Suntory (Aust) Pty Ltd v Commissioner of Taxation

Suntory (Aust) Pty Ltd v Commissioner of Taxation - [2009] FCAFC 80 - FCAFC 2009 case summary — Zoe

[4]

4 The terms, "Excise Tariff" and "Excise Tariff alteration" are defined in s 4(3) of the Excise Act: A reference in this Act or in any other Act to an Excise Tariff or Excise Tariff alteration proposed in the Parliament shall be read as a reference to an Excise Tariff or Excise Tariff alteration proposed by a motion moved in the House of Representatives, and an Excise Tariff or Excise Tariff alteration proposed by a motion so moved shall be deemed to have been proposed in the Parliament at the time at which the motion was moved. 5 Pursuant to s 160B of the Excise Act, the Commissioner of Taxation may, in certain circumstances, publish a notice of intention to propose an Excise Tariff or an Excise Tariff alteration. Section 160B(2) provides that where such a notice has been published in accordance with the section, "the Excise Tariff or Excise Tariff alteration shall, for the purposes of this Act (other than section 114) and any other Act, be deemed to be an Excise Tariff or an Excise Tariff alteration, as the case may be, proposed in the Parliament". 6 It is s 54 that imposes the liability to pay excise duty on the "licensed manufacturer of excisable goods, or, where the owner of excisable goods enters them for home consumption, the owner". Section 58 deals with the entry of goods for home consumption. It provides in s 58(1A) that entry "shall be made in accordance with an approved form, or in a manner approved by the CEO", that is by the Commissioner. Section 59 provides that excise duty must be paid at the times specified "at the rate in force" at that time, however the obligation is expressly subject to ss 59A and 59AA. 7 Under s 59A the Commissioner has power to take steps to protect the revenue in anticipation of an increase in the duty applicable to goods of a particular kind. The regime is complex and it is not necessary here to describe it in detail. It is sufficient to note that the Commissioner "shall have the right, before the entry is passed, in addition to requiring Excise duty to be paid on the goods at the rate in force at the time of entry of the goods, to require and take, for the protection of the revenue in relation to any additional amount of duty that may become payable on the goods, or the part of the goods … security by way of cash deposit of an amount equal to the amount of duty payable on the goods, or on that part of the goods at the rate in force at the time of entry of the goods"; s 59A (8). 8 As an alternative to entry for home consumption pursuant to s 58, the Commissioner (or authorised officer) may give a person written permission to deliver the goods for home consumption "notwithstanding that an entry of the goods for home consumption has not been made and passed under this Act"; s 61C(1). This permission may be subject to such conditions as, in the opinion of the Commissioner, "are necessary for the protection of the revenue or for the purpose of ensuring compliance with the Excise Acts"; s 61C(3).

[10]

(1) No proceeding whether against any officer or otherwise for anything done (whether before or after the commencement of this section) for the protection of the revenue in relation to any Excise Tariff or Excise Tariff alteration proposed in the Parliament shall, except as mentioned in section 115, be commenced before the close of the session in which the Excise Tariff or Excise Tariff alteration is so proposed or before the expiration of 12 months after the Excise Tariff or Excise Tariff alteration is so proposed, whichever first occurs. (2) No proceeding, whether against an officer or otherwise, for anything done for the protection of the revenue in relation to an Excise Tariff or Excise Tariff alteration that is intended to be proposed in accordance with a notice under s 160B shall, except as provided in s 115, be commenced before: (a) the seventh sitting day of the House of Representatives after the date of publication of the notice, or the day on which the period of 6 months from the date of publication of the notice expires, whichever is the earlier day; or (b) where, on or before the earlier of the days referred to in paragraph (a), an Excise Tariff or Excise Tariff alteration that would validate the thing so done is proposed in the Parliament - the close of the session in which the Excise Tariff or Excise Tariff alteration is so proposed, or the expiration of 12 months after the Excise Tariff or Excise Tariff alteration is so proposed, whichever first happens. 14 The exception in s 115 provides that the Supreme Court of a State or Territory may require an officer against whom any person may decide to commence proceedings referred to in s 114 "to give security to the satisfaction of the court to abide the result of the proceeding". Failure to give such security may result in the Court sanctioning the immediate commencement of the proceedings. 15 The primary judge held that s 114 does not cease to operate when the Senate rejects a Bill that, if passed, would have given retrospective effect to the Excise Tariff alteration that has been proposed. Accordingly, her Honour held that the present proceeding was required to be stayed during the period specified in s 114. The Commissioner contends that her Honour was correct in so holding and submitted that s 114 validly applies to proceedings commenced in the Federal Court under s 39B of the Judiciary Act 1903 (Cth). Accordingly, the Commissioner submitted that the application for leave to appeal should be refused or, if granted, the appeal should be dismissed. 16 Suntory submitted that s 114 does not render the collection of money under a Tariff Proposal lawful nor does it purport to do so. Before discussing Suntory's submissions it may be helpful to take note of the legislative purpose of s 114 as revealed by its language and operation in the light of its context and the long-standing tradition of collecting increased excise duties pending retrospective validation by Parliament.

