Sydney, 1969, December 10-12, 15; 1970, February 19. 19:2:1970

ORIGINATING SUMMONS removed pursuant to s. 40A of the Judiciary Act 1903-1967 (Cth).

BARWICK C.J. This is an originating summons filed in the Supreme Court of Western Australia and removed into this Court by reason of the provisions of s. 40A of the Judiciary Act 1903-1966. The question of which the summons sought the determination was expressed in the summons as follows:

"1. For a determination of the question whether, on the

proper construction of the Stamp Act, 1921-1969, sections 99A

and 99B thereof in virtue of which the State of Western

Australia in the circumstances described in the affidavit

herein of John Ronaldson Ewing sworn the 21st day of

November 1969, claims that it is entitled to payment of duty

from Chamberlain Industries Pty. Ltd. impose a duty of excise

within the meaning of section 90 of the Constitution of the

Commonwealth of Australia;" (at p10)

2. That question on its face was a question as to the limits inter se of the constitutional powers of the Commonwealth and of the State of Western Australia: Dennis Hotels Pty. Ltd. v. Victoria [1961] UKPCHCA 1; (1961) 104 CLR 621. It was thus a question which the Supreme Court of Western Australia was not competent to take into consideration: see s. 40A of the Judiciary Act and Reg. v. Green; Ex parte Cheung Cheuk To [1965] HCA 32; (1965) 113 CLR 506, at p 518 . (at p10)

3. At the same time that the Court heard the originating summons, the Court heard argument upon a case stated pursuant to s. 18 of the Judiciary Act in an action brought in this Court by the State of Victoria against I.A.C. (Wholesale) Pty. Ltd. for a declaration that the provisions of the Stamps Act 1958 of the State of Victoria, and in particular ss. 53E and 53F thereof, validly apply to the receipt in Victoria by I.A.C. (Wholesale) Pty. Ltd. of sums of money in respect of the sale by it of new goods manufactured in Australia. The questions posed for the opinion of the Court by the case stated was as follows:

"Is the stamp duty which is required to be paid by section

53F of the Stamps Act 1958 of the State of Victoria upon the

receipt by the defendant of the moneys representing payment

of the wholesale price of new motor vehicles referred to in

sub-paragraph (j) of paragraph 5 of the Special Case a duty

of excise within the meaning and for the purposes of section

90 of the Constitution of the Commonwealth of Australia?" (at p11)

4. The relevant provisions of the Stamp Act, 1921-1969 of the State of Western Australia (the Western Australian Act) and those of the Stamps Act 1958 of the State of Victoria (the Victorian Act) are sufficiently identical in substance and the basic facts to which, in each case, the respective Act is sought to be applied are sufficiently similar to enable the answer which the Court gives to the question in the case stated to be decisive of the question which the originating summons seeks to have determined. (at p11)

5. In those circumstances there is no need for me to examine the validity of the procedure adopted by the State of Western Australia. Suffice it to say that, in my opinion, of the two procedures adopted to obtain this Court's decision on the question arising under s. 90 of the Constitution that adopted by the State of Victoria is quite clearly the more convenient. (at p11)

6. Section 99 of the Western Australian Act so far as relevant requires a person who is paid any money under penalty of a fine to give or tender to the payee a duly stamped receipt, provided that if a receipt is not requested it will be a sufficient compliance if a receipt is made out and stamped but in that event the receipt must be kept for at least two years. (at p11)

7. Sections 99A and 99B provide a means whereby persons may be permitted by the Commissioner of Stamps to make a periodic return of all moneys received in the period to which the return relates. Upon this expedient being adopted, the person permitted by the Commissioner to make out a return is not required to create a receipt and to stamp it. Upon the return being made out at specified times, the person making it must pay an amount calculated on the total amount of money returned as received in the period calculated at a stated rate. (at p11)

8. The rate of duty payable on a receipt is specified in the second schedule to the Act. It is one cent for every ten dollars or part of ten dollars of which the receipt acknowledges the payment. But the schedule contains a great number of exemptions which depend upon the nature of the payment which has been received. (at p12)

9. In the case of the periodic returns, the rate is specified as one cent for each ten dollars or part thereof or so much of the total amount of the return as represents the aggregate of the amounts in respect of which a written receipt, if given, would have been liable to duty under the schedule. Thus the exemptions of the schedule are introduced into the calculation of duty payable on the return. (at p12)

10. The comparable provisions of the Victorian Act are ss. 53, 53E and 53F and the third schedule. In the case of this Act, the return of moneys received is not to include "amounts or payments, a receipt for which would have been exempt from stamp duty under the Act"; and the obligation is to pay duty upon the full total of the amounts included in the return. (at p12)

11. The question in each case is whether the Act has validly imposed the specified duty upon amounts of money received as the purchase price or part of the purchase price of the sale of goods manufactured in Australia. (at p12)

12. Both in Western Australia v. Hamersley Iron Pty. Ltd. (No. 1) [1969] HCA 42; (1969) 120 CLR 42 and in Associated Steamships Pty. Ltd. v. Western Australia [1969] HCA 45; (1969) 120 CLR 92 I expressed the view that the duty sought to be imposed by the Western Australian Act upon a receipt or acknowledgment produced under compulsion of the statute or upon a return made in conformity with the statute could not properly be regarded as a stamp or instrument duty. Further reflection has confirmed that view: and indeed in neither of the present cases was any argument advanced in support of the view that the duty under either of the Acts was in those circumstances a stamp or instrument duty, though one party reserved the point. (at p12)

13. But the question remains "is the duty so sought to be imposed a duty of excise within the meaning of s. 90 of the Constitution?" (at p12)

14. The meaning of the expression "duties of excise" as found in the Constitution has received a great deal of consideration during the lifetime of the Court. On the one hand the Court has taken a limited view by confining duties of excise relevantly to duties upon the manufacture or production of goods. The question whether or not to be an excise the goods brought to duty must be of local manufacture may be regarded as still an open one; certainly, I regard it so myself. It does not presently arise and consequently I have no need to enter upon any discussion of it. On the other hand, the Court has not taken the narrow view that to be a duty of excise the tax must be laid directly on the act or process of manufacture or production. In my view, it should be regarded now as acceptable and settled doctrine that the tax will be a duty of excise if it is upon or in respect of goods at any point including the point of manufacture or production, as they pass to consumption. This view, if I may respectfully say so, has been rightly taken, for a tax upon goods at any stage of their distribution will, in general, and sooner or later, according to circumstances, bear on the rate or level at which they are manufactured or produced or if not locally produced, on the extent of their importation. But there is no warrant, in my opinion, to require it to be established in any particular case that the tax in question will in fact so bear on manufacture or production. Its relevant effect will be presumed : it is enough that the impost is upon or in respect of goods before they have actually reached the consumer. But, of course, the demonstration of the effect of the tax upon such manufacture or production may assist an affirmative conclusion to the question whether the tax is a duty of excise. (at p13)

15. Consequently, in Anderson's Pty. Ltd. v. Victoria [1964] HCA 77; (1964) 111 CLR 353 I expressed my concurrence with the view that in Australia a duty of excise is a tax on goods imposed at any point from and including their manufacture or production to the point of their consumption. It will be such a tax if it taxes a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. It is not enough that the effect an Act in its operation produces has the like effect which a duty of excise would in the circumstances produce. The Act must impose or authorize the imposition of a tax which in its nature is a duty of excise. The Court has endorsed the view that "a tax is not a duty of excise unless the criterion of liability is the taking" of such a step as I have described. (at p13)

16. So much has been common ground in the argument of the present matters. The points of departure between the parties are, first, whether or not an Act may in some aspects of its operation impose a duty of excise and in those aspects be invalid whilst in other aspects of its operation it does not and be valid ; and, second, whether the operation of either of the Acts here in question is in any respect to impose a tax upon or in respect of the taking of a step in the movement of goods into consumption. (at p14)

17. It seems to me that the plaintiff's arguments were to a considerable extent based on the assumption that neither Act could be held in any respect invalid or inoperative so far as concerns s. 90 of the Constitution unless the Act as a whole could be characterized as an excise Act. Thus great emphasis was laid on the great spread in the variety of the nature of the receipts which the Act proposed to bring to duty and to the absence as it was said of any evident concern of the Act with the sale of goods as such. But reference to the Court's decision in The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia [1926] HCA 47; (1926) 38 CLR 408 is sufficient to dispose of any such assumption. That case illustrates that the question is whether the tax as it is, and in the circumstances in which it is, imposed by the Act is a duty of excise: it is not a question as to the nature of the Act which imposes the tax. If it were otherwise the purposes of the Constitution would be readily circumvented. In this connexion, though as I interpret the Acts here in question it is not necessary to rely upon the passage to decide the present question, it is worth recalling the well-known passage from the judgment of Isaacs J. in the case to which I referred. He says:

"But, apart from these obvious gaps in the scheme, it is an

undeniable fact that whatever ultimate effect is sought to be

attained, the Act in the course of its devious path does actually

impose on vendors a tax with a personal liability to pay it, and

does also impose on consumers who purchase outside the State a

definite tax for the reason, which as to them and to the vendors in

other States is the sole reason, that they have purchased outside

the State of South Australia. I do not dispute the ingenuity of

the scheme or the intrinsic equity of its economic adjustments.

