The Federal Court has dismissed tax recovery proceedings against a taxpayer following earlier quashing assessments issued to him.
Proceedings for the recovery of a taxation liability, grounded in the quashed assessments and related general interest charge (GIC), were originally instituted by a Deputy Commissioner of Taxation against the taxpayer in the Supreme Court of Queensland.
Given that the assessments concerned had been quashed (in Donoghue v FCT [2015] FCA 235), the Court said it was a necessary consequence that the recovery proceeding must be dismissed. That is because, in light of the quashing of the assessments, there is no taxation liability which is the subject of those recovery proceedings. The Court said the GIC otherwise payable must necessarily as a matter of law abate in full with the disappearance of the primary assessments to which the charge relates.
The Deputy Commissioner argued that the Court should adjourn further the recovery proceedings. However, the Court said that “to do that, though, would be to deny Mr Donoghue the consequential fruit of the forensic success which he has enjoyed in the judicial review proceedings mentioned”.
(Donoghue v FCT [2015] FCA 291, Federal Court, Logan J, 17 March 2015 (but updated as at 31 March 2015))
[LTN 67, 10/4/15]