Case: R v Hickman; Ex parte Fox [1945] HCA 53 ; (1945) 70 CLR 598
Outcome: cited
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. 18 The Hickman principle states that a privative clause (s 175 in this case) is given effect only if the purported exercise of the power is bona fide, relates to the subject matter of the legislation and is reasonably capable of reference to the power given to the body exercising it. 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. 20 His Honour went on to explain the application of the Hickman principle to a notice of assessment, at 199-200 (footnotes omitted): The power to make an assessment is exercised by ascertaining the taxpayer's taxable income and defining the resulting tax liability of the taxpayer. If it appears, either on the face of a notice of assessment or from elsewhere that the Commissioner has not attempted in good faith to determine the taxable income or has not made an assessment definitive of the tax liability of the taxpayer, the assessment does not attract the protection of s 175. Nor, in my opinion, does s 177(1) make the production of such a purported notice of assessment conclusive evidence of the due making of the assessment. 31 The variety of matters upon which the applicant sought to rely go no further than establishing that the respondent might have taken an alternative view as to the assessment. The matters relied upon could usefully be raised in Pt IVC proceedings in challenging the amount of the tax liability, however, they do not assist in the determination of the validity of the assessment itself in the Hickman sense. 32 Accordingly, the applicant's grounds that challenge the validity of the assessment are not made out and must fail. Given my findings below in relation to the validity of the Garnishee Notices, I need not consider whether the Garnishee Notices were themselves issued for an improper purpose.