mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Matthews v Chicory Marketing Board (Vict) [1938] HCA 38 ; (1938) 60 CLR 263
Outcome: applied
I do not agree that the words "manufactured" or "produced" must be read so as to apply only to goods that are intended to reach a third party consumer or to "go into the market", rather than to goods that might be consumed by a manufacturer itself in the course of its operations. Duties of excise are inland taxes on "a step in the production, manufacture, sale or distribution of goods": see Ha v New South Wales [1997] HCA 34 ; (1997) 189 CLR 465 ( Ha ) at 490. In Matthews v Chicory Marketing Board (Vict) [1938] HCA 38 ; (1938) 60 CLR 263 ( Matthews ) at 304, Dixon J said: To be an excise the tax must be levied "upon goods," but those apparently simple words permit of much flexibility in application. The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. (In Parton v Milk Board (Victoria) [1949] HCA 67 ; (1949) 80 CLR 229 Dixon J qualified this statement to remove the reference to consumption, following the decision of the Privy Council in Atlantic Smoke Shops Ltd v Conlon [1943] AC 550.) 78 The disjunctive language used in the passages from Ha and Matthews demonstrates that a tax imposed on any one of the steps referred to will qualify as a duty of excise. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . In Anderson's , Barwick CJ said at 364: [T]he judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added.) 82 As Dixon J said in Matthews 60 CLR at 303-304: The basal conception of an excise in the primary sense which the framers of the Constitution are regarded as having adopted is a tax directly affecting commodities. ... The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. (Emphasis added.)
Case: Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353
Outcome: distinguished
The disjunctive language used in the passages from Ha and Matthews demonstrates that a tax imposed on any one of the steps referred to will qualify as a duty of excise. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . In Anderson's , Barwick CJ said at 364: [T]he judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added.) 81 Each of the cases relied on by Caltex involved impugned taxes concerning goods ultimately intended for sale to third party consumers. The question of self-consumption did not arise in any of the cases and I was not referred to any cases in which the conception of a duty of excise had been limited in the manner contended for by Caltex. The Commissioner said that the statement of the Chief Justice in Anderson's 111 CLR 353 was intended to do no more than identify three ways of locating the incidence of an excise duty: the steps of (1) bringing into existence, (2) bringing to a consumable state or (3) passing them down the line to the point of receipt by the consumer. I agree. The passage is consistent with the understanding that an excise may be imposed on discrete steps taking place with respect to goods, without it being necessary that every step take place. The passage does not articulate a principle that excise duties are only those taxes that affect goods destined for consumption by parties other than the original manufacturer or producer. Similarly the emphasis placed by the Full Court in Kithock on the position of consumers was necessary to explain, by way of exclusion, that goods already in circulation amongst consumers cannot be the subject of an excise duty. It is by now clear that consumption taxes are not excises. While it is an essential characteristic of an excise that goods have not yet passed into consumption, I do not accept that it is essential that goods are intended to pass into a market or to be sold to a third party, even though that will be the ordinary occurrence.
Case: Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264
Outcome: distinguished
The disjunctive language used in the passages from Ha and Matthews demonstrates that a tax imposed on any one of the steps referred to will qualify as a duty of excise. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . In Anderson's , Barwick CJ said at 364: [T]he judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added.)
Case: Dennis Hotels Pty Ltd v Victoria [1960] HCA 10 ; (1960) 104 CLR 529
Outcome: applied
Further, Caltex's argument arrives at a position whereby excise duties would be limited to taxes bearing the characteristics of an indirect tax a tax levied on a person with the expectation that that person will not bear the financial burden of the tax but pass it on to another. The indirectness or otherwise of a tax has been rejected as a necessary element of an excise: see Dennis Hotels Pty Ltd v Victoria [1960] HCA 10 ; (1960) 104 CLR 529 ( Dennis Hotels ) at 583, 585 and 590 (Menzies J); see also Ha 189 CLR at 509. The effect of adopting Caltex's position would be to reject the step of manufacture or production as an occasion in itself for the imposition of an excise and necessitate an inquiry into the subjective intentions of the relevant manufacturer. As I have said the cases demonstrate the stand alone nature of each permissible taxation step and it would not be consistent in my view to introduce a limitation focussed on intention. In this connection, I adopt what Menzies J said in Dennis Hotels 104 CLR at 583: I find nothing in the language of the Constitution which would exclude from the categories of duties of customs or duties of excise, duties to be borne as well as paid by the importer or manufacturer. In other words, unless it be by the use of the words "customs" and "excise" themselves, the Constitution does not adopt the distinction between direct and indirect taxes so that, unless the usage of the words otherwise requires, an import duty on goods imported for use or consumption by the importer would be a customs duty, and a duty upon the production of goods for the producer's own use or consumption would be an excise duty, and both would be beyond the power of the Parliament of a State. In my view a thing capable of description as a manufactured good, and consumed or otherwise applied by its manufacturer in that manufacturer's commercial operations, is capable of being the subject of an excise duty.
