Case: Federal Commissioner of Taxation v Rochester [1934] HCA 17 ; (1934) 50 CLR 225
Outcome: distinguished
For completeness, I should further record that attention was also drawn to Federal Commissioner of Taxation v Rochester [1934] HCA 17 ; (1934) 50 CLR 225, which related to precursor sales tax legislation, and where it was held that by preparing and cooking fish and chips, the defendant taxpayer had neither produced nor manufactured goods. In that earlier statutory context, manufacture was defined non-exclusively to include 'production and also the combination of parts or ingredients,... except such combination as... is customary or reasonably practical for users or customers of those articles or substances to undertake' . The statutory formula there prevailing is somewhat removed from the notion of applying a process or treatment to goods formulated in subItem 18(5). Each case must of course be considered in the light of its contextual circumstances, and that the retail example derived from Rochester was conceptually removed to my mind from that here subject to consideration. 66 Lindsay submitted in summary in relation to the Item 36 issue as follows: (i) the relevant goods were used mainly (being of course the Item 18(1) expression) in refrigerating temperature-sensitive goods; (ii) refrigeration is a process or treatment which was applied to temperature-sensitive goods ( process or treatment to goods being an element in each of pars (a), (b) and (c) of the subItem 18(5) meaning of manufacture-related activity ); and (iii) the refrigeration was 'for the purpose of... keeping [temperature-sensitive goods] in the form or condition in which they [were] to be marketed [or otherwise] used by... the... manufacturer of the goods', within the scope of subItem 18(5)(c). 67 Upon that footing it was concluded by Lindsay that the relevant goods were each used by Lindsay 'mainly in carrying out... a manufacture-related activity... in the course of a business' within subItem 18(1)(a) of Schedule 1 to the STEC Act, and thus involved the 'use [of] [g]oods... mainly in carrying out one or more activities described in subItem (1) of exemption Item 18... on behalf of one or more other persons (the principals)...' within subItem 36(1) of Schedule 1. As a consequence, so Lindsay further submitted, the goods qualified for sales tax exemption under subItem 36(1), provided that the condition in Item 36(2), which relates to 'use by the principal concerned mainly in carrying out the countable activity at the place at which the activity is to be carried out by the exemption user...' was satisfied. In that regard, it was Lindsay's case that subItem 36(2) 'will be satisfied as long as the relevant goods (or any of them) would be covered by subItem 18(1) and if the applicant's principals used the goods [ mainly ] in carrying out the same [ countable ] activities for instance the subject of Item 18, and further that 'the relevant goods will be covered by subItem 18(1) unless they are excluded either as a general-purpose road vehicle by subItem 18(3)(b) or by section 13 of the STEC Act'. I have of course earlier reproduced s 13, which is headed Lower level operation of excluded property. Item 36(1) requires for its operation that '... either the condition in subitem (2) of this Item or the conditions in subitem (3) of this Item must be met for each activity (countable activity) that is relied on to establish that this subitem applies' , and in the present circumstances, subItem 36(2) uses the more conceptually apposite expression place , and subItem 36(3) uses the perhaps less apposite expression premises . 68 The issues falling for resolution are of course complex, in relation to which both parties provided comprehensive written submissions by way of analysis of the legislation, judicial authority and the evidence tendered to the Tribunal below. In the course of presentation of the respective cases of the parties to the Federal Court, Lindsay appears to have chartered additions and modifications at least of detail to its case presented to the Tribunal below, a course which is perhaps understandable given the complexity and detail of the prospectively or conceivably relevant provisions of the STEC Act, and in particular of the extensive Schedule 1 thereto. In the context of a statutory appeal by way of review of administrative decision-making, an appellant tends to take the opportunity to vary, modify or refine the emphasis and scope of its case conducted earlier at first instance in an administrative tribunal below, and I think that the present application by way of statutory appeal has adopted that course to some extent. 69 Lindsay's contextual foundation for the relief invoked on the present appeal was of course its operations of road haulage and freight transportation which were undertaken as a subcontractor for principals whose business operations involved the production of fresh primary products, and the subsequent merchandising thereof at distant markets in that condition. In relation to the first of the five issues tendered by Lindsay for resolution on the appeal (being the issues set out in [5] of these reasons for judgment), Item 36 of Schedule 1 to the STEC Act was primarily invoked by Lindsay, and so invoked in its capacity as a transport subcontractor of those primary products. It was in relation to its capacity as a haulage subcontractor that Lindsay has sought to establish its fiscal status as an exemption user under the STEC Act, and hence within the scope more specifically of its activities in relation to exemption Items the subject of Schedule 1 to the STEC Act, and to do so in particular in respect of a countable activity within the scope of Item 36 headed Subcontractors .