The Full Federal Court has allowed the taxpayers’ appeal from a 2011 Federal Court decision concerning their applications for review of the disallowance of objections to various income tax and GST assessments and penalty notices.
The Taxpayers had made applications to have the AAT review decisions made by the Commissioner to disallow certain objections as to income tax and GST assessments, but these applications were dismissed under s 42A(5)(b) of the Administrative Appeals Tribunal Act 1975 for non-compliance with directions made by the AAT on 26 August 2009 to produce various documents, proof of calculations in BASs, lists of input tax credits claimed on acquisitions in the course of subdividing and developing land, etc. These liabilities in respect of both taxpayers total approximately $26.85m.
The Taxpayers then appealed to the Federal Court (Gilmour J) for judicial review of the AAT decision on the ground that it failed to take into account a relevant consideration under s5(1)(e) of Administrative Decisions (Judicial Review) Act. However in LVR (WA) Pty Ltd & Anor v AAT and FCT [2011] FCA 1146) Gilmour J dismissed, this appeal.
The taxpayers appealed to the Full Federal Court from that decision. The one ground of appeal was that the primary judge erred in failing to find that the AAT improperly exercised its power (conferred by s 42A(5)) by reason of failing to take into account a relevant consideration, namely the content of a sworn witness Affidavit which was responsive to most of the issues of delay for which the AAT action was dismisssed.
Although the Full Federal Court noted the appeal raised “a short and orthodox question” (failing to take into account a relevant consideration), it said “the circumstances in which that question arises are, in our experience, unique”. The Court said the reasons of the Tribunal covered 59 paragraphs and, “with the exception of a small number of words, phrases and sentences, were taken verbatim and without attribution from the written submissions filed in the Tribunal on behalf of the Commissioner”. The Tribunal did not however, reproduce the paragraphs of the Commissioner’s submissions which considered the content of the Affidavit.
The Court found that the Tribunal did not have regard to the material in the Affidavit and thus it failed to have regard to the taxpayers’ explanation relevant both to the question of breach of the Tribunal’s directions and to the exercise of the Tribunal’s discretion conferred by s 42A(5)(b) of the AAT Act.
The Court therefore allowed the taxpayers’ appeal and ordered that the AAT’s decision of 30 July 2010 be set aside and that the Tribunal further consider the matter to which the decision relates.
(LVR (WA) Pty Ltd & Anor v AAT and FCT [2012] FCAFC 90, Full Federal Court, North, Logan and Robertson JJ, 22 June 2012.)
[LTN 126, 3/7]