenue [2002] NSWADT 21 who said at [27]: In cases where an amount of interest is imposed by the application of the market rate, only exceptional circumstances would justify any remission. The narrow category of circumstances would include cases where the 'Tax default' is entirely due to a fault of the Chief Commissioner. Other circumstances would include situations completely out of the control of the taxpayer.
7. Sorensen SM said at [110], in rejecting the submissions by the taxpayer in that matter, that he was not satisfied that the taxpayer had demonstrated any exceptional circumstances to justify remission of the market rate component of interest.
8. The Applicant submitted that interest could not be charged on notices that he did not receive and did not know that he was liable to pay. I refer to my findings above in relation to the imposition of the levy being pursuant to the Act rather than pursuant to the issue of the Assessments and to the occurrence of tax defaults.
9. The Applicant submitted that if there were any relevant tax defaults they were caused because the Chief Commissioner failed to issue the Assessments in a timely manner. The Applicant did not dispute that he fell within the definition of "owner" of the Premises at all relevant times. I observe that, contrary to the statutory requirement in s 9 of the Act, the Applicant as an owner of the Premises did not in respect of any year during the Relevant Period furnish a return to the Chief Commissioner.
10. At [22] in RFS the Respondent submitted: …in circumstances where an "owner" lodged a return by1 September in the relevant year, a Notice of Assessment would be issued to a liable owner. Any Notice of Assessment issued would identify a date by which the levy would become payable. In circumstances though where an owner had failed to comply with s.9 of the PSL Act and no return is lodged, as required by s.9 of the PSL Act (by 1 September of the relevant year), no Notice of Assessment is administratively likely or possible.
11. Although he had the opportunity to do so, the Applicant made no submission in reply to any submission in RFS.
12. The Respondent provided no authority, reasoning or evidence to support the conclusion reached in the last sentence of RFS [22] set out above. I do not accept that merely because no annual return was lodged with the Chief Commissioner it was not administratively possible for the Chief Commissioner to issue a notice of assessment.
13. However, the Applicant has not satisfied me that any delay, if there was a delay, on the part of the Chief Commissioner in issuing the Assessments was not causally connected with the failure by the Applicant to comply with his statutory obligation to furnish an annual return in respect of the Premises for each relevant year.
14. I am not satisfied that any relevant tax default was either entirely out of the control of the Applicant or entirely due to a fault of the Chief Commissioner. Accordingly, I am not satisfied that the Applicant has demonstrated any exceptional circumstances to justify the remission of the whole or any amount of the interest included in the Assessments.

The Applicant's inability to recover the PSL from his tenants

1. The Applicant submitted that if the assessments for each year had been issued during each relevant year he could have collected the appropriate amounts from his tenants. He submitted that accounts had been finalised with his former tenants and it was no longer possible to go back to them as their accounts were settled on the date of their departure at the end of their lease. The applicant provided no details or documentation in relation to the settlement of accounts between himself and his former tenants.
2. Section 45(3) of the TA Act provides: (3) A person who pays an amount of tax in accordance with the liability imposed by this section has such rights of contribution or indemnity from the other person or persons as are just.
3. The Applicant provided no objective evidence to satisfy me that there was any substantive reason why he could not recover from his former tenants any contribution to the levy which they might otherwise have been required to either pay directly to the Chief Commissioner or to the Applicant by way of reimbursement for payments made by him to the Chief Commissioner. However, even if I was satisfied that the Applicant could not recover monies from his former tenants I am not satisfied that this is in any way relevant to the Applicant's statutory joint and several liability for the levy and the payment of interest as assessed.

Was the Chief Commissioner required to issue the Assessment notices to an owner of the Premises other than the Applicant?

1. It is not disputed that the statutory definition of "owner" includes not only the Applicant but also, relevantly, tenants and the owners' corporation under the relevant strata plan. It is also not disputed that the Chief Commissioner could have issued the Assessments against the former tenants. There is no doubt that the liability of each 'owner' for payment of the levy is joint and several pursuant to s 8 of the Act.
2. The Respondent's submissions referred to s 45 of the TA Act which relevantly provides: 45 Joint and several liability (1) If two or more persons are jointly or severally liable to pay an amount under a taxation law, the Chief Commissioner may recover the whole of the amount from them, or any of them, or any one of them. (2) If under a taxation law two or more persons are jointly and severally liable to pay an amount of tax that is payable by any one of them, each person is also jointly and severally liable to pay any related charges, being: (a) any amount payable to the Chief Commissioner under a taxation law in relation to that amount, including any interest and penalty tax under Part 5, and (b)… . (2A)….
3. The Applicant has provided no evidence or authority to satisfy me that the Chief Commissioner could not or should not have issued the Assessments against the Applicant.

