Federal Commissioner of Taxation v Rochester [1934] HCA 17

OF AUSTRALIA.

(HIGH COURT OF AUSTRALIA.]

THE FEDERAL COMMISSIONER OF TAXATION

AND

ROCHESTER Sh > She

PLAINTIFF ;

Drrenpant.

Sales Tax—Fish and «chips"—" Production" —* Manufacture" —Sales Tax ¥. ©, op A. Assessment Act (No. 1) 1930-1931 (No. 25 of 1930—No. 25 of 1931), sec. 3*—

Sales Tax Assessment Act (No. 1) 1932 (No. 39 of 1932),

sec, 2*,

The Federal Commissioner of Taxation brought an action against the defendant to recover money alleged to be payable as sales tax upon sales by the defendant of cooked fish and "chips."

Held that by preparing and cooking the fish and "chips" the defendant

had neither produced nor manufactured goods within the meaning of the Sales Tax Assessment Acts, and accordingly that no tax was payable by the

defendant.

Demurrer.

The Federal Commissioner of Taxation brought an action in the High Court against G. M. Rochester to recover £269 alleged to be payable as sales tax upon the sales of cooked fish and " chips" at the defendant's fish and oyster saloon. The defendant demurred, and the demurrer was referