Case: Deputy Commissioner of Taxation v Richard Walter Pty Ltd [1995] HCA 23 ; (1995) 183 CLR 168
Outcome: cited
Section 175 preserves the validity of an assessment even though there has been some non-compliance with another provision in the ITA Act. However, in the High Court decision of Deputy Commissioner of Taxation v Richard Walter Pty Ltd [1995] HCA 23 ; (1995) 183 CLR 168 at 182 Mason CJ stated of s 175 (footnotes omitted): This section does not relieve the Commissioner from performing his duty to make an assessment. The section does not create a valid assessment where none has been made at all. The section requires an actual assessment as a condition of its operation. But otherwise, the effect of s 175 is that compliance with particular provisions of the Act is not essential to the validity of an assessment. 17 Subject to the application of the principle in R v Hickman; Ex parte Fox [1945] HCA 53 ; (1945) 70 CLR 598 ('the Hickman principle'), ss 175 and 177(1) operate to preclude a taxpayer from challenging an assessment except in objection, review and appeal proceedings brought pursuant to Part IVC of the TAA: Richard Walter 183 CLR at 186 per Mason CJ, at 197-199 per Brennan J, at 211 per Deane and Gaudron JJ, at 222-223 per Toohey J; and at 233 per Dawson J. 19 In Richard Walter 183 CLR at 199, Brennan J stated that the Hickman principle should be applied in the construction of s 175 (footnotes omitted): The jurisdiction of the Federal Court on appeal from, or of the Administrative Appeals Tribunal on review of, a decision on an objection extends to every issue which affects the amounts ultimately included in the taxable income or tax liability of a taxpayer. If any of these issues be resolved in favour of the taxpayer, an amendment of the assessment so as to reduce the taxable income or the tax liability of the taxpayer must follow. The width of that jurisdiction and the evidence purpose of the Act to channel all issues as to the true tax liability of the taxpayer into the objection, review and appeal procedures found the clearest implication that exceptions to the broadest literal application of s 175 must be narrowly confined and a corresponding operation must be attributed to s 177(1). As the scheme of the Act is to protect the validity of notices of assessment while allowing a taxpayer a full opportunity to have the general provisions of the Act affecting tax liability applied, I would construe the term "due making of the assessment" in s 177(1) as extending to every purported exercise of the power to ascertain the taxable income and tax liability of a taxpayer which satisfies the criteria expressed by the Hickman principle. 30 With regard to the applicant's submissions that the assessment was raised for an improper purpose or lacked bona fides and there was no genuine or rational attempt to properly assess and make proper inquiries, I find no proper factual basis upon which this claim can succeed. I also cannot be satisfied that the assessment was tentative or provisional. The notice of assessment clearly sets out the applicant's taxable income, and a fixed sum that is due and payable. There is no indication that the tax liability stated is tentative or provisional: see Richard Walter at 237 per McHugh J.