Addressed to a competent legislature those considerations are

likely to receive a favourable hearing. But, as legal propositions

advanced to a court concerned, not with construction to an end, but

with legislative power, and only incidentally with construction,

they are not decisive. The prohibitions of ss. 90 and 92 of the

Constitution may be transgressed not merely by a direct and avowed

contravention. They are transgressed also by a statute - whatever

its ultimate purpose may be, and however its provisions are

disguised by verbiage or characterization, or by numerous and

varied operations lengthening the connective chain, or by otherwise

paying titular homage to the supreme law of the Constitution - if

it operates in the end by its own force so as to do substantially

the same thing as a direct contravention would do, either in

attaining a forbidden result or in using forbidden means. The

relevant constitutional prohibitions include both means and

results. It is no justification for using forbidden means that

permissible results are sought, nor for securing forbidden results

that lawful means are employed." (1926) 38 CLR, at p 423

The plaintiffs, as I follow them, really say that unless a tax by an Act is in all the circumstances to which the Act is intended to apply a duty of excise, it cannot be a duty of excise in any of those circumstances. Quite apart from authority, that proposition, in my opinion, is evidently fallacious. And as far as authority is concerned, it is denied by the case to which I have referred. (at p15)

18. The remaining question is whether the tax which the Act seeks to impose on the defendant party in respect of money received by it as the price or part of the price of the sale of goods is a duty of excise. The plaintiffs insist that the criterion of the defendants' liability to pay the tax is not the sale of goods nor is it anything in respect of the sale of goods. (at p15)

19. It seems to me that in presenting their submissions on this aspect of the case the plaintiffs were prone to treat the expression "criterion of liability" as it is found in judicial exposition, as if it were a text with statutory force upon which as a foundation what might be thought to be logical consequences could be built. But useful and often definitive as such generalized expressions may be, they must, in my opinion, always be read and understood against the background of the facts and circumstances of the case in which they were propounded and as conditioned and at times limited by the nature of the arguments which prompted their expression. But in this case, in my opinion, the tax which the Act imposes is a duty of excise even if the test offered by the expression "criterion of liability" is applied inflexibly, a course which, in my opinion, is not to be commended. (at p15)

20. First of all, the criterion of the liability to pay the tax will not be found exclusively in the verbal formulae of the statute. In Anderson's Pty. Ltd. v. Victoria [1964] HCA 77; (1964) 111 CLR 353 I indicated a number of factors which needed consideration in that case in determining whether the impost there was a duty of excise. So here, the basis of liability can only be ascertained by considering not only how the Act is expressed but how, through those expressions, it is intended to and does operate. (at p15)

21. Here the Act in terms purports to impose an instrument duty: I have already indicated why I cannot accept the view that it does. The Act intends, subject to specified exemptions, to impose a tax upon all amounts of money received on any account. That tax has been described as a receipts tax. But the Act does not seek to tax the choice of a person to receive rather than to reject a proffered sum of money or, put another way, the acceptance of payment is not the act which attracts the tax. It is not the act of receiving money in that sense which the Act seeks to tax: cf. s. 99D. It is the act of being paid money. That is evident throughout the relevant sections of the Act, e.g., s. 99 (2), and the terms of the exemptions in the schedule which make the reasons for which the payment is made the basis of the exemption. (at p16)

22. The payment of money is never colourless, nor is the receipt of payment. It is a payment for something or of some definable kind, even if a gift. Thus a tax upon all unexempted "receipts" is a tax upon all such payments received. The nature of the payment must be known and set against the exemptions if the statute is to be applied. It is thus abundantly clear to my mind that in seeking to impose the tax upon all unexempted payments of money the Act intends to impose the tax on each kind of payment which falls outside the range of the exemptions. During argument it was said to be irrelevant to the characterization of the tax that "it happened to alight" upon the receipt of the purchase price of the sale of goods. But it does not happen so to alight; it is intended by the Act to fall upon so much of the purchase price of goods as is received from time to time by the vendor. The fact that the receipt of payment of the price or part of it is within the area of the tax is not a consequential effect of the Act; it is within its intended operation. Section 101A of the Act with which I dealt in an earlier case makes that abundantly clear, making special provision, as it does, to ensure that all payments of the price of goods are taxed even though the payment be made out of the State, whether or not in an endeavour to avoid the tax. But one does not need to resort to that circumstance for the conclusion that each and every payment in each and every category of payments is intended to be subjected to the tax if not within an exemption in the schedule, for all unexempted payments of money received are intended to be taxed. The language of the statute is clear enough. (at p16)

23. If a single payment of money is made in the total of sums payable on various accounts, the several component sums must be segregated if the exemptions are to be applied. The exemption cannot be lost because physically the money representing the payment is pooled with other moneys for physical transmission to the payee. Thus, the components are to be regarded as individual payments either intended to be taxed or to be exempted as the case may be. (at p17)

24. I have no doubt that to tax the receipt of the purchase price or any part of the purchase price of the sale of goods is to tax a step in the movement of goods into consumption. It is, as I said in the earlier case, a tax upon the transaction of sale itself and, to my mind, is clearly of the essential nature of a duty of excise. The relationship of the tax to the goods within the intention and operation of the Act is sufficient, in my opinion, to satisfy any of the formulae which have been used in an endeavour to find a definition of an excise duty. (at p17)

25. I have reached my conclusion in this case without any reasoning founded on the purposes behind the constitutional vesting in the Commonwealth of the exclusive power to impose duties of customs or of excise and without discussion of what the substantial effect of the intended operation of the Act must have on the attainment of those purposes. But that is not because those purposes and effects are necessarily irrelevant in the decision of such a question. This, to my mind, is a clear case not requiring the examination of such questions. But the conclusion I have reached is conformable, in my opinion, to those purposes and consistent with the control of the national economy as a unity which knows no State boundaries, by a legislature without direct legislative power over that economy as such. No doubt Sir Owen Dixon felt similarly when he was able in Parton v. Milk Board (Vict.) [1949] HCA 67; (1949) 80 CLR 229 to conclude from the language of the Constitution that a duty of excise was not limited to a tax directly laid upon manufacture or production. His remarks are in point when he said:

"In making the power of the Parliament of the Commonwealth to

impose duties of customs and excise exclusive it may be assumed

that it was intended to give the Parliament a real control of the

taxation of commodities and to ensure that the execution of

whatever policy it adopted should not be hampered or defeated by

State action." (1949) 80 CLR, at p 260 (at p17)

26. In my opinion, the question asked in the stated case should be answered in the affirmative and the question sought to be determined by the originating summons should be answered accordingly, in favour of the defendant. (at p17)

McTIERNAN J. A tax cannot be a duty of excise for the purpose of s. 90 of the Constitution unless, at the least, the tax is charged on goods during manufacture or before sale to consumers. I do not find it necessary to enter into the question what other condition, if any, has to be fulfilled to bring about conflict with s. 90, for I have come to the conclusion that neither ss. 99A and 99B of the Stamp Act of Western Australia, nor the requirements of the Act, for which those sections are a substitute, charge a duty on goods at all. Sections 99A and 99B provide a method of collection of the stamp duty charged, under s. 16, on instruments answering to the definition of "receipt" in s. 96. Sections 99A and 99B do not alter the essence of the tax. It is, therefore, sufficient to deal with the case in which a person is liable under the Act to give a "receipt". Having regard to the words of the Act, in my judgment, the situation is that a stamp duty is charged on the receipt and nothing else and this tax is payable by the person who is liable to give the receipt. The criterion of liability is solely that he has been paid or has received a sum of money. The liability arises in respect of the money, not in respect of the thing or the occasion on account of which the money is paid or received. The situation is not different if the money is received or paid for goods. What the money is received or paid for is not essential to the concept of the receipts tax imposed by this Act. The tax can be described as a general stamp duty on receipts for the payment of money. (at p18)

2. The criterion selected for the tax is the payment of a sum of money, whatever it is paid for. It is not of the essence of the tax that the person who receives the payment manufactured the goods or is engaged in the wholesale or retail trade. The sale need not be a business transaction. It is not essential to liability that the amount received is the full price of the goods. The criterion selected by this Act is the payment of money. In contrast to an Act which imposes a duty of excise, the present Act imposes a general stamp duty on receipts for the payment of money, subject to the exemptions set out in the Act. (at p18)

3. In my view, the sections of the Stamps Act 1958 (Vict.), which were called in question in Anderson's Pty. Ltd. v. Victoria [1964] HCA 77; (1964) 111 CLR 353 , are a near parallel. In that case the criterion of liability was the extension of credit. I said in my judgment in that case:

"I think that it is a misconception of the nature of the duty to

describe it as a tax on the goods in respect of which credit is

given. It has clearly a direct relation to such credit but no such

relation to the goods. I think that it is not the sort of tax the

imposition of which naturally tends to be an ingredient of the

price paid by the purchaser under the agreement. Of course, a

vendor might attempt to recoup himself the tax but this would be

achieved by increasing charges for services rendered to purchasers

generally. That would not amount to a passing on of the burden of

the tax which is an incident of taxes within the scope of s. 90."

