Taxation Ruling IT 2095 (Addendum exists) - Income tax : assessability of unbilled gas



Ruling: 6. The High Court's comments make it clear that the Court considered that the case was one which turned on its own facts. The decision of the Federal Court does not establish any new or different principles in relation to the timing of derivation of income. The Court's decision will only have application to utility companies, such as the taxpayers, whose operations are controlled by legislation which prohibts recovery of debts until an account for the gas supplied has been rendered. COMMISSIONER OF TAXATION 10 AUGUST 1984




View the Addendum notice for this document. | Following the judgment of the Federal Court of Australia in FCT v. Australian Gas Light Company & Anor, reported at 83 ATC 4800, (1983) 15 ATR 105, the Commissioner sought special leave of the High Court of Australia to appeal to that Court. The High Court, on 6 April 1984, refused the Commissioner's application. | 2. The question at issue was whether the taxpayers' utility companies were assessable on the value of "unbilled gas" as at 30 June of the relevant years. "Unbilled gas" is gas which has been supplied by the taxpayers and consumed by customers but for which no account has been rendered to the customers. | 3. In a joint judgment the Federal Court (Bowen C.J. Fisher and Lockhart JJ.) affirmed the earlier decision of the Supreme Court of New South Wales (Lusher J.) that in each of the relevant years of income the value of unbilled gas as at 30 June was not assessable income of that year of income within the terms of sub-section 25(1) of the Act. | 4. In reaching this conclusion, the Court applied two tests: viz | "42(1) A demand for payment for gas supplied shall not be made by a gas company or an officer of a gas company until an account therefor has been rendered". | 5. In refusing the Commissioner's application for special leave to appeal against this decision, the High Court took the view that the case involved the application to particular facts of principles which are settled and that the case was not an appropriate one for the grant of special leave. | Date of effect: Immediate | Date original memo issued: 9 May 1984


Legislative references: 25(1)
Case references: FCT v. Australian Gas Light Company & Anor 83 ATC 4800 (1983) 15 ATR 105
Subject references: ASSESSABLE INCOME - UNBILLED GAS INCOME DERIVED - UNBILLED GAS