Commissioner of State Revenue v ACN 005 057 349 Pty Ltd [2017] HCA 6: Land Tax

In Commissioner of State Revenue v ACN 005 057 349 Pty Ltd [2017] HCA 6 (8 February 2017) the High Court of Australia has, today (8 February 2017), unanimously allowed two appeals from a decision of the Court of Appeal of the Supreme Court of Victoria (see ACN 005 057 349 Pty Ltd v Commissioner of State Revenue [2015] VSCA 332 (8 December 2015)). 

In its decision, the High Court held that the Commissioner of State Revenue (the Commissioner) was not under a duty to issue amended land tax assessments and refund an excess amount of land tax that he had been paid.

Background

In the period 1990 to 2002, the respondent in each appeal, an owner of two adjoining properties (the taxpayer), had been assessed for land tax under the provisions of the Land Tax Act 1958 (Vic) (now repealed) (the LTA). 

In due course, each of the above assessment was paid and in 2007, the taxpayer transferred the properties to a related company.  A senior revenue officer of the Commissioner informed that related company in 2012 that there had been an error detected in assessments for land tax for the period 2008 to 2011. The error being that one of the adjoining properties had been the counted for land tax twice (the duplication error).  As a result the taxpayer came to the view that the 1990 to 2002 assessments contained the same duplication error, and attempted to lodge objections to those assessments under s 24A of the LTA, out of time - objections the Commissioner subsequently refused to consider.  Further, the taxpayer asked the Commissioner to issue amended assessments for the period 1990 to 2002, pursuant to s 19 of the LTA which dealt with the powers of district assessors and the duties of owners and occupiers -  that request was also rejected.

In the Supreme Court of Victoria

The taxpayer commenced two proceedings in the Supreme Court of Victoria (see ACN 005 057 349 Pty Ltd v Commissioner of State Revenue [2015] VSC 76 (6 March 2015)). The first proceeding sought mandamus to direct the Commissioner to issue amended assessments and to refund the excess amount with interest. The second proceeding sought restitution of the excess amount with interest. Justice Sloss dismissed the first proceeding and, in the second proceeding, found for the Commissioner and dismissed the proceeding. 

In the Court of Appeal in Victoria

The Court of Appeal in Victoria (see [2015] VSCA 332) allowed each appeal finding that, as the Commissioner knew alterations were necessary to ensure the completeness and accuracy of the assessments, he had a duty under s 19 of the LTA to issue amended assessments and refund the excess amount.  Further, the Court of Appeal also held that the Commissioner's duplication error had deprived the Commissioner of authority to retain the excess amount, and his refusal to issue amended assessments amounted to conscious maladministration. The Court of Appeal found that s 90AA of the LTA did not bar the proceedings. The Court of Appeal then made an order for mandamus directing the Commissioner to issue amended land tax assessments and to repay the excess amount to the taxpayer.

Appeal to the High Court

Following the grant of special leave, the Commissioner appealed to the High Court.

In its decision, the High Court has held that s 19 of the LTA did not impose any duty on the Commissioner to issue amended assessments and refund the excess amount.  The High Court has rejected the Court of Appeal's reading of s 19 of the LTA, taking the view that it elevated s 19 to a source of refund or recovery, independent of the provisions of the LTA dealing with objections and refunds.  Further, as the proceedings were for the refund or recovery of ". . . tax paid under, or purportedly paid under," the LTA - s 90AA applied to bar the proceedings brought by the taxpayer. 

On the finding of conscious maladministration, the High Court held there was no basis for the finding. The payment of the excess amount discharged a debt which the Court was of the view, rejected the taxpayer's contention that the Commissioner was unjustly enriched.  

The High Court allowed each appeal and set aside the orders of the Court of Appeal Victoria in each proceeding.

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Commissioner of State Revenue v ACN 005 057 349 Pty Ltd [2017] HCA 6 (8 February 2017)

ACN 005 057 349 Pty Ltd v Commissioner of State Revenue [2015] VSCA 332 (8 December 2015)  

ACN 005 057 349 Pty Ltd v Commissioner of State Revenue [2015] VSC 76 (6 March 2015)