(1964) 111 CLR, at pp 369, 370

In the argument in that case, counsel for the plaintiffs sought to distinguish the duty from a stamp duty on receipts for the payment of money. It was said in argument:

"The present tax may be contrasted with a general stamp duty on

receipts for the payment of money. The criterion selected for the

tax is the payment of money, not a step taken in relation to the

passage of goods towards consumption." (1964) 111 CLR, at p

The judgment of the Court did not uphold the validity of the contrast as showing that the sections called in question imposed a duty of excise. The criterion of liability in the case of the tax at issue there, is the extension of credit. The criterion here is the payment of money. Where the payment is for goods, by parity of reasoning, the present tax is not a tax on the goods. The relevancy of a payment to a sale of goods is not intrinsic to the nature of the present tax. Such a transaction does not change the incidence of the tax from the amount of money paid over to the goods sold. Where the amount of the payment subject to duty is money paid for goods - whether it be the whole or part of the money owing - the provisions under "Receipt" in the Second Schedule with respect to rate do not, in my opinion, operate to change the general criterion of liability. (at p19)

4. I would decide the question in the originating summons in favour of the State and make the declaration sought by it. (at p19)

KITTO J. In this case, as it seems to me, the argument we have heard as to the meaning of "duties of excise" in s. 90 of the Constitution presents the Court with a choice between two propositions. One is that if a tax is such that in some but not all of the cases in which it will become payable it will have the practical result of burdening a step in the production, manufacture or distribution of goods it is a duty of excise in relation to those cases, though not a duty of excise in relation to others. The opposed proposition is that a tax is a duty of excise if, and only if, it is imposed specifically - not necessarily literally, but on the true construction of the legislation - upon the taking of a step in the production, manufacture or distribution of goods. (at p19)

2. We are so frequently under the necessity, for the purposes of s. 92, of treating as decisive the operation of a law in a particular instance or class of instances that there is need to keep well in mind an important difference between a question under s. 92 and a question under s. 90. The one is a question concerning a freedom guaranteed by the Constitution to every individual and it therefore depends upon whether the relevant legislation by its direct operation burdens the inter-State trade, commerce or intercourse of an individual or class of individuals. The other is a question as to whether a given tax is of a character referred to in a constitutional provision which denies to the State Parliaments the power to impose duties of that character. To find the answer to that question it is necessary to go to the taxing legislation and to that alone. As the Court said in Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264, at p 273 , "It is upon the legislation itself that attention must be focused". And there is no other way of determining from legislation the character of a tax that it imposes than by ascertaining what criterion of liability the legislation selects. To say this is not to substitute a formula for the words of the Constitution; it is simply to recognize the essential nature of the question that arises when a particular tax is said to possess a character to which the Constitution refers. (at p20)

3. I do not think it has ever been doubted, until recently, that the character of a tax, as being or not being a duty of excise within the meaning of s. 90, is to be ascertained solely by considering whether the taxing legislation picks out goods to be the subject of the imposition. Differences of opinion on subsidiary questions have arisen from time to time, but never since the Court first considered the section in 1904, has a tax been held to be a duty of excise unless the operative provisions of the taxing legislation have tied the tax to goods. More than thirty years ago Dixon J., after considering all the cases up to that time, was able to say in Matthews v. Chicory Marketing Board (Vict.) (1938) [1938] HCA 38; 60 CLR 263, at p 300 : "What is decided is that to be an excise the tax must be imposed in respect of commodities"; and again (1938) 60 CLR, at p 304 : "To be an excise the tax must be levied 'upon goods'". (The emphasis in each instance is mine.) These statements are not ambiguous. It is surely impossible, without misuse of English, to say that a tax is "imposed in respect of commodities", or "levied upon goods", if it is not linked to goods, directly and necessarily, by the nature of the event, act or circumstance which the legislation makes decisive of the liability to pay it. The precisely worded statements I have quoted seem to me to insist, as plainly as language can insist, that the crucial question in deciding whether a tax is a duty of excise is whether in its essential nature the tax is a levy upon goods. That is a question which cannot receive different answers in different cases in relation to the one tax, for it is the character of the tax - as imposed - in the abstract - as an entire exaction - that has to be decided, not the practical effect of concrete applications of it in the differing circumstances of particular classes of persons. "The tax", as Dixon J. said in the case I have mentioned (1938) 60 CLR, at p 304 , "must be of such a nature (my emphasis) as to affect them" (goods) "as the subjects of manufacture or production or as articles of commerce." (at p21)

4. In saying these things Dixon J. was speaking for himself alone but he was not making any new departure and unanimous judgments since have repeatedly endorsed the view he expressed. Six justices said in Browns Transport Pty. Ltd. v. Kropp [1958] HCA 49; (1958) 100 CLR 117, at p 129 that the "essential distinguishing feature" of a duty of excise "is that it is a tax imposed (my emphasis again) 'upon' or 'in respect of' or 'in relation to' goods"; and this I take to be a plain denial that anything is relevant to the nature of a tax as being or not being a duty of excise except the imposition of the tax - not the consequential effect of the imposition in special circumstances, but only the imposition that you find in the legislation. I adhere firmly to the view expressed by the Court in the words I have quoted; and it seems to me an inexorable consequence of their acceptance that, although one Act may no doubt impose several taxes, one tax cannot be a duty of excise sometimes and not a duty of excise at other times; either it is in its nature such a duty or it is not; either the legislation imposes the tax as a burden upon goods or it does not. (at p21)

5. Again, the unanimous statement by six justices in Bolton v. Madsen (1963) 110 CLR, at p 271 that "it is the criterion of liability that determines whether or not a tax is a duty of excise" seems to me a direct denial that a tax may be a duty of excise notwithstanding that the enacted criterion of liability has no necessary connexion with commodities. The words that immediately follow in the judgment in that case underscore the denial: "The tax is a duty of excise only when it is imposed directly (my emphasis) upon goods." I must confess my inability to understand how a tax upon receipts of money simply as receipts of money, regardless of whether or not they have a relation to anything that has happened to goods - a tax imposed by legislation which neither in form nor in substance takes account of anything whatever concerning goods - can properly be described as imposed directly upon, or in respect of, or in relation to goods, even in those cases where the receipt itself has in fact a relation to goods. Where no step in the production, manufacture or distribution of goods is treated by the taxing legislation as at all relevant to the liability imposed there is, in my opinion, no ground for holding the tax to be or to include a duty of excise. In the end it comes to this, that a duty of excise is not found whenever a tax affects a step in the production, manufacture or distribution of goods; it is a special kind of tax affecting such a step distinguished from other kinds by the fact that it is imposed specifically as a tax upon such a step and thus specifically upon goods. (at p22)

6. I adopt, as expressing accurately what I conceive to be the true view on this matter, the following passage in the judgment of Fullagar J. in Dennis Hotels Pty. Ltd. v. Victoria [1960] HCA 10; (1960) 104 CLR 529, at pp 554, 555 :

" . . . what is meant by saying that a tax is a tax upon goods is

that the person by whom the tax is payable is charged by reason of,

and by reference to, some specific relation subsisting between him

and particular goods. A tax will be rightly regarded as a tax upon

goods if the person upon whom it is imposed is charged by reason of

and by reference to the fact that he is the owner, importer,

exporter, manufacturer, producer, processor, seller, purchaser,

hirer or consumer of particular goods. The list may not be

exhaustive. Duties of customs and duties of excise are particular

classes of taxes 'upon goods'. The relation of taxpayer to goods

which characterizes a duty of customs is found in the importation

or exportation of goods. The taxpayer is taxed by reason of, and by

reference to, his importation or exportation of goods. The

relation is implicit in the term itself, which has acquired an

established meaning, so that difficulty is seldom felt as to

whether a particular exaction is or is not a duty of customs. It

has often been observed that the meaning of the term 'duty of

excise' is not so well established, and the crucial question in the

present case, as I see it, is: What is the relation of taxpayer to

goods which characterizes a 'duty of excise' as that term is used

in the Constitution and particularly in s. 90? The answer to this

question given by the Court in Peterswald v. Bartley [1904] HCA 21; (1904) 1

C.L.R. 497. was that the necessary relation is to be found in the

manufacture or production of goods - that what characterizes a duty

of excise is that the taxpayer is taxed by reason of, and by

reference to, his production or manufacture of goods."

