Case: Syngenta Crop Protection Pty Ltd &amp; Anor v Commissioner of Taxation (2005) 61 ATR 186
Outcome: followed
Recently in Syngenta Crop Protection Pty Ltd &amp; Anor v Commissioner of Taxation (2005) 61 ATR 186 (" Syngenta "), a case in which the taxpayer also sought particulars of the kind sought here, Gyles J observed (at 188): "I do not propose to track through all the authorities or endeavour to reconcile all of the statements in them on the topic. Such statements are not always easy to reconcile, partly because appeals cover many situations." I agree with the second sentence, although I will refer below, in chronological order, to those authorities which seem to me to be the most important. 42 Two matters should be noted at the outset: 1. Subsection 177(1) of the ITAA expressly recognises a distinction between reviews or appeals under Pt IVC of the TAA and other proceedings, in relation to the conclusive evidence of the due making of an assessment that is provided by production of a notice of the assessment. The reason is that s 14ZZO within Pt IVC contemplates that if an assessment is excessive, the taxpayer should, in a proceeding under that part, have the opportunity of proving that it is. The tension between s 177(1) of the ITAA on the one hand, and s 14ZZO(b) of the TAA (or its predecessor, s 190(b) of the ITAA) on the other hand, permeates the cases. 2. It will prove to be important to identify precisely the conditions of tax liability specified in the ITAA, and to distinguish between provisions referring to the Commissioner's state of mind, eg his "opinion", or his being "satisfied" or "not satisfied", on the one hand, and provisions referring to his taking a step, such as making a "determination" or "decision" on the other hand. I will refer to them as "state of mind" and "Commissioner's determination" classes of cases, respectively. 146 Finally, in Syngenta , Gyles J dismissed a taxpayer's motion for discovery and particulars in circumstances substantially identical to those of the present case. For reasons given by his Honour, he delivered an ex tempore judgment. 147 Gyles J considered that an appeal to the Court assumed the existence of a valid assessment, and raised only the question whether the amount of it was excessive. This, in turn, his Honour said, involved only one issue: whether or not the actual consideration was an arm's length consideration as defined in s 136AA (see [8] above). His Honour remarked that this is an objective question, and that the Commissioner's opinion concerning it is not probative evidence in respect of it. I respectfully agree (cf Gummow J's treatment of the first separate question in Jackson ). 153 The first reason why the Commissioner should not be required to supply the particulars sought relates to the Commissioner's primary and more general submission. I hold, in accordance with Peabody, Sleight and Syngenta , that the Commissioner should not be required to supply the particulars sought because, under the statutory provisions mentioned, it is not open to the Taxpayers to make the Commissioner's state of mind and reasoning processes leading to the making of the determinations under s 136AD an issue in the appeals. My reasoning in this respect is found largely in my discussion of Sleight and Syngenta at [136] [150], and in particular, [144] above. 154 The position established by Peabody (see [119] above), Sleight (see [136] [145] above), and Syngenta (see [146] [150] above) seems to be that a distinction is to be drawn between cases in which the ITAA specifies a state of mind on which the assessment of the amount of taxable income (and tax) depends (cf Avon Downs , George , Giris , Duggan , Brian Hatch , Kolotex , WA Capital , Dalco ), and those in which it specifies, not a state of mind, but the making of a determination, as the event on which the amount of taxable income (and tax) depends (cf Jackson , Peabody , Richard Walter , Binetter, Sleight , Syngenta ). In the latter class of case, the legislature is taken to indicate that the interaction between s 177(1) of the ITAA and s 14ZZO(b) of the TAA produces the result that the Commissioner's state of mind, on the basis of which the determination was made, is part of the due making of the assessment, and cannot be put in issue by the taxpayer.