On 20 September 2019, the County Court of Victoria (Marks J) held that the Deputy Commissioner of Taxation was not entitled to be repaid overpaid GST refunds from a tax agent, who didn’t pass them on to its client.

See below for a summary of the case.

[Tax Month – January 2020]



DCT v MWB Accountants Pty Ltd [2019] VCC 1516

The agent prepared various draft BASs for a client which recorded amounts owing to the ATO, which the client duly paid. However, the agent then lodged different BASs on behalf of the client which showed amounts owing by the ATO to the client (due to GST entries). Over the 2013-2016 period, the ATO made 9 refund payments, amounting to some $228,711.

The amounts were paid into the agent’s bank account, not the client’s, as the client had nominated this account for ATO purposes. The client never received any of the payments, ie they were retained by the agent. The client subsequently engaged a new tax agent who lodged correct returns and the full amount of tax was paid. The ATO then allocated the overpaid refunds to the agent’s RBA, which gave rise to the agent having an RBA deficit debt of $228,711, which the Commissioner sought to recover under s 8AAZN of the TAA.

The District Court dismissed the Commissioner’s claim. The tax agent never became the recipient of the administrative overpayment within the meaning of s 8AAZN. This meant that the allocation of the amounts to the agent’s RBA was “an error” and therefore ineffective. The Commissioner in fact intended to pay the client, not the agent. The client was therefore the recipient for the purposes of the TAA.

(DCT v MWB Accountants Pty Ltd [2019] VCC 1516, County Court of Victoria, Marks J, 20 September 2019.)


TAXATION – meaning of ‘administrative overpayment’ in s8AAZN of the of the Taxation Administration Act 1953 (Cth) (TAA53– the defendant or its director was the tax agent for another entity – the defendant’s bank account was nominated as the bank account for payments to that other entity – as a result of BASs lodged by the defendant purportedly on behalf of the other entity, the Commissioner made payments to the defendant’s bank account, intending to pay refunds to the other entity – the other entity subsequently advised the Commissioner that it had not authorised those lodged BASs or received the refunds – subsequently the Commissioner allocated the amounts of those payments to the defendant’s Running Balance Account (RBA) describing each as an ‘administrative overpayment’ – whether those payments were administrative overpayments made by the Commissioner to the defendant.

Sections 8AAZN(1), s8AAZN(3) of the Taxation Administration Act 1953 (Cth)


About the author