In so far as this passage treats a tax by reason of and by reference to the distribution of goods as not included in the concept of a duty of excise, it expresses a view that has not prevailed; but I cite it for its forceful statement of what has always in the past been the view of the Court on the point that is crucial in the present case, namely that there cannot be a duty of excise which the legislation does not impose by reason of and by reference to a relation between the taxpayer and goods. (at p23)

7. This was the essential point in Browns Transport Pty. Ltd. v. Kropp [1958] HCA 49; (1958) 100 CLR 117 , where the Court, in denying that the tax there in question was a duty of excise, used words which apply precisely in the present case and in my opinion ought to be decisive of it:

"Here the exaction is imposed without mention of, and without

regard to, any commodity or class of commodities. The person taxed

is not taxed by reference to, or by reason of, any relation between

himself and any commodity as producer, manufacturer, processor,

seller or purchaser." (1958) 100 CLR, at p 129 (at p23)

8. I do not find it possible, without discarding the very essence of the unanimous judgments in Browns Transport Pty. Ltd. v. Kropp [1958] HCA 49; (1958) 100 CLR 117 and Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264 , to agree that a duty of excise is here imposed. Even where a sum received is the price of goods sold, the receipt is not taxed because it is the receipt of a price; the tax is not made payable by reason of and by reference to the fact that the recipient is the seller of goods. (at p23)

9. I do not find in the case of The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia [1926] HCA 47; (1926) 38 CLR 408 , or, in particular, in the judgment of Isaacs J. in that case (1926) 38 CLR, at p 423 , anything that tells against the conclusion I have stated. All that that case seems to me to show is that, if a State Act imposes several taxes, you are not concerned, under s. 90, with the nature of the Act as a whole, nor are you to be blinded by the verbiage of the Act or the names it chooses to give to the taxes it levies; you are to find whether it really imposes a tax upon goods, whatever be the means that it employs; and if, among the taxes for which it provides, there is what in truth is a tax that answers the proper description of a duty of excise, you are to hold the attempt to impose that duty invalid. I suppose no one would disagree. (at p23)

10. In my opinion the sections of the Stamp Act in question in the present case are valid, and I would make a declaration accordingly. (at p23)

MENZIES J. This is an originating summons instituted in the Supreme Court of Western Australia and removed to this Court by virtue of s. 40A of the Judiciary Act to have it determined whether the duty imposed by ss. 99A and 99B of the Stamp Act, 1921-1969 (W.A.), upon Chamberlain Industries Pty. Ltd. in respect of amounts received upon the sales of tractors and machinery manufactured by it in Western Australia is a duty of excise. The duty is not imposed directly upon the sales. The Stamp Act makes the giving of receipts for all payments received compulsory and, with immaterial exemptions, requires the stamping of receipts with stamps to the value of one cent for every ten dollars, or part thereof, of the sum received. Duty is payable notwithstanding the failure to give and stamp a receipt. An election is given to certain descriptions of persons to submit periodical statements of amounts received and to pay duty thereon in lieu of paying duty by stamping individual receipts. Failure to submit statements exposes a taxpayer, who has so elected, to double duty as well as a penalty. (at p24)

2. Chamberlain Industries Pty. Ltd. is a company entitled to elect to be taxed in the latter manner and has in fact done so. It duly forwarded to the Commissioner of Stamps a statement covering receipts for the month of October, revealing as the total received the sum of $422,980.04, but, relying upon the decision of this Court in Western Australia v. Hamersley Iron Pty. Ltd. (No. 1) (1), it has declined to pay the duty which the Stamp Act purports to impose, viz. $422.98, on the ground that the duty is one of excise and beyond the power of the Parliament of the State of Western Australia to impose. (at p24)

3. I do not think any distinction is to be drawn between duty imposed upon a particular receipt and duty imposed upon a statement of receipts and propose, therefore, to consider the question whether a duty, imposed inter alia upon a receipt given by a manufacturer for so much of the price of goods manufactured in Australia as is from time to time paid, is, to that extent, a duty of excise. (at p24)

4. I think the question just stated is an entirely different question from that upon which the members of this Court differed in Western Australia v. Hamersley Iron Pty. Ltd. (No. 1) [1969] HCA 42; (1969) 120 CLR 42 and I do not, therefore, regard any decision in that case as applicable to this. There the tax was imposed upon the making of a document and, if there were no document, there was no tax. Here the tax falls upon the receipt of money and the giving of a receipt or returning a statement is but machinery for tax collection. The earlier case dealt only with the special provisions of the Act relating to the taxing of persons in respect of documents to be given in respect of moneys paid outside Western Australia and it was not necessary, in considering those provisions, to consider the sections which are now challenged or the problem to which they give rise. It was, however, submitted that my own earlier decision was wrong, particularly in that it was inconsistent with the decision of the Court in AttorneyGeneral (N.S.W.) v. Homebush Flour Mills Ltd. [1937] HCA 3; (1937) 56 CLR 390 . In deference to this argument I have examined the matter again and adhere to what I said earlier. In the Homebush Case, if the exaction was a tax, it was clearly a duty of excise; everything that was said in that case was directed to the question whether the State of New South Wales had imposed a tax. There is no doubt that the duties imposed by the Stamp Act now in question are taxes and the only question is whether they are taxes of a particular description, namely duties of excise. That is the question which I decided in the negative in the earlier case, for reasons to which I adhere, and I find nothing in the Homebush Case [1937] HCA 3; (1937) 56 CLR 390 inconsistent with either my decision or my reasons for it. (at p25)

5. The different question now at issue is a short one and can be dealt with shortly. It is, I think, no longer open to question that the tax upon the sale of new goods manufactured in Australia and sold in retail sale, or at any point anterior thereto, is a tax upon, or in relation to, the goods sold, and is therefore a duty of excise: Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264 . The only question here is whether a tax imposed upon what is, in fact, a vendor's receipt of the price of such goods, or any part thereof, or of a payment to the extent to which it covers such price or part thereof, is a tax imposed upon the sale of the goods. I think it is. To tax what is the price paid or so much of the sale price as is from time to time paid, is to tax the sale. If Chamberlain Industries Pty. Ltd. were to sell its goods, receive the price and include that receipt in its monthly statement, it would be liable to pay one cent for every ten dollars, or part of ten dollars, of the amount received. If it were to omit that receipt from its statement, it would be subject to tax at the rate of two cents for each ten dollars or part of ten dollars making up the amount of the receipt. It is true, of course, that not every sale is taxed. The tax depends upon the receiving of money. All sales are, however, made to obtain the price, and when the price, or part of it, is paid, I think it would be too much of a refinement to treat part of the transaction, i.e., the receipt of the price or part thereof, as something separate from the sale itself. The tax falls, therefore, upon part of the transaction of sale and, as such, in conformity with established authority, relates to the goods sold. (at p25)

6. It is true that many receipts taxed by the sections in question are not receipts of the price of new goods manufactured in Australia. It follows that the sections are not wholly ultra vires. The Parliament of a State cannot, however, escape from s. 90 of the Constitution by throwing its net widely. A State tax of five per cent of the sale price of all sales made within the State would be good in relation to some sales and bad in relation to others. The same is true here. It is only to the extent to which receipts of the price of new goods manufactured in Australia are taxed, that I consider that the sections in question are invalid. It is to this operation of the Act that the questions are directed. (at p26)

7. The first question should therefore be answered "Yes" and the claim for a declaration refused. (at p26)

WINDEYER J. This case was heard with the case of Victoria v. I.A.C. (Wholesale) Pty. Ltd. Both depend simply on the true interpretation and correct application of s. 90 of the Constitution. The question for us is not an issue of central power against some abstract doctrine of federalism. The Commonwealth Parliament has a power to impose duties of excise. The State Parliaments have not. That is all. (at p26)

2. Section 90 is one of a group of provisions designed to promote the economic unity, in a general sense, of Australia. It appears in Ch. IV of the Constitution, headed "Finance and Trade". This chapter, as amended by the addition in 1929 of s. 105A, contains provisions dealing with the financial relationship between the Commonwealth and the States. The practical consequences of those relationships must be worked out between the Commonwealth and the States subject to the provisions of the Constitution, including s. 90. This Court has only to decide whether or not the taxes in question, so far as they impose a duty upon the receipt of moneys paid to manufacturers for goods supplied or paid to traders who sell those goods, are duties of excise. (at p26)

3. Section 90 ought not to be seen as a limitation upon the powers of the States. Rather it is a pronouncement of an inherent power of the Commonwealth. The Commonwealth Constitution is not merely an instrument for the government of a federation. It is that; but it is more. It is the birth certificate of a nation. It embodied in legal form the sentiments of a people behind the idea of "a nation for a continent and a continent for a nation". On the enactment of the Constitution by the Imperial Parliament the Australian colonies became a Dominion under the Crown, Australia, now in its own right a nation among the nations. Australians became one people. These I think are things to be remembered, because in interpreting the Constitution we are not required to ignore the purpose manifestly behind particular provisions. The Constitution is obviously designed to ensure the powers and position of the States as political elements of a federation. It is equally designed to ensure the power and position, and to promote the unity, of the new nation called into being. (at p27)

4. In many countries national unity has flourished with the removal of trade barriers enabling a free flow of trade and commerce across internal boundaries. This made it desirable that legislative competence over inter-State commerce should, by the Constitution, be given to the Commonwealth, hence s. 51 (i.); and that legislative competence in ways which would make for commercial disunity should be denied to the States, hence s. 90; and that freedom of movement of trade and commerce across State boundaries should be guaranteed by law, hence s. 92. The place of the central regulation of commerce as an attribute of a nation had been noticed by John Marshall C.J., when, in the course of his eloquent judgment in Cohens v. Virginia [1821] USSC 18; (1821) 6 Wheat 264, at pp 413-414(5 Law Ed 257, at p 293) , he said:

"That the United States form, for many, and for most important

purposes, a single nation, has not yet been denied. In war, we are

one people. In making peace, we are one people. In all commercial

regulations, we are one and the same people. In many other

respects, the American people are one; and the government which is

alone capable of controlling and managing their interests in all

these respects, is the government of the Union. It is their

government, and in that character, they have no other. America has

chosen to be, in many respects, and to many purposes, a nation; and

for all these purposes, her government is complete; to all these

objects, it is competent."

