The NSW District Court has dismissed a Deputy Commissioner’s claim for recovery of penalties of over $365,000 notified in a director penalty notice (DPN). The DPN was served on the taxpayer but specified the wrong date for the remission of penalties.
The Commissioner claimed that the repeal of the original legislation under which the DPN was served (ie Div 9 of Part VI of the ITAA 1936) and its replacement by Div 269 of the Taxation Administration Act 1953, meant that new Div 269 authorised recovery of the penalties and that recent retrospective legislation (ie Sch 7 of Tax Laws Amendment (2011 Measures No 7) Act 2011) cured the problem with the date.
While the Court agreed that the retrospective legislation rectified the problem with the incorrect date notified on the DPN, it found that the new Div 269 did not authorise recovery of the penalties. This was because the DPN did not comply with s 269-25 in that it was neither given under that section, nor did it explain that the penalty would be remitted if, within 21 days of the date of the notice being posted, the obligations under s 269-15 were met (ie the directors caused the company to comply with its obligations under the Corporations Act 2001 or an administrator was appointed or the company was wound-up). Accordingly, the Court dismissed the Deputy Commissioner’s claim with costs.
(DCT v Zammitt [2012] NSWDC 135, District Court of NSW, Taylor DCJ, 31 August 2012.)
[LTN 171, 4/9]