[31]

See also APLA v Legal Services Commissioner of New South Wales (2005) 224 CLR 322 at 405-6 per Gummow J and Re Wakim; Ex Parte McNally (1999) 198 CLR 511 at 580 per Gummow and Hayne JJ. 35 In our view both s 61C and s 114 are directed to the protection of the revenue. As such they have a "relevant and sufficient connexion" with the taxation power and are "appropriate to effectuate the exercise of [that] power". Section 61C does not impose a tax nor, for reasons given below, does it acquire property within the meaning of s 51(xxxi) of the Constitution. Section 61C(3) explicitly limits the Commissioner's authority to impose conditions to requirements that are "necessary for the protection of the revenue or for the purpose of ensuring compliance with the Excise Acts". The Commissioner's receipt of monies pursuant to Condition 3 of the Permission granted to Suntory is directed to ensuring that the proposed additional excise duty would be secured if retrospective legislation is passed. An indication of the appropriateness of the measure is that should the proposed increase not be "finally adopted" the Commissioner would be obliged under s 160(c) of the Excise Act to refund the amount paid. 36 Section 114 can also be seen to fall within the incidental scope of the taxation power as being for the protection of the revenue. The section is designed to delay the commencement of proceedings in respect of the collection of duty at the increased rate until a reasonable time had elapsed to allow the retrospective legislation to be enacted. The fact that, over time, Parliamentary sessions have tended to extend to the entire term of the Parliament explains the outer limit of 12 months imposed by s 114(1). 37 It was submitted for Suntory that the "evident purpose" of the section is "the protection of officers" (in this case the Commissioner of Taxation; see the definition of "officer" in s 4(1) of the Excise Act). Furthermore it was submitted that the use of the past participle "done" in s 114 means that the section only applies to proceedings in respect of things done in the past and does not apply to presently occurring actions such as the exaction with which we are concerned. We do not accept that submission. A reference to "anything done" may as likely refer to anything that "will be done" (future) or that "is being done" (present continuous) as to that which "has been done" (past perfect). As Mr Gageler submitted the meaning depends on the implicit auxiliary verb. We agree that the most natural meaning, taking into account the purpose of the section and the context of the phrase, is that it means anything that is done during the period to which the section refers. 38 As the Commissioner points out, "the express language and operation of s 114 … gives protection to officers in respect of anything done in the protection of the revenue for a specified period". It does not grant immunity to the officers. This is consistent with the heading of Division 2 of Part IX in which s 114 is to be found. That heading is "Protection to officers" not of officers. The purpose of the section can be clearly understood if one recognises that it forms part of a network of provisions directed to protecting the revenue; see ss 16, 17, 61C and 160. 39 It was submitted for Suntory that the Excise Tariff alteration ceased to exist on the Senate's refusal to pass the Bill imposing the increased excise duty. The primary judge dealt with this submission at [21]-[22] of her reasons. We agree with her Honour's conclusion on this issue for the reasons she gave. It is not necessary to address the issue further.

At a glance

Court

Decision date

Before

Source

Judgment (38 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (17)

Cited By (2)