In the taxation jurisdiction, provisions have been implemented to confine taxpayer challenges under Part IVC of the Taxation Administration Act 1953 (TAA). These provisions include sections 175 and 177 of the Income Tax Assessment Act 1936 (ITAA 1936) and paragraph (e) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977 (AD(JR) Act).
Despite the fact that resolution between the Australian Taxation Office (ATO) and a taxpayer can be dealt with by an objection and appeal process within the ATO, a taxpayer dissatisfied with a decision by the Commissioner can also either:
· apply to the Administrative Appeals Tribunal (AAT) for a review of the decision (handled by the Taxation Division of the Tribunal); or
· appeal to the Federal Court.
Alternatively, the taxpayer may elect that a matter be dealt with by the Small Taxation Claims Tribunal (which is part of the AAT) if the amount in dispute is less than $5000.
Subsequently, the Commissioner or the taxpayer may appeal to the Federal Court from a decision of the AAT on a question of law. Often, the Court will refer the matter back to the tribunal to make appropriate findings of fact after it has decided on the question of law.
Additionally, a system of public and private rulings was introduced on 1 July 1992. This is an important element in the self-assessment scheme. A private ruling is a written expression of opinion by the Commissioner about the way in which a tax law or tax laws would apply to a person in relation to a particular arrangement in respect of a specified year of income. A public ruling enables the Commissioner to express his opinion on the way tax laws apply to arrangements and, by its nature, has a wider application than a private ruling. If the Commissioner provides a private or public ruling, it is legally binding to the extent that it is favourable to the taxpayer. Rulings not legally binding are treated as administratively binding.
Other noteworthy aspects of the review system include that:
· the taxpayer bears the onus of proof to establish that the assessment exceeds the amount of the taxpayer’s true liability;
· the taxpayer needs to prove positively what changes need to be made in order to correct the assessment, as simply showing the assessment is somehow wrong will not suffice[1]; and
· the taxpayer must show on the balance of probabilities that the assessment exceeds the amount of the taxpayer’s true liability.
The making of a taxation assessment is central not only to the collection of revenue but also to the issue of a notice that tax is due and payable and to the issuing of a departure order.
It is therefore not surprising that the legislature has sought to protect that process from disruption, primarily through sections 175 and 177 of the ITAA 1936.
Through such provisions, the legislature has aimed to insulate the assessment making process from review and give the Commissioner an evidentiary advantage in seeking to recover outstanding taxes.
Additionally, Schedule (1) (e) of the AD(JR) Act operates to exclude:
Decisions making, or forming part of the process of making, or leading up to the making of, assessments or calculations of tax, charge or duty, or decisions amending or refusing to amend, assessments or calculations of tax, charge or duty under [amongst others], the Income Tax Assessment Act 1936.
Arguments for limiting judicial review clearly include the potential to undermine the current tax collection system and the possibility that substantial resources would have to be devoted to defending judicial review proceedings.
Under the provisions set out in Part IVC of the TAA a taxpayer has:
· a right to seek review of the excessiveness of an assessment
· recourse to a specialised tribunal through the AAT, which has considerable expertise in the area of taxation; and
· recourse to the Federal Court which has considerable taxation expertise.
· Under these provisions the Commissioner is under a statutory duty to take whatever action is necessary to give effect to a decision by the AAT or Federal Court.
As noted by Brennan J in Deputy Commissioner of Taxation of the Commonwealth of Australia v Richard Walter:
The jurisdiction of the Federal Court on appeal or of the Administrative Appeals Tribunal on review of a decision or an objection extends to every issue which affects the amounts ultimately included in the taxable income or tax liability of a taxpayer.[2]
As a result of the Richard Walter case, in which subsection 177(1) was found to be consistent with the Hickman principle, judicial review proceedings can be instigated with respect to:
· allegations of bad faith;
· where the Commissioner has no power to make an assessment; and
· declaratory relief may be available where no assessment has been made.
Under section 45(2) of the Workplace Relations Act 1996 (the WRA) most decisions of the Australian Industrial Relations Commission can be appealed to the Full Bench but leave is required. In determining whether to grant leave, the Full Bench can take into account the usual special leave considerations and must, under section 45(2), grant leave if it is in the public interest to do so. Section 45(2) is not exhaustive of the special leave considerations, but rather creates an extra, mandatory, ground of public interest for granting leave.