Is the Applicant entitled to any statutory exemption from payment of the levy or the interest as assessed?

1. In the last paragraph of ASR, the Applicant submitted that he "must be exempted to pay the Parking Space Levy for 2011, 2012, 2013 and 2014 years due to the reasons mentioned above."
2. The reasons mentioned by the Applicant in ASR were that he could not recover the levy from his previous tenants; the Chief Commissioner had to issue tax liability (sic) the Assessments when they were due to be paid by him; interest could not be charged on notices he had not received; and no tax default had occurred.
3. Clause 7 of the Parking Space Levy Regulation 2009 provides an exemption for certain parking spaces while they are set aside exclusively for one or more of certain specified purposes. There is no disagreement between the parties that none of the purposes referred to in clause 7 applied to the Premises.
4. I have made findings above in respect of each of the reasons referred to by the Applicant in ASR. I also observe that none of the exemption provisions in the Regulation apply to the Premises or the Applicant. Accordingly, the Applicant has not satisfied me that there are any grounds for exempting either the Premises or him in respect of his assessed liability.

Whether the Applicant's liability to comply with the Assessments is unfair in all the circumstances.

1. The Applicant orally submitted that in all the circumstances and for the reasons in ASR it was not fair that he should be liable to pay the levy or interest in accordance with the Assessments.
2. The Respondent submitted at [36] that assertions by the Applicant of subjective fairness of the Assessments are irrelevant and relied on FCT v Ryan (2000) 201 CLR 109 in which Gleeson CJ, Gummow and Hayne JJ, forming a majority of the High Court, said at [19]: … Appeals to general notions of "fairness " or "justice" do no more than attempt to mask the absence of any foundation in the legislation for the conclusion which is asserted.
3. The Respondent also referred at [36] to Brataniec v Chief Commissioner of State Revenue [2013] NSWADT 65 in which Walker JM said at [33], in relation to a submission by the applicants in a dispute concerning land tax, that a delay made by the Chief Commissioner in issuing the assessments was unfair, "general considerations of fairness have no application" and cited Ryan's case.
4. I observe that both of the leases of the Premises contain specific references to "the State Government Parking Levy" and the pages on which those references are made appear to have been signed by the Applicant. The first of the leases contains a statutory declaration made by the Applicant on 8 April 2008. It appears to me that the Applicant was well aware of the existence of the levy from at least April 2008. No explanation has been given to the Tribunal as to any substantive reason for the Applicant's failure to furnish to the Chief Commissioner the appropriate annual return for each year during the Relevant Period.
5. There is no evidence that if annual returns had been furnished to the Chief Commissioner in accordance with the Applicant's statutory obligation the Chief Commissioner would not have issued assessment notices for each year during the Relevant Period in time for payment to be made by 1 September. Accordingly, even if fairness was a relevant matter for consideration by the Tribunal, and it appears that that is not the case, the Applicant has not satisfied me that issuing the Assessments in January 2015 was unfair to the Applicant.

Has any relevant hardship been suffered by the Applicant?

1. Division 5 of Part 10 of the TA Act provides for a Hardship Review Board which may, when appropriately authorised, waive the payment of tax if it is satisfied that the person liable to pay the tax, which includes any interest, "is in such circumstances that the exaction of the full amount of tax would result in serious hardship for the person or the person's dependents". The Board may also direct the Chief Commissioner to extend the time for payment of tax or to write off tax.
2. There is no evidence before me of any "serious hardship" nor is there any evidence that the Applicant has applied to the Hardship Review Board for assistance. If, as the Applicant has submitted, he is unable to pay the assessed levy because of serious hardship it may be that an application could be made to the Hardship Review Board. It is not a matter which is within the jurisdiction of this Tribunal in these proceedings beyond the findings I have already made. Decision
3. Having regard to the above findings on the material before me, it is the correct and preferable decision of the Tribunal that the Assessments are affirmed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 January 2016