The same can be said of Australia, although here s. 51 (i.) of the Constitution had been regarded as having a lesser ambit than has been given to the commerce clause in the United States. On that I venture to refer to what I wrote in Deacon v. Mitchell [1965] HCA 28; (1965) 112 CLR 353, at p 371 . (at p27)

5. I realize that the question of whether an impost is a duty of excise is one on which different minds come to different conclusions. I do not want to discuss at length what, as I understand the matter, is an excise for the purpose of Australian constitutional law. I have expressed my opinion of that in other cases, and I would be only going over old ground to do so again here. I therefore make only a few observations in general terms. (at p27)

6. First, I assume that a sales tax, levied upon a sale of goods up to the last sale before consumption, is a duty of excise within the meaning of s. 90. I do not find any difficulty in accepting that proposition; and in any event I would regard it as the established doctrine of this Court to which I should adhere. I do not think that the decision of the Privy Council in Governor-General in Council v. Province of Madras (1945) LR 72 Ind App 91 compels any other view. The differences between the law there in question and our Constitution make that case only remotely relevant; but there are incidental remarks in the judgment of their Lordships which, I think, support the view accepted in Australia that a sales tax is aptly called a duty of excise. (at p28)

7. Secondly, not every charge or impost which adds to the cost of goods to the consumer or diminishes the profit of a seller is an excise. An illustration is the charge which a State may make for a licence to a carrier to carry passengers and goods of all kinds in a vehicle. The unanimous decision of the Court in Browns Transport Pty. Ltd. v. Kropp [1958] HCA 49; (1958) 100 CLR 117 established that that is not a duty of excise. That case is directly relevant too for present purposes, because of a passage (1958) 100 CLR, at pp 129, 130 which is quoted in the judgment, again unanimous, of the Court in Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264 . The passage, an indication in negative terms of the nature of a duty of excise, is as follows:

"The person taxed is not taxed by reference to, or by reason of,

any relation between himself and any commodity as producer,

manufacturer, processor, seller or purchaser. The taxes which s. 35

(2) authorizes, calculated on one or more of a variety of bases,

are payable whether the person taxed carries goods or passengers,

and, if he carries goods, whatever may be the nature of the goods

carried. The exaction is in truth, as it purports to be, simply a

fee payable as a condition of a right to carry on a business."

(1963) 110 CLR, at p 272

Two things are noticeable there. The Court looked to see what the exaction was "in truth". That is a reminder of what Starke J. said in the Chicory Case (Matthews v. Chicory Marketing Board (Vict.)) (1938) 60 CLR, at p 285 and Knox C.J. said in the Petrol Case (The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia) (1926) 38 CLR, at p 421 . The second thing which emerges from the passage quoted is the implication that an exaction upon a person who is taxed by reference to, or by reason of, a relation between himself and a commodity as seller thereof can be an excise, especially if it be calculated by reference to the price which as seller he receives. (at p29)

8. I am unable to accept the view that a tax upon receipts of money for goods sold is not an excise because all receipts of money taxed by the same Act are not excises. That view seems to me to be contradicted in effect by the Petrol Case [1926] HCA 47; (1926) 38 CLR 408 . A tax that is an excise does not, I think, cease to be an excise because the Act imposing it also imposes taxes that, considered alone, are not excises. I appreciate the force of the view that to be an excise a duty must be expressly related to, or imposed expressly in respect of, transactions in goods. Nevertheless, it seems to me that an impost which relates, sufficiently directly, to such transactions among other matters is an excise, notwithstanding that it is expressed, as here, in general terms covering a wide range of moneys received. (at p29)

9. The ordinary method of a taxing Act cast in general terms is to grant specific exemptions for transactions not intended to be caught. That was not done in this case, and counsel for the State of Western Australia urged that the Act in question was intended to operate fully according to its tenor. However, it is to be read subject to s. 2A, introduced in 1968. Similar considerations apply to the Victorian Act in question in the other case. It is to be read subject to s. 3 of the Acts Interpretation Act 1958 (Vict.). I think therefore that neither Act is totally invalid but that each should be read so as not to extend to receipts of money paid for the sale and delivery of goods. (at p29)

10. I agree in the order that the Chief Justice proposes. (at p29)

OWEN J. These proceedings were commenced by originating summons in the Supreme Court of Western Australia and were removed into this Court under s. 40A of the Judiciary Act. The defendant company manufactures and sells in Western Australia agricultural and industrial tractors and machinery and the question that arises is whether on the true construction of the Stamp Act of Western Australia the defendant is liable, under ss. 99A and 99B, to pay duty upon receipts of moneys paid to it by purchasers of goods manufactured by it or whether, as the defendant contends, to impose a duty upon such receipts would be to impose a duty of excise in which case s. 2A of the Act would operate. The relevant provisions of the Act were set out in some detail in the judgments in Western Australia v. Hamersley Iron Pty. Ltd. (No. 1) [1969] HCA 42; (1969) 120 CLR 42 and later in Associated Steamships Pty. Ltd. v. Western Australia [1969] HCA 45; (1969) 120 CLR 92 and I think it unnecessary to repeat them. The first of those cases was concerned with s. 101A of the Act which dealt with the receipt outside Western Australia of payments for goods supplied or services rendered in that State and when read with other provisions of the Act imposed a tax upon such receipts. The second case raised questions under s. 92 of the Constitution. In the Hamersley Iron Case [1969] HCA 42; (1969) 120 CLR 42 the Chief Justice, Windeyer J. and I were of opinion that such a tax, imposed upon moneys received by the producer and seller of goods in payment of their price, the amount of the tax being measured by the amount received, was in substance a sales tax and as such a duty of excise. The three other members of the Court, McTiernan, Kitto and Menzies JJ., were of the contrary opinion. (at p30)

2. I do not think that there was a difference of opinion amongst the members of the Court as to the nature of an excise duty as developed by the decisions of this Court. The real difference was, it seems to me, on the question whether there was a sufficiently close connexion between the duty imposed and a sale of the goods in the course of their passage from producer to consumer to justify the conclusion that the duty was a duty of excise. (at p30)

3. In the present case the sections with which we are concerned are framed in general terms which do not expressly refer to receipts of payments for goods supplied but it is plain enough that receipts of payments for goods sold, other than those to which s. 101A refers, are intended to be covered. Since the Court was equally divided in the Hamersley Iron Case [1969] HCA 42; (1969) 120 CLR 42 and is now somewhat differently constituted, it was naturally submitted that we should reconsider that decision but, notwithstanding the arguments which have been put on behalf of the States in the present case, I remain of opinion that a tax imposed upon the receipt of moneys which are paid in discharge of an obligation to pay for goods sold is a tax upon the sale of those goods, in other words, it is a sales tax. As I have said earlier, s.101A made express reference to receipts of money paid for the supply of goods and this, I then thought, was a significant feature. But on further consideration of the matter I do not think the position is any different if the taxing provisions are couched in general terms wide enough to cover receipts of money in payment of the price of goods supplied as well as receipts of money arising out of many other kinds of transactions having nothing to do with the sale of goods. It was argued that it is not permissible to read these general provisions "distributively", as counsel put it, and that a tax "cannot be a duty of excise in one set of circumstances and not in another set of circumstances". I cannot agree with this proposition. To take a simple case, let it be supposed, as was put by my brother Walsh in the course of the argument, that a statute imposed an ad valorem tax upon the receipt of moneys paid as the purchase price of sales of property. I have no doubt that it would be open to the Court to say that in so far as the property consisted of goods sold in the course of their distribution from producer to consumer the tax was a duty of excise but that it was not such a duty in so far as it imposed a tax upon the price received upon the sale of land. (at p31)

4. In further support of the submission that the duty cannot be said to be a duty of excise it was pointed out that a buyer of goods may fail to pay for them or may pay for them by instalments with the result that in the one case no duty would be payable and in the other that the total amount payable might differ from that which would have been payable had the whole price been paid in one sum. Attention was also drawn to the fact that in the passage of goods from producer to consumer there might and no doubt often would be a series of sales and therefore a series of receipts of purchase money and that, in such cases, duty would be payable upon each receipt. But these matters do not, in my opinion, provide an answer to the defendant's contention that in cases such as the present the tax is in substance a sales tax and therefore a duty of excise. (at p31)

5. I would answer the questions asked in the originating summons in favour of the defendant. (at p31)

WALSH J. By an originating summons filed in the Supreme Court of Western Australia the plaintiff sought the determination of a question framed in the following terms:

"1. For a determination of the question whether, on the

proper construction of the Stamp Act, 1921-1969, sections 99A

and 99B thereof in virtue of which the State of Western

Australia in the circumstances described in the affidavit

herein of John Ronaldson Ewing sworn the 21st day of

November 1969, claims that it is entitled to payment of duty

from Chamberlain Industries Pty. Ltd. impose a duty of

excise within the meaning of section 90 of the Constitution of

the Commonwealth of Australia."