Case: K &amp; S Lake City Freighters Pty Ltd v Gordon &amp; Gotch Ltd [1985] HCA 48 ; (1985) 157 CLR 309
Outcome: cited
The words must of course be construed in context and by reference to the policies and objectives of the Tariff Act as a whole: K &amp; S Lake City Freighters Pty Ltd v Gordon &amp; Gotch Ltd [1985] HCA 48 ; (1985) 157 CLR 309 at 315 (Mason J); s 15AA Acts Interpretation Act 1901 (Cth). The context here requires a consideration of the processes involved in petroleum production and the effect those processes have on their subject matter crude oil. I do not see any reason however why the ordinary meaning of "refined" ("freed from impurities"; "purified"; "made purer or of finer quality") should not be given to that word as it appears in the Schedule. This is especially so where the refining of petroleum is provided as an example of the ordinary dictionary meaning (see [90] above). 93 When that is done, it follows in my view that none of the residual oils can be said to be "refined" or "semi-refined", for the following reasons. Firstly, they are not themselves freed from impurities or extraneous matter, nor are they purified or clarified. They have not been in any sense made purer or of finer quality. I do not agree that Caltex's other products should be put to one side when characterising the residual oils. A comparison is useful because those other products (kerosene, jet fuel, diesel fuel) are freed from impurities, in that the heavier, less desirable hydrocarbons and the naturally occurring contaminants in the crude oil are separated from the lighter hydrocarbons that make up those products. Those lighter streams are then treated so as to further reduce the level of contaminants and convert them into saleable products. Whereas those products are made purer or of finer quality, the residual oils are essentially the original impurities themselves. 94 Secondly, while it may be correct to say, as the Commissioner suggests, that the residual oils are not impure when considered as discrete goods, this does not mean that they are or have been purified or made finer in quality. The mere fact that they have been produced in a refinery is not sufficient in my view to give them the quality of a "refined" product. Similarly, I do not consider the fact that they have a commercial use makes them a "refined" product. Commercial value or use does not seem to me particularly relevant to whether something should be properly described as "refined".
Case: Philip Morris Ltd v Commissioner of Business Franchises (Victoria) [1989] HCA 38 ; (1989) 167 CLR 399
Outcome: cited
Another way of considering this is by reference to s 61. Section 61 renders all excisable goods "subject to [the Commissioner's] control until delivered for home consumption or for exportation to a place outside Australia, whichever occurs first". The control residing with the Commissioner is of broad scope and is critical for the protection of the Commonwealth's excise revenue: see Lyon [1906] HCA 17 ; 3 CLR 770 and Collector of Customs (New South Wales) v Southern Shipping Co Ltd [1962] HCA 20 ; (1962) 107 CLR 279 ( Southern Shipping ). The section contemplates that excisable goods will be delivered for either home consumption or exportation. In my view the section evinces a legislative intention to cover the field in respect of all forms of internal (home) consumption and all exports. Historically, excise duties have been understood as running together with and supplementary to the customs duties traditionally imposed on certain goods. In Philip Morris Ltd v Commissioner of Business Franchises (Victoria) [1989] HCA 38 ; (1989) 167 CLR 399 at 427, Mason CJ and Deane J approved the following passage from Quick and Garran's Annotated Constitution of the Australian Commonwealth (1901): The fundamental conception of the term [excise] is that of a tax on articles produced or manufactured in a country. In the taxation of such articles of luxury, as spirits, beer, tobacco, and cigars, it has been the practice to place a certain duty on the importation of these articles and a corresponding or reduced duty on similar articles produced or manufactured in the country; and this is the sense in which excise duties have been understood in the Australian colonies, and in which the expression was intended to be used in the Constitution of the Commonwealth.
