The Federal Court has granted the Commissioner’s application for summary judgment against a taxpayer for a debt of over $38.5m (including interest and late payment charges), even though the taxpayer’s objection against the relevant amended assessment had not yet been dealt with by the Commissioner. The substantive matter related to an amended assessment issued to the taxpayer for the year ended 30 December 2009 in relation to the lease of “mobile offshore drilling units in Australia” which the Commissioner contended was a Pt IVA withholding tax scheme pursuant to s 177CA of the ITAA 1936 and that deductions were not allowable for any part of the relevant lease payments the taxpayer made.
In granting the Commissioner’s application for summary judgment, the Court relied on ss 175 and 177(1) of the ITAA 1936, which provided that the production of a notice of assessment was conclusive evidence of its due making and validity (and that it could only be challenged under appeal and review proceedings or on an application for judicial review), despite the taxpayer’s defence that the Commissioner was not entitled to recover both the unpaid tax claim and the administrative penalty in the circumstances.
At the same time, in dismissing the taxpayer’s application for a stay of enforcement of the judgment, the Court noted that a pending review was insufficient grounds to grant a stay and that it was not in a position in such an ex-parte application to review the merits of the taxpayer’s case primarily in view of the changed views of the parties over the issues to date.
(DCT v Songa Offshore Pte Ltd [2013] FCA 839, Federal Court, Gordon J, 19 August 2013.)
[LTN 160, 20/8/13]