In a somewhat unusual case, the AAT has refused a taxpayer’s application for the issue of summonses to 3 ATO employees so the taxpayer could examine them in support of its claim to be carrying on a business and therefore be entitled to input tax credits.
The substantive application involves disputed entitlements to input tax credits associated with what the taxpayer claims is a motor vehicle trading business. The taxpayer sought permission to examine 3 employees of the ATO under oath; something the ATO resisted. Without a summons from the Tribunal, it noted that it would not be possible for the taxpayer to conduct the examination it wants to conduct.
The AAT noted that a significant threshold conclusion was required as to whether or not the input tax credits claimed by the taxpayer were referable to creditable acquisitions. To establish that, it is necessary for the taxpayer’s activities to have constituted a business or a venture or concern in the nature of trade such that they comprised an enterprise as defined the GST Act. If those activities are properly capable of being so characterised, then they will constitute the carrying on of an enterprise and the acquisitions under review will potentially be creditable acquisitions. The taxpayer contented that it was carrying on a business and that 3 particular ATO employees would be able to corroborate, or provide essential corroborative support to, that contention. The taxpayer also sought to examine these employees on the basis that upon any appeal to the Federal Court, it would be unable to lead additional evidence.
In the present case, the AAT considered the ordinary rules of evidence were appropriate and it said the only evidence that could be led from the 3 ATO employees was hearsay evidence. In the circumstances, the Tribunal concluded it was “neither necessary nor appropriate that the evidence of the 3 ATO employees be allowed to be led”. It refused the taxpayer’s application.
(AAT Case [2012] AATA 317, Re Davsa Forty-Ninth Pty Ltd ATF Krongold Ford Bus Unit Trust and FCT, AAT, O’Loughlin SM, AAT Ref: 2011/1945, 25 May 2012.)
[LTN 116, 19/6]