Western Australia v Chamberlain Industries Pty Ltd

Western Australia v Chamberlain Industries Pty Ltd - [1970] HCA 5 - HCA 1970 case summary — Zoe

[48]

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)

[82]

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)

[88]

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)

[94]

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)

[107]

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)

[109]

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)

At a glance

Court

Decision date

Source

Judgment (127 paragraphs)

Western Australia v Chamberlain Industries Pty Ltd ("Receipts Duty case") [1970] HCA 5; (1970) 121 CLR 1 (19 February 1970)

Parties

Legislation Cited (2)

Cases Cited (14)