Denver Chemical Manufacturing Co v Commissioner of Taxation [1949] HCA 25

Denver Chemical Manufacturing Co v Commissioner of Taxation [1949] HCA 25

The Board of Appeal lawfully formed the opinion that the taxpayer's omission of interstate sales and withholding of the change in its returns amounted to avoidance of tax due to evasion, and no error of law appeared in that discretionary conclusion. Once evasion removed the time bar under s. 210 (2) (a), the Commissioner was not confined to correcting the omitted sales on the prior percentage basis but could amend the assessments to assess the taxpayer's true taxable income on ordinary principles. The appeal therefore failed.

Jurisdiction
Australia
Procedural Posture
Income Tax Appeal / Appeal to the High Court From the Supreme Court of New South Wales, Which Had Confirmed the Board of Appeal's Decision Confirming Amended Assessments
Outcome
Appeal dismissed.
Legal Topics
['income Tax Assessments' 'amended Assessments' 'avoidance of Tax' 'evasion' 'discretionary Powers' 'judicial Review of Board of Appeal Opinion']
['taxation Law' 'administrative Law'] ['income Tax Assessments' 'amended Assessments' 'avoidance of Tax' 'evasion' 'discretionary Powers' 'judicial Review of Board of Appeal Opinion']

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Procedural Posture

Income Tax Appeal / Appeal to the High Court From the Supreme Court of New South Wales, Which Had Confirmed the Board of Appeal's Decision Confirming Amended Assessments

Legal Issues

  1. 1 ["Whether the Board of Appeal's conclusion that there had been an avoidance of tax due to evasion was open to review by the Supreme Court and the High Court as a question of fact or only on legal grounds concerning the exercise of discretion." 'Whether the Board of Appeal had lawfully formed the opinion that the avoidance of tax was due to evasion under s. 210 (2) (a) of the Income Tax (Management) Act 1936.' 'Whether, once fraud or evasion removed the time bar, the Commissioner could amend the assessments by abandoning the former percentage-of-sales basis and assessing taxable income on ordinary accounting principles.' 'Whether the Commissioner was bound by any earlier opinion or basis of assessment said to arise under s. 18 of the Income Tax (Management) Act 1912 or ss. 25 or 27 of the Income Tax (Management) Act 1928.']

Ratio Decidendi

The Board of Appeal lawfully formed the opinion that the taxpayer's omission of interstate sales and withholding of the change in its returns amounted to avoidance of tax due to evasion, and no error of law appeared in that discretionary conclusion. Once evasion removed the time bar under s. 210 (2) (a), the Commissioner was not confined to correcting the omitted sales on the prior percentage basis but could amend the assessments to assess the taxpayer's true taxable income on ordinary principles. The appeal therefore failed.

Court Disposition

Appeal dismissed.

Orders

  • ['Appeal dismissed.']