The originating summons was removed into this Court in accordance with s. 40A of the Judiciary Act. The affidavit mentioned in the summons stated that the defendant has, at all material times, carried on the business of manufacture, sales and servicing of tractors and agricultural and industrial instruments, together with associated marketing facilities. It had notified the Commissioner of Stamps of its election, pursuant to s. 99A of the Stamp Act, to pay duty thereunder and had not cancelled that notification. It had forwarded a statement, pursuant to s. 99B of the Act, covering the month of October 1969. According to a letter annexed to the affidavit, the defendant manufactures and sells agricultural and industrial tractors and machinery. It engages also in other activities including the selling of second-hand tractors and the servicing and repair of tractors and machinery. (at p32)

2. The form in which the issues between the parties have been placed before the Court presents some difficulties. The facts of the case have not been fully or clearly set out. The issue between the parties has not been clearly defined. The statement submitted to the Commissioner included in the total amount shown to have been received by the defendant, amounts which were received in respect of sales of second-hand goods and in respect of work and labour and it did not differentiate between those amounts and other amounts which were received as the price or as part of the price of goods which it had manufactured in Western Australia and had sold. It appears also that some amounts received were to be applied partly in discharge of an obligation to pay the price of goods and partly for the payment of third party insurance and licensing charges. The defendant did not formulate, in any written form, its contentions as to the extent of its liability to pay duty in accordance with the Act, in respect of the period covered by the statement. But in the course of the argument of the case the manner in which the question set out in the originating summons is to be understood has been sufficiently clarified to enable an answer to be given to it. It is to be taken as common ground that for the month to which the statement refers some of the money which the defendant received and which it included in the total amount shown in the statement was received from purchasers of goods manufactured by the defendant as payment of the price or of part of the price for which it had sold them. The defendant claims that its obligation to pay duty cannot exceed an obligation to pay the amount which would be payable in accordance with the Act had the statement not included any sums which were, in fact, received as the price or part of the price of goods manufactured and sold by it. This claim is based on the contention that, in so far as the Act purports to impose upon the defendant any greater liability than that which has just been described, it is invalid because of the provisions of s. 90 of the Constitution. The plaintiff contends that ss. 99A and 99B (read, of course, with other relevant provisions of the Act) do not, in any circumstances, impose duties of excise and are not in any way invalidated or restricted in their operation by s. 90 of the Constitution. The Court has not been asked to concern itself with the details of the defendant's trading operations or of the various different transactions which led to the receipt by the defendant of the money included in the statement. The case may be considered as raising the question whether in any respect ss. 99A and 99B are invalid in their operation on any of the receipts of money to which the statement refers and as being limited to that question. (at p33)

3. In the recent case of Western Australia v. Hamersley Iron Pty. Ltd. (No. 1) [1969] HCA 42; (1969) 120 CLR 42 , the Court was concerned with s. 101A of the Stamp Act. In this case it is not concerned with that section except in so far as its inclusion in the Act may throw light upon the provisions which are relevant to the present case. (at p33)

4. I need not set out the details of those provisions. A sufficient statement of them has been made in the case just cited and in Associated Steamships Pty. Ltd. v. Western Australia [1969] HCA 45; (1969) 120 CLR 92 . It is desirable, however, to refer to some features of the legislation which appear to me to be of importance in this case. Section 16 charges stamp duties upon instruments specified in the Second Schedule. This is subject to exemptions contained in the Act. One of the classes of instrument listed in the Schedule is "Receipt". A differentiation as to the duty which is chargeable is made by reference to the person by whom a receipt is given. There is a list containing descriptions of different classes of persons by whom a receipt is given. If a receipt is given by any person within those descriptions it attracts duty of one cent if it amounts to ten dollars or less and if it amounts to more than ten dollars it attracts duty of one cent for every ten dollars and fractional part of ten dollars. If a receipt is given by any person not being a person in one of the described classes there is duty upon a receipt amounting to ten dollars or more of one cent for every ten dollars and every fractional part of ten dollars. The effect is that if a person to whom this latter provision applies gives a receipt amounting to less than ten dollars no duty is charged. (at p33)

5. In the same part of the Schedule there is a list of exemptions. In some instances the exemption depends upon the receipt being given by or to a person of a specified description: see pars. (18), (20a) and (20d). In many instances the exemption depends upon the character of the payment in respect of which the receipt is given. In some instances it depends both upon the character of the payment and the description of the recipient. (at p34)

6. If an election be made under s. 99A the exemption provision would have to be taken into account in calculating the duty payable in accordance with s. 99B (1) (b), although it appears from s. 99B (1) (a) that the statement forwarded thereunder must include every amount received whether or not a receipt if given would have been exempt from duty. Section 99 compels a person receiving payment of an amount in any case where a receipt would be liable to duty to bring into existence a receipt and to stamp it. If a person wishes to avoid that compulsory requirement an election may be made in accordance with s. 99A, in some cases as of right and in some cases with the permission of the Commissioner to do so. Then there is a statutory obligation to forward a statement in accordance with s. 99B (1) (a). If this be done what is described as "duty on that statement" becomes payable. If it be not done, the person who has so elected commits an offence and becomes liable to pay double the amount of the duty which would have been payable if the statement had been furnished. Having regard to these provisions, I am of opinion that the duty with which this case is concerned cannot be regarded simply as a stamp duty on instruments. It must be regarded as a duty imposed (subject to certain exemptions) on the act of receiving money. Subject to the exemptions and subject to the exception in some cases of the receipt of amounts of less than ten dollars, there is imposed by the Act upon every person who receives money an obligation to pay duty the amount of which bears a relationship to the amount of money received. It is proper to conclude that what is taxed is not the making of a document but is the receiving of money. (at p34)

7. The circumstances that it is the receiving of money which imposes liability and that its imposition is not expressed to depend upon any antecedent or contemporaneous fact to which the receiving of the money is related have been stressed on behalf of the plaintiff and have been said to show clearly that the duty is not an excise duty. It has been submitted that when you find in a particular case that the reason why money is received is the fact that goods have been sold and the price or part of the price is being paid, this is a fact which is irrelevant to the imposition of the duty. The character of the duty is not to be determined by facts which are present in particular cases in which it becomes payable but which are extraneous to the liability to pay it. This contention raises the central question to be decided in this case. (at p34)

8. In Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264 this Court had to consider whether certain fees which a State Act required to be paid by an owner of a vehicle to obtain a permit for the carrying on it of goods owned by him were excise duties. The joint judgment of the Court laid down principles to be applied in the resolution of that question. The Court was, of course, concerned to decide the particular case which was before it, but in doing so it made a considered formulation of the test to be applied in determining whether or not a tax is a duty of excise. No dissent from the principles then adopted by the Court was expressed in any of the judgments in the Hamersley Case [1969] HCA 42; (1969) 120 CLR 42 and no argument was directed in the present case to a criticism of those principles. Unless the question whether a duty is a duty of excise is to be left to be decided in each case in which that question arises without the assistance of any definite test by which the duty is to be characterized, the tests which were formulated in Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264 should be accepted and applied. I do not mean that the answer to every such case will be obtained easily and at once by a mere mechanical application to the tax under consideration of a formula derived from Bolton v. Madsen. Difficulties in finding an answer and differences of opinion as to what the answer should be will continue to occur. But I think that it is important to seek to give answers in particular cases which will be consistent with what was laid down in Bolton v. Madsen and will not exhibit a departure from what was in that case and in others regarded as being essential to the meaning of a duty of excise in s. 90. Unless this Court sees fit in the future to reconsider the statements of principles in Bolton v. Madsen, its decision in this case whether the duty has or has not the character of an excise duty should be based upon the test there accepted as the test by which the character of the duty is to be ascertained. (at p35)

"It is now established that for constitutional purposes

duties of excise are taxes directly related to goods imposed

at some step in their production or distribution before they

reach the hands of consumers."

"It is not enough that Turner, the owner-carrier, could by

a simple calculation determine the cost to him per bale of

carrying his wool from his station to the wool store for sale.