In addition to the availability of appeals under section 45(2), under section 109 the Minister may apply for a review by a Full Bench of an award, order or decision of a single member if the Minister believes the decision is not in the public interest.[4]
A Full Bench has full merits review powers. That is, it may quash, confirm or vary the decision, make a new decision, or refer the matter back to a single member.[5] A Full Bench may review the decision where an applicant shows that the decision was not reasonably open to the commissioner, or some other judicial-review-type ground.[6] The appeal is by way of a re-hearing of the case.[7]
The Commission may refer a question of law to the Federal Court which then allows for the usual appeal process through the courts.[8] However, there is no appeal from a Full Bench.
A privative clause exists in section 150 of the WRA to protect a decision by the AIRC. The privative clause has been in the WRA, and the predecessor to that legislation since 1904. There does not appear to have been much direct re-consideration of the privative clause.
The privative clause does not operate to oust judicial review under section 75(v) of the Constitution where an applicant seeks a constitutional writ under that section.[9] The original jurisdiction of the High Court is complemented by section 44(2A) of the Judiciary Act 1903 (Cth) by allowing the High Court to remit constitutional writ matters back the Federal Court.[10]
The Courts have demonstrated their support for the WRA scheme. One of the main reasons for this is that the scheme insists on applicant’s exhausting appeal rights in the industrial hierarchy which allows a review court the benefit of specialist opinions when making its own determination. As noted by Kirby P in Boral Gas (NSW) Pty Ltd v Magill:
1. It recognises and gives effect to the legislative scheme provide by Parliament for internal appeals…
2. It affords a place to the specialised tribunal which may have a superior advantage in ready knowledge of the developments of jurisprudence under scrutiny which this court does not initially enjoy. Furthermore, that tribunal frequently has a superior armoury of remedies at its disposal than this court can offer
3. Whilst it may involve the possibility of additional cost or delay, it affords this court the advantage of having the opinion of the appellate tribunal should the tribunal determine the question of jurisdiction and should it still be the intention of the party to challenge jurisdiction
4. It allows complete exhaustion of any additional factor which may be relevant to establishing the facts said to ground jurisdiction, which facts may be more readily determined below than in this court…recognises the pressure of business in this court; and
5. It conserves to cases where no other remedy exists, the discretionary and exceptional remedies provided by the writs in the nature of the prerogative writs and recognises the pressure of business in this court, including the exercise of general supervisory jurisdiction.[11]
The court in that case also referred with approval to the following comments made by Mason J with respect to jurisdictional challenges to decisions of the Australian Conciliation and Arbitration Commission:
If the evidence remains the same, if the Full Bench on appeal has confirmed the decision at first instance and if the issue of fact is one in the resolution of which the Commission’s knowledge of industry specially equips it to provide an answer, greater weight will be accorded than in cases in which one or more of these factors is absent.[12]
[1] Trautwein v Federal Commissioner of Taxation (No 1) (1936) 56 CLR 63; McCauley v Federal Commissioner of Taxation (1996) 39 ATR 1.
[2] Deputy Commissioner of Taxation of the Commonwealth of Australia v Richard Walter Pty Limited (1995) 183 CLR 168, 199.
[3] All section references are to the Workplace Relations Act 1996 unless otherwise specified.
[4] Workplace Relations Act 1996 section 109.
[5] Workplace Relations Act 1996 section 45(7).
[6] Coal and Allied v Australian Industrial Relations Commission (2000) 203 CLR 193, 204. Amalgamated Metal Workers' Union v Gas & Fuel Corporation Mis 674/86 MD Print G5853, Australian Industrial Relations Commission, 22 February 1985.
[7] Coal and Allied v Australian Industrial Relations Commission (2000) 203 CLR 193, 204
[8] Workplace Relations Act 1996 section 46(1).
[9] R v Coldham;Ex parte Australian Workers’ Union (1983) 153 CLR 415.
[10] Re Printing and Kindred Industries Union v Nationwide News t/as Cumberland Newspaper Group No NI 142 of 1994 (940003), Industrial Relations Court of Australia.
[11] Boral Gas (NSW) Pty Ltd v Magrill (1933) 32 NSWLR 501.
[12] R v Alley; Ex parte NSW Plumbers and Gasfitters Employee’s Union (1981) 153 CLR 376, 390.