Case: Deputy Commissioner of Taxation v Naidoo [1981] 81 ATC 4,537
Outcome: cited
It is well to remember the comments of Everett J in Deputy Commissioner of Taxation v Naidoo [1981] 81 ATC 4,537 at 4,543 to 4,544: I am in no doubt that the action of the officer of the Australian Taxation Office in taking the more direct and expeditious course of visiting the offices of the defendant's tax agents and personally delivering the notices of assessment to a partner of the firm was properly motivated, but I feel bound to hold that it did not comply with relevant provisions of the Act and Regulations. It is obviously an advantage to the Australian Taxation Office in some cases to be able to serve notices and other communications by following the method prescribed by either para (b) or para (c) of reg 59, but I consider that, if it does so, it is bound to adhere strictly to the letter of the regulation. Any departure from a plain and natural interpretation of the words of reg 59 could bring doubt and uncertainty into an area which is clear and definite. Regulation 59 is a protection for the Deputy Commissioner against taxpayers who may seek to evade their tax obligations by avoiding service of documents. The Taxation Office merely has to follow an appropriate option given by reg 59 to be able to pursue its administrative duties. It will only encounter legal difficulties if it disregards strict compliance with reg 59, even though the departure may appear completely technical and really of no significance. 52 His Honour went on to explain that the significance of service in the context of the creation of a tax liability against a person means the requirements of service must be regarded as matters strictissimi juris . In deciding that service was not effected in that case, his Honour held at 4,544: Despite the natural belief of the Deputy Commissioner in this case that the circumstances warranted the most expeditious and certain means in his judgement of bringing the obligation of the defendant to his personal notice, it remained necessary to comply with the provisions of the Act and the Regulations. 53 The Regulations operate, to the benefit of the respondent, to provide for deemed service in situations where the taxpayer may otherwise avoid being personally served. Strict compliance with the requirements of service is necessary, absent which evidence must be adduced to prove actual service, and here that actual service on the applicant occurred on 25 August 2006 prior to the service of the Garnishee Notices. 54 It is to be noted that the operation of reg 40 does not affect the operation of other laws of the Commonwealth, states or territories that deal with the service of documents: see reg 40(3). However, given that the notice of assessment was not served by post or left at the address of the place of residence or business, neither the Evidence Act 1995 (Cth) or the Acts Interpretation Act 1901 (Cth) assist the respondent. Accordingly, I am not satisfied that the notice of assessment was served on 25 August 2006, so there was no debt due and payable to the Commonwealth on that date, and the Garnishee Notices were invalid. 55 Given my finding that the Garnishee Notices were invalid, the question then arises as to what to do with the money paid into Court pursuant to the interlocutory orders made on 20 September 2006. It is clear that the notice of assessment has now been served on the applicant, and the debt is due and payable. The respondent submitted that in the meantime the tax must be paid. 56 I will allow the parties time to consider their position in relation to the money in Court. Accordingly I will hear submissions as to what orders should be made in light of these reasons. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. Associate: Dated: 4 May 2007 Counsel for the Applicant: F G A Beaumont QC with E Power Solicitor for the Applicant: Galbally and O'Bryan Counsel for the Respondent: H M Symons SC with P D Nicholas Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 22 and 23 November 2006 Date of Judgment: 4 May 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/655.html