Case: Danmark Pty Ltd v Commissioner of Taxation (Cth) (1944) 7 ATD 333
Outcome: distinguished
I agree with Ryan J's analysis of s 60(1). This is not a case where the Commissioner would seek to justify a demand by reference to some different, previously unraised, provision (cf. Danmark Pty Ltd v Commissioner of Taxation (Cth) (1944) 7 ATD 333 ; Magna Stic Magnetic Signs Pty Ltd v Commissioner of Taxation (Cth) (1989) 20 ATR 1237). This is a case where the Commissioner has relied, albeit erroneously in part, on two grounds under the same provision. The taxpayer was not under any misapprehension as to the alleged basis for its liability and in my view the demand was valid to the extent that it relied on s 60(1)(a) as a basis for Caltex's liability.
Case: Magna Stic Magnetic Signs Pty Ltd v Commissioner of Taxation (Cth) (1989) 20 ATR 1237
Outcome: distinguished
I agree with Ryan J's analysis of s 60(1). This is not a case where the Commissioner would seek to justify a demand by reference to some different, previously unraised, provision (cf. Danmark Pty Ltd v Commissioner of Taxation (Cth) (1944) 7 ATD 333 ; Magna Stic Magnetic Signs Pty Ltd v Commissioner of Taxation (Cth) (1989) 20 ATR 1237). This is a case where the Commissioner has relied, albeit erroneously in part, on two grounds under the same provision. The taxpayer was not under any misapprehension as to the alleged basis for its liability and in my view the demand was valid to the extent that it relied on s 60(1)(a) as a basis for Caltex's liability.
Case: Peterswald v Bartley [1904] HCA 21 ; (1904) 1 CLR 497
Outcome: cited
Assuming they fall within the Schedule, the impost in this case is levied directly on the residual oils as the "subjects of manufacture" and affects them as commodities in the hands of Caltex. The residual oils are of use to Caltex and serve an economic purpose. Without them Caltex would need to acquire fuel oil from an alternative source at higher cost. The impost is not levied upon the consumption of the residual oils by Caltex. Nor is it a tax on the ownership of the residual oils. It is an excise in the most obvious sense; a tax upon the step of manufacturing or producing a defined good. In my view, to accept the limitation contended for by Caltex would be counter to the trend of the High Court's decision making from the early decision in Peterswald v Bartley [1904] HCA 21 ; (1904) 1 CLR 497 through to Ha [1997] HCA 34 ; 189 CLR 465 , which has been to enlarge the field of permissible steps of taxation in the context of duties of excise.
Case: Revlon Manufacturing Limited v Commissioner of Taxation (1995) 63 FCR 535
Outcome: cited
A similar situation arose in Moama [2001] FCA 1287 ; 115 FCR 205. The Commissioner in that case issued a demand on the basis of s 60(1)(b) only, but sought at the hearing, as an alternative, to validate the demand in reliance on s 60(1)(a). After referring to Revlon Manufacturing Limited v Commissioner of Taxation (1995) 63 FCR 535 and Federal Commissioner of Taxation v Wade [1951] HCA 66 ; (1951) 84 CLR 105 , Ryan J found that the demand could be justified on the basis of s 60(1)(a) , even if s 60(1)(b) had not been available. His Honour stated at [40]: In my view, the amenability of Moama to the issue of a demand under s 60(1) did not depend on the exercise of any power by Customs (other than the issuing of the demand itself). It arose, as Wilcox J said in Revlon out of the operation of the Act itself. There was, accordingly, no scope for Moama to be under any misapprehension as to the basis upon which it was asked to pay duty on the subject fuel.
Case: Federal Commissioner of Taxation v Wade [1951] HCA 66 ; (1951) 84 CLR 105
Outcome: cited
A similar situation arose in Moama [2001] FCA 1287 ; 115 FCR 205. The Commissioner in that case issued a demand on the basis of s 60(1)(b) only, but sought at the hearing, as an alternative, to validate the demand in reliance on s 60(1)(a). After referring to Revlon Manufacturing Limited v Commissioner of Taxation (1995) 63 FCR 535 and Federal Commissioner of Taxation v Wade [1951] HCA 66 ; (1951) 84 CLR 105 , Ryan J found that the demand could be justified on the basis of s 60(1)(a) , even if s 60(1)(b) had not been available. His Honour stated at [40]: In my view, the amenability of Moama to the issue of a demand under s 60(1) did not depend on the exercise of any power by Customs (other than the issuing of the demand itself). It arose, as Wilcox J said in Revlon out of the operation of the Act itself. There was, accordingly, no scope for Moama to be under any misapprehension as to the basis upon which it was asked to pay duty on the subject fuel.
