Case: Dick Smith Electronics Pty Ltd v Federal Commissioner of Taxation 97 ATC 5089
Outcome: considered
In the determination of the issues of construction arising on the appeal, being issues on Lindsay's case related to the operation at least ultimately of Item 36 headed Subcontractors , it was submitted by Lindsay that a broad and beneficial approach is appropriate. I was referred in that regard to the Full Court decision in Commissioner of Taxation v Reynolds Australia Alumina Ltd and others (1986) 18 FCR 29, where Burchett J observed generally at 46, in relation to the then Item 14 and the then definition of aids to manufacture of the precursor to the present STEC Act, that 'the beneficial purpose of the legislation with which this appeal is concerned is as apparent as was that of Div 10 in the cases to which I have referred '. That case involved the exemption or otherwise of sales tax in relation to a conveyor in operation from a mine to a refinery, and in particular whether (to cite the description of Beaumont J at 35) that conveyor should be seen as 'something ancillary to the activities at the mine site and therefore part of the mining operations...'. In that latter regard his Honour expressed the need for appraisal of the character of a conveyor by the adoption of a broad perspective. Earlier in relation to an issue involving modifications appearing in the Third Schedule to that precursor legislation, Olney J (sitting as a single justice) in Commissioner of Taxation v Sherwood Overseas Pty Ltd (1985) 75 FLR 474 at 479 spoke of the need for 'a robust approach... to be taken to the construction of the Third Schedule, particularly in view of the fact that it is part of a statute imposing taxation... '. That latter dictum was subsequently cited with approval by Hope JA in Federal Commissioner of Taxation v Kentucky Fried Chicken Pty Ltd (1988) 12 NSWLR 643 at 654, in a context also of sales tax, and where his Honour observed that '[s]ales tax legislation is not intended to stultify trade and commerce but is intended to produce revenue for the government from trade or commerce'. More recently in Dick Smith Electronics Pty Ltd v Federal Commissioner of Taxation 97 ATC 5089 at 5094, Carr J (with whose reasons Foster and Tamberlin JJ agreed) endorsed what he termed the need for a 'somewhat robust approach to the problem [as] appropriate in sales tax cases' , and Tamberlin J (at 5096) added that 'a presumption... should be given [to] the most natural and ordinary meaning which is appropriate in the circumstances'. In that latter regard, his Honour referred to the High Court's decision in Downland Publications Ltd v Deputy Commissioner of Taxation (1983) 57 ALJR 286, where at 288, Gibbs CJ (with the concurrence of the other four members of the High Court) spoke of the need, in the context of construing an Item of the then sales tax legislation, '... to look at its form, its contents and its use', and endorsed earlier dictum of Stephen J Rotary Offset Press Pty Ltd v Deputy Federal Commissioner of Taxation (1972) 46 ALJR 609 that 'the test properly is one of popular usage and... that the matter is entirely a question of fact to be decided upon an inspection of the document guided by common knowledge'. The Full Court decision in Dick Smith related incidentally to the present sales tax exemption legislation.