The ATO Wed 22.8.2012, released a Decision Impact Statement on the decision in Soong v DCT [2011] NSWCA 26.
That case involved the former s 222AOE of the ITAA 1936 and the NSW Court of Appeal (with a 5 member bench) unanimously held that the 14-day period within which a director was required to take specified action in response to a director’s penalty notice (DPN) ran from the date of the delivery of the notice in the ordinary course of the post, and not from the date of its posting (as a three member bench of its own Court) had held in Meredith’s case [2007] NSWCA 354. The ATO applied to the High Court for leave to appeal the Soong case, but was not given leave, on the basis that the decision was not attended with sufficient doubt.
The ATO, had to accept the decision – namely that a DPN issued under former s 222AOE is taken to be given at the time the notice would have been delivered in the ordinary course of post. Consequently, it said the intended recipient would have 14-days after the delivery in the ordinary course of post to cause the company to comply with s 222AOB of the ITAA 1936 and achieve remission of penalties.
However, the ATO worked to undermine the effect of the decision. The old DPN provisions were replaced in 2010 by new provisions in Div 269 of the TAA1, which expressly make this 14 day period run from the date of posting (this was for DPNs posted after 1 July 2010 under Tax Laws Amendment (2011 Measures No 7) Act 2011 or ‘2011 No.7 Act’). The 2007 No.7 Act also had effect to deem DPN’s given under the old regime to also be given at the time of posting. s28A of the Acts Interpretation Act 1901 permits service by post, but does not dictate the time of service in this way.
Further, the Commissioner held off issuing further DPNs under the old regime, whilst he got this legislation through.
As a result, the ATO notes that the Soong case will have little impact.
[LTN 162, 22/8]