The NSW Court of Appeal has partly allowed the Commissioner’s appeal against an earlier NSW Supreme Court decision which had held that an administration services company and a transport company should not be grouped with a chicken supplier partnership for payroll tax purposes.
The matter was first heard in the NSW Supreme Court which held in favour of the taxpayers. The Commissioner then successfully appealed to the NSW Court of Appeal. The taxpayers then appealed to the High Court which effectively reinstated the first instance decision. The High Court’s decision concerned the jurisdiction and powers conferred on the Supreme Court when conducting a review under s 97 of the Taxation Administration Act 1996 (NSW). In making its decision, the High Court remitted the matter back to the Court of Appeal.
The background facts are complex and essentially involved the grouping by the Commissioner of 4 entities (an administration services company, a transport company, a property company and a husband and wife partnership) and the refusal to exercise the discretion to de-group the admin and transport companies. The Court of Appeal noted the subject assessments and determinations made referred to 3 periods to which differing legislative provisions applied (ie Period 1 being 1 July 2001 to 30 June 2003, Period 2 being 1 July 2003 to 30 June 2005, and Period 3 being 1 July 2005 to 30 June 2007).
The Court of Appeal said it was to determine “afresh” the Commissioner’s appeal in light of the High Court’s decision. It ordered that the Commissioner’s decision in respect of Period 1, and specifically, the decision not to exercise the discretion under former s 16H of the Pay-roll Tax Act 1971 (NSW) in favour of the admin and transport companies, be remitted to the Equity Decision of the Court for further hearing and determination. However, the Court affirmed the Commissioner’s decisions in respect of Periods 2 and 3.
(Chief Comr of State Revenue v Tasty Chicks Pty Ltd [2012] NSWCA 181, NSW Court of Appeal, Meagher JA, Barrett JA, and Sackville AJA, 21 June 2012.)
[LTN 123, 28/6]