Case: Langston v Langston (1834) 2 Cl &amp; Fin 194 ; 6 ER 1128
Outcome: applied
In any event, even if there is a choice to be made between a construction that gives effect to the demand and one which renders it invalid, I consider that the former should be chosen. Where two constructions of an instrument are equally plausible, upon one of which the instrument is valid, and upon another of which it is invalid, the court should lean towards that construction which validates the instrument: see Langston v Langston [1834] EngR 190 ; (1834) 2 Cl &amp; Fin 194 ; 6 ER 1128 at 1147; In Re Solomon; Solomon v Solomon [1946] VLR 115 at 120-121; Multiplex Constructions (UK) Limited v Honeywell Control Systems Limited (No. 2) [2007] EWHC 447 at [57].
Case: In Re Solomon; Solomon v Solomon [1946] VLR 115
Outcome: applied
In any event, even if there is a choice to be made between a construction that gives effect to the demand and one which renders it invalid, I consider that the former should be chosen. Where two constructions of an instrument are equally plausible, upon one of which the instrument is valid, and upon another of which it is invalid, the court should lean towards that construction which validates the instrument: see Langston v Langston [1834] EngR 190 ; (1834) 2 Cl &amp; Fin 194 ; 6 ER 1128 at 1147; In Re Solomon; Solomon v Solomon [1946] VLR 115 at 120-121; Multiplex Constructions (UK) Limited v Honeywell Control Systems Limited (No. 2) [2007] EWHC 447 at [57].
Case: Multiplex Constructions (UK) Limited v Honeywell Control Systems Limited (No. 2) [2007] EWHC 447
Outcome: applied
In any event, even if there is a choice to be made between a construction that gives effect to the demand and one which renders it invalid, I consider that the former should be chosen. Where two constructions of an instrument are equally plausible, upon one of which the instrument is valid, and upon another of which it is invalid, the court should lean towards that construction which validates the instrument: see Langston v Langston [1834] EngR 190 ; (1834) 2 Cl &amp; Fin 194 ; 6 ER 1128 at 1147; In Re Solomon; Solomon v Solomon [1946] VLR 115 at 120-121; Multiplex Constructions (UK) Limited v Honeywell Control Systems Limited (No. 2) [2007] EWHC 447 at [57].
Case: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29 ; (1998) 194 CLR 355
Outcome: followed
Further, it seems to me doubtful that invalidity would necessarily follow if Caltex's construction of the demand were adopted. By analogy with the approach taken in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29 ; (1998) 194 CLR 355 at [93] , I would ask whether it was a purpose of s 60(1) that to wrongly describe "an amount equal to the amount of the Excise duty which would have been payable ..." as a debt, when it is quite clear what is being demanded and why, should result in invalidity. Caltex did not advance any argument as to why such an error should result in invalidity, whether on a Project Blue Sky approach or otherwise. 172 As I have found the residual oils not to be "refined" or "semi-refined" products, they are not subject to excise duty under item 11 of the Tariff Act. Accordingly the Commissioner's objection decision the subject of the tax appeal must be set aside, together with the demand made by the Commissioner pursuant to s 60(1) of the Excise Act . The Commissioner should pay Caltex's costs of the tax appeal. 173 The s 39B proceeding is in substance dealt with by the result of the tax appeal. But for the agreement referred to at [44] it would have been necessary to fashion orders dealing with the numerous declarations contained in the application. The applicant would have obtained ten of the declarations. The Commissioner would have successfully resisted five other declarations. In the circumstances, the appropriate order is that the proceeding be dismissed and the applicant recover 66 per cent of its costs. I certify that the preceding one hundred and seventy-three (173) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. Associate: Dated: 19 December 2008 Counsel for the Applicant: JW de Wijn QC and FJ Alpins Solicitor for the Applicant: Mallesons Counsel for the Respondent: P Hanks QC, P Sest and R Sallis Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 1, 2 and 3 September 2008 Date of Judgment: 19 December 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1951.html
Case: Abalos v Australian Postal Commission [1990] HCA 47 ; (1990) 171 CLR 167
Outcome: followed
In my view, the Federal Magistrate was entitled to reach the view that he did, and the finding was made after consideration of the cross-examination of the appellant and should not be disturbed: see generally, Abalos v Australian Postal Commission [1990] HCA 47 ; (1990) 171 CLR 167 at 179; Devries v Australian National Railways Commission [1993] HCA 78 ; (1993) 177 CLR 472 ; Fox v Percy [2003] HCA 22 ; (2003) 214 CLR 118 at [26] .