It is not enough because it is the criterion of liability that

determines whether or not a tax is a duty of excise. The

tax is a duty of excise only when it is imposed directly upon

goods or, to put the same thing in another way, when it

directly affects goods, and to establish no more than that

its imposition has increased the cost of putting goods upon

the market by a calculable amount falls short of establishing

the directness of relation between the tax and the goods

that is the essential characteristic of a duty of excise." (at p36)

10. Their Honours (1963) 110 CLR, at p 273 adopted the formulation made by Kitto J. in Dennis Hotels Pty. Ltd. v. Victoria [1960] HCA 10; (1960) 104 CLR 529 . That formulation was that (1960) 104 CLR, at p 559 :

". . . a tax is not a duty of excise unless the criterion of

liability is the taking of a step in a process of bringing goods

into existence or to a consumable state, or passing them down

the line which reaches from the earliest stage in production

to the point of receipt by the consumer." (at p36)

11. In Anderson's Pty. Ltd. v. Victoria [1964] HCA 77; (1964) 111 CLR 353 , the judgment of Kitto J. contained an explanation and elaboration of what he understood to have been laid down in Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264 . Taylor J. (1964) 111 CLR, at p 376 expressed his agreement with the reasons of Kitto J. and Windeyer J. said (1964) 111 CLR, at p 379 that he agreed in the explanation given by Kitto J. of the concept embodied in the expression "tax upon goods". Kitto J. said (1964) 111 CLR, at pp 373, 374 :

"It is now established, as the Court said in Bolton v. Madsen

[1963] HCA 16; (1963) 110 CLR 264 , that for constitutional purposes duties

of excise are taxes directly related to goods (i.e. goods

originating in Australia), imposed at some step in their production

or distribution before they reach the hands of consumers. This does

not exclude a tax imposed, as is the duty now in question, upon the

final step in distribution, by which goods reach the hands of

consumers. The crucial question in the case of such a tax is

whether it is 'directly related to goods', in the sense in which

that and similar expressions, such as 'upon' goods, are used in the

lengthening line of judgments which have been delivered in this

Court upon the subject. What is referred to may, I think, be

described as a relation consisting in this, that some conduct is

selected by the relevant legislation as being a step in the

production, manufacture or distribution of goods and in that

character is made of the essence of the tax. A tax must

necessarily be made payable by a person; but it is not a duty of

excise unless the criterion of the person's liability is the fact

that some act of his possesses the quality of a contribution either

to the physical character of goods as subjects of commerce or to

the sequence of events which results in their being available, as

in the hands of a consumer, to be put to their ultimate purpose.

The reason is that a duty of excise is, at bottom a burden upon

home production or manufacture. Obviously it is such a burden if it

is payable upon a step in production or manufacture in its

character of such a step. Not so obviously but just as certainly,

it is such a burden if it is payable upon a step in distribution in

its character of such a step; for in that case from the time the

goods come into existence the law makes it inherent in their

nature, as goods requiring distribution in order to become

available to fulfil their purpose, that the tax shall be paid."

It may be said that the duty with which the plaintiff in this case seeks to charge the defendant, in so far as it operates in relation to money received by the defendant as the price of goods sold, has the same practical effect upon the defendant and upon its business of selling its goods as would have been produced by the exaction of duty by an Act expressed in terms which made the act of selling goods the criterion of liability to the duty. But an assertion that this is a sufficient reason for assigning to the duty the character of a duty of excise would be, I think, inconsistent with the foregoing pronouncements, and, also, with earlier pronouncements, such as that of Latham C.J. in Attorney-General (N.S.W.) v. Homebush Flour Mills Ltd. (1937) 56 CLR, at p 398 . (at p37)

12. The defendant seeks to maintain that to the extent that the Act operates so as to render the defendant liable to pay duty in respect of money received as the price of goods sold this is in reality a tax upon the sale and that this is a tax "upon the goods" in the sense attributed to that expression and similar expressions in Bolton v. Madsen [1963] HCA 16; (1963) 110 CLR 264 and in Anderson's Pty. Ltd. v. Victoria [1964] HCA 77; (1964) 111 CLR 353 . But in my opinion the problem before the Court cannot be resolved by saying first that a sales tax is an excise and, secondly, that this is in reality, or is in substance, a sales tax in its relevant operation. In this context, such an expression as "in reality" is ambiguous. If it refers to the economic consequences of the tax, the statement in which it appears is of no assistance in answering the question before the Court. If it refers to the real operation and effect of the Act by which the duty is imposed, I cannot agree with the statement that the duty with which we are concerned is "in reality" a sales tax. When it has been said that the character of a duty depends upon the operation and effect rather than upon the form of the Act by which it is imposed I think that what has been meant is that an examination must be made of the provisions of the Act to determine its legal effect, according to the proper construction of its operative provisions, whatever their form may be and whatever label may be attached by the Act to the duty which is imposed by it. The duty so imposed cannot be characterized as being "in reality" a duty imposed upon the act or transaction of selling goods and as, therefore, being an excise, unless it can be seen upon an examination of the provisions of the Act that it is that act or transaction which has been made the condition of the liability of the vendor to pay it. (at p38)

13. In Western Australia v. Hamersley Iron Pty. Ltd. (No. 1) [1969] HCA 42; (1969) 120 CLR 42 , Kitto J. said:

"We have therefore to identify the criterion of liability under

s. 101A. Is it (if I may use further words from the judgment in

Bolton v. Madsen (1963) 110 CLR, at p 273) the taking of a

step in a process of bringing goods into existence or to a

consumable state, or passing them down the line which reaches from

the earliest stage in production to the point of receipt by the

consumer? Is the criterion such that the tax bears a 'close

relation' to the production or manufacture or distribution of

goods, affecting them as the subjects of manufacture or production

or as articles of commerce?" (1969) 120 CLR, at p 63

In my opinion the task of the Court in this case is to identify the criterion of liability under s. 99B, read with the other provisions of the Act. The questions which are to be asked and answered in relation to it are the same as those which were there posed by his Honour. (at p38)

14. As I have said, the act which the statute makes the criterion of liability is the receiving of money. No doubt the Act was intended to apply to and to operate upon the receiving of money in cases where it is received as the payment of the price of goods as well as in very many other cases. Subject to the exemption provisions, it was intended to apply to all cases of receiving money for that is precisely what it provides. Therefore, when it applies to a receipt of money which is, in fact, paid as the price of goods this application of it is not fortuitous but is intended, just as is its application to other receipts of money. But the sole fact by reference to which duty is imposed in such a case and likewise in all other cases in which it is imposed is that the money has been received. (at p38)

15. It is possible to envisage an Act which, in terms, imposes a duty upon any receipt of money which answers any description of the circumstances in which it is received, contained in any item in a list of different specified sets of circumstances. In such a case liability to duty would be made by the Act to depend, in respect of each item in the list, upon two conditions, the first being that money has been received, and the second being that the description of the circumstances of its receipt contained in that item has been satisfied. In my opinion in such a case a claim that the duty demanded by reference to one of the items in the list was a duty of excise could not be met simply and decisively by asserting that some of the duties imposed by the Act were not duties of excise and that, therefore, no duty imposed by it could be a duty of excise. If a duty were imposed upon stated conditions which were such that it would have the character of a duty of excise its imposition would not be validated merely because by the same Act other duties were also imposed which did not have that character. As Windeyer J. said in Dennis Hotels Pty. Ltd. v. Victoria (1960) 104 CLR, at p 598 , "an impost which is invalid cannot be made valid by coupling it with an impost which is valid". But I cannot accept the view that the character of the duty now under consideration is to be ascertained by treating the relevant provisions of the Act as if they imposed separately a duty on each of the very large number of transactions or sets of circumstances out of which a receipt of money may arise. It has been suggested that no receipt of money is "colourless" and that in the application of the Act to any one of the very great number of particular cases in which money is received it is necessary to ascertain the attendant circumstances and, in particular, the source and purpose of its payment. It is suggested that this is required in order to determine whether the particular receipt of money is taxable or is exempt. I have already referred to the exemption provisions. It is true that most, but not all, of them depend upon the purpose for which the money is paid and received. But this does not lead me to think that in each case to which the duty does attach, by reason of the generality of the taxing provision, the duty is to be treated as if the conditions upon which its imposition depends are inclusive of the circumstances which precede or accompany the payment of money. If provision were to be made in an Act imposing duty upon receipts of money, for any exemptions, it would be necessary to specify by some description the receipts which were intended to be exempted, in order that the general applicability of the taxing provision to all receipts might be qualified in the manner which was desired by the legislature. This has been done in framing the Act under consideration. But the fact that the imposition of duty is made subject to exemptions, which are available in certain described circumstances, does not mean, in my opinion, that the existence in each particular case of attendant circumstances other than those specified in the exemption provisions is to be treated as a criterion selected by the Act as one by reference to which the duty is imposed in each case to which it applies. The Act is, in my opinion, quite different from the hypothetical Act to which I have referred earlier, in which some attendant circumstance was supposed to be stated and to form part of the definition of the conditions upon which a tax would operate. (at p40)

16. I do not accept the proposition that in determining whether a duty of excise is imposed, the Act which imposes it can never be treated as having what has been called a distributive effect. But my rejection of that proposition does not mean that I think that the generality of the taxing provision is without importance. It is a very strong indication, against ascribing to the duty being considered the character of an excise duty, that there is no reference in the provisions by which it is imposed to commodities generally or to particular commodities. See Browns Transport Pty. Ltd. v. Kropp (1958) 100 CLR, at p 129 . This dissociation of the duty from any expressed concern with commodities as such, or with dealings in commodities, is of great significance, notwithstanding the presence of some provisions, inserted for special purposes, in which reference is made to goods, such as s. 101A. (at p40)

17. It was argued on behalf of the plaintiff that in its application to receipts of money where these are associated with the sale of goods, there is a lack of uniformity in the incidence of the Act which is a strong indication against regarding it as imposing an excise duty. Two persons each of whom deals in goods of the same quantity and value may pay different amounts of duty. This may occur because one receives and the other does not receive the full price of the goods. It may occur because different amounts of tax become payable when the price is paid in one payment and when it is paid by instalments. It may occur, when the procedure under s. 99A is adopted, because the same tax may be payable upon the receipt of the price of one article as upon the receipt of the price of many such articles. I think that these considerations assist the plaintiff's argument. This is not because I consider that it is essential, in order that a duty may be an excise duty, either that there should be an exact mathematical correspondence between the amount of the duty and the value or the quantity of the goods, or, that the duty should fall in every case without exception and to the same extent on every dealing in the goods. It is possible that an Act which attracts duty may be seen to have a sufficiently close relation to the manufacture or the sale of goods to make it a duty of excise, notwithstanding that the quantitative relationship of the amount of the duty to the quantity or value of the goods is not exact and notwithstanding that in special cases it does not operate or does not operate in the same way: cf. Matthews v. Chicory Marketing Board (Vict). [1938] HCA 38; (1938) 60 CLR 263 But where it appears, as I think it does in this case, that the diversity in the incidence of the duty upon persons dealing in the same commodities may be quite substantial this is, I think, an indication against classing the duty as an excise duty. The real significance of this diversity is that it emphasizes the fact of which it is the result, namely, that the duty is a duty imposed unconditionally (subject to the exemptions) upon the receipt of money. The view that in its relevant operation it is really imposed upon the taking of a step in the distribution of goods is rendered difficult to maintain, when it is seen that some who sell goods pay no duty and that others pay different amounts of duty upon receipts of money in respect of sales of goods of the same kind and value. (at p41)

18. I return to the questions quoted above from the judgment of Kitto J. in the Hamersley Case (1969) 120 CLR, at p 63 I have said that these are the questions to be answered in order to identify the criterion of liability under the provisions with which this case is concerned. I think that those questions should be answered in the negative. The considerations which have led me to that conclusion have already been indicated. My fundamental reason for reaching it is that what attracts liability is the act of receiving money. It is on that act that duty is imposed. When, in a particular case, the money is received because a person has incurred a liability to pay the price of goods and discharges that liability, it is not that fact which attracts liability. The same liability attaches when the same amount of money is received and that fact does not exist. Upon a full consideration of the relevant provisions of the Act I think that they ought not be to regarded as imposing a duty upon the occurrence of each of a great number of sets of facts, having in common that money is received but including also the facts, or some of the facts, of the transaction in respect of which the money is received. They ought not to be regarded as having the effect that in their application to any particular case, the circumstances out of which the receipt of money arose should be treated as included in the conditions upon which the imposition of the duty is made by the Act to depend. (at p41)

19. The conclusion which I have stated seems to me to be in harmony with the authorities dealing with the question whether or not a duty is a duty of excise. If this view is said to be too rigid and to depend upon a distinction which is too refined, I can say only that I regard it as being based upon the distinction which has been clearly drawn in the cases to which I have referred, between a tax imposed upon the taking of a step in the distribution and sale of goods on the one hand and a tax which, although it may have the same practical effect upon a manufacturer or vendor who takes such a step, as a tax upon that step would have, is not imposed upon the taking of that step and is not imposed in terms which make any reference to goods or to dealings in goods. If the distinction is to be regarded as over-refined then the tests which have been adopted for determining whether or not a tax is a duty of excise should be abandoned or modified. If they be accepted, I think that their application to this case requires a conclusion that the duty payable, according to the terms of the Act, by the defendant in consequence of the receipt by it of the money to which the statement forwarded to the Commissioner refers is not a duty of excise. The question in the originating summons should be answered "No". (at p42)

20. The questions asked in the originating summons are answered as follows:

Questions 1 and 2: The State of Western Australia is not entitled to payment of duty under ss. 99A and 99B of the Stamp Act, 1921-1969 by Chamberlain Industries Pty. Ltd. in respect of amounts received by that company as the whole or part of the purchase price payable on the sale of tractors and machinery (assembled or unassembled) manufactured by that company in Australia whether such sales are made directly to members of the public or through dealers or agents employed or appointed by that company. (at p42)

21. Order that the plaintiff pay the defendant's costs of the originating summons both in the Supreme Court of Western Australia and in this Court. (at p42)

22. The State of Victoria v. I.A.C. (Wholesale) Pty. Limited. (at p42)

BARWICK C.J. In my opinion, for reasons given by me in Western Australia v. Chamberlain Industries Pty. Ltd., the question asked in the case stated in this action should be answered in the affirmative. (at p42)

McTIERNAN J. I would answer the question in this case in favour of the State of Victoria. The reasoning by which I arrived at a conclusion in favour of the State of Western Australia in the case of Western Australia v. Chamberlain Industries Pty. Ltd. is, in my opinion, appropriate in the present matter and requires the conclusion that the question in the special case be answered "No". (at p43)

KITTO J. In my opinion the question should be answered "No". My reasons are similar to those which I have explained in Western Australia v. Chamberlain Industries Pty. Ltd. and I need not restate them. (at p43)

MENZIES J. There is no distinction between this case and the case of Western Australia v. Chamberlain Industries Pty. Ltd. (at p43)

2. For the reasons which I there gave for thinking the duty in question is a duty of excise, I consider that the duty here in question is such a duty. (at p43)

3. The question asked should be answered "Yes". (at p43)

WINDEYER J. I have in my judgment in Western Australia v. Chamberlain Industries Pty. Ltd. said all that I wish to say of this case, which was heard at the same time. I agree in the order that the Chief Justice proposes. (at p43)

OWEN J. This case raises a question similar to that which was argued in Western Australia v. Chamberlain Industries Pty. Ltd. The defendant is a wholesale dealer in new motor vehicles which it purchases from the manufacturers in Australia and sells to retailers. The Act with which the case is concerned is the Stamps Act 1958 of the State of Victoria and it is not suggested that there is any distinction between its relevant provisions and those of the Stamp Act, 1921-1969 of Western Australia which were considered in Chamberlain's Case. For the reasons which I gave in that case I am of opinion that the question asked in the instant case should be answered "Yes". (at p43)

WALSH J. The plaintiff sued the defendant in the original jurisdiction of this Court claiming a declaration that the provisions of the Stamps Act 1958 of the State of Victoria and in particular ss. 53E and 53F thereof validly apply to the receipt in Victoria by the defendant of sums of money in respect of the sale by it of new goods manufactured in Australia. The parties concurred in stating a special case seeking the opinion of the Full Court upon a question of law therein set out. The special case states that the defendant carries on in Victoria the business of buying new motor vehicles manufactured in Australia and of selling them. Details are given of the methods by which the defendant and the companies with which it is associated conduct their trading operations but it is not necessary to state these details. It is enough to say that the defendant's business includes the sale of new vehicles which have been manufactured in Australia. It has elected to pay duty imposed by the Act, in accordance with s. 53F thereof. It has disputed its liability to include in the statement, which it is required by that section to forward to the Comptroller of Stamps, moneys received by it as the wholesale price of the vehilces and has disputed its liability to pay duty on the receipt of those moneys on the ground that that duty constitutes a duty of excise within the meaning of s. 90 of the Constitution. The question raised by the special case is whether or not that claim is well-founded. (at p44)

2. In the case of Western Australia v. Chamberlain Industries Pty. Ltd. which was argued with this case a similar question was raised concerning the Stamp Act of the State of Western Australia and particularly ss. 99A and 99B thereof. There are some differences between the provisions of the two Acts. But I am of opinion that these differences do not furnish any ground for coming to a different conclusion as to the character of the duty with which this case is concerned from that which I reached as to the character of the duty considered in that case. (at p44)

3. For the reasons I have given in Western Australia v. Chamberlain Industries Pty. Ltd. I am of opinion that the duty to which the question submitted to the Court refers is not a duty of excise and that that question should be answered "No". (at p44)

Question asked in the case stated answered in the affirmative.