REASONS FOR JUDGMENT
1 It is no disrespect to the very thorough arguments of counsel that I propose to give judgment immediately. Indeed, it is partly as a response to those comprehensive submissions that I am able to do so. I am motivated to do so by several things. The first is that I have come to a clear view which, as the docket judge in charge of the cases, it is best that I give effect to and manage the cases accordingly. After all, interesting and important as some of the questions may be, it is a matter of practice and procedure that has been debated. Furthermore, if I reserved my decision in order to put my reasons into fuller and more elegant shape, I really have no idea when I would be able to return to that task because of the pressures on this Registry of the Court at the moment. That would be undesirable.
2 These are motions being heard together in two 'appeals' to the Court pursuant to Pt IVC of the Taxation Administration Act 1953 (Cth) (the Administration Act) - American Express International Inc v Commissioner of Taxation NSD 308 of 2005 (the American Express case) and Syngenta Crop Protection Pty Ltd v Commissioner of Taxation NSD 1039-1044 of 2004 (the Syngenta case). The questions in each case are not identical although the main issues of principle, it seems to me, can be determined and then applied. The present motions before the Court seek the provision by the respondent Commissioner of further particulars and discovery.
3 In each case the Commissioner has provided a Statement of facts, issues and contentions pursuant to the Rules. In the Syngenta case the applicant has also provided such a Statement. In the American Express case the applicant has not. Thus, these are not cases in which the applicant is without a substantial knowledge of the basis for the assessment on the part of the Commissioner. Rather, it is contended that details of that basis are insufficient. The present procedure whereby Statements of facts, issues and contentions are provided in the first instance by the Commissioner should not be overlooked in considering the matters of practice and procedure which arise in these cases. It is not a procedure that has been in force from time immemorial, and it has, it seems to me, somewhat changed the landscape.
4 Be that as it may, there is no question as a general principle but that an applicant should be left in no doubt as to the basis for assessment. It does not necessarily follow that an applicant needs to know the details of the processes by which assessment came to be made, provided that the basis for assessment is clear. The nature of the case to be made by the applicant should also be made clear.
5 The matter which primarily arises on these motions arises under Div 13 of the Income Tax Assessment Act 1936 (Cth) (the Act), these being what might be loosely called transfer pricing cases. I will take the American Express case as the immediate example. A series of determinations were made purporting to be pursuant to s 136AD and s 136AE of the Act. This resulted in a determination that, in respect of supply of certain identified goods, the arm's length consideration should be a particular figure which was more than the actual consideration involved in the transactions. There was also an adjustment to business profits purporting to be made pursuant to Article 7 of the Convention Between the Government of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the Double Tax Convention), the numerical amount of which flows from the numerical result of the adjustment of arm's length consideration.
6 Counsel have taken me to a considerable volume of authority as to the principles which should be applied in relation to the provision of particulars and discovery in cases arising under the Act. The most recent of those cases, heavily relied upon by the Commissioner, is the decision of the Full Court of this Court in Commissioner of Taxation v Sleight (2004) 136 FCR 211, in particular the judgment of Hill J from [103] to [110] which were expressly agreed with by Carr J (at [242]) and by Hely J in a more general agreement (at [247]). After referring to certain authorities, Hill J said (at [107]):
'In other words, it is not open to a taxpayer to challenge an assessment under Pt IVA by showing some error in the making of that determination.'
That statement has been attacked by counsel for the taxpayers as being incorrect, if not per incuriam, and therefore cannot be supported, particularly in light of the reasoning which immediately preceded it and that found in other cases. Counsel for the Commissioner defends it and submits that it is the proper conclusion to be drawn both from the relevant appeal provisions and from s 177 of the Act.
7 I do not propose to track through all the authorities or endeavour to reconcile all of the statements in them on the topic. Such statements are not always easy to reconcile, partly because appeals cover many situations. There are many provisions of the Act involved in appeals which differ in many ways from provisions involved in other appeals. It may also be added that the similarity between the Act, the Sales Tax Administration Act (No 1) 1930 (Cth) and the A New Tax System (Goods and Services Tax) Act 1999 (Cth) also invites argument by analogy from cases arising under those different provisions.
8 In my view, the issues in the cases are best looked at by considering the appeal provisions which relate to the Act together with s 175 and s 177. The appeal provisions are contained in Pt IVC of the Administration Act. The substantive provision is s 14ZZ which is as follows:
'Person may seek review of, or appeal against, Commissioner's decision
If the person is dissatisfied with the Commissioner's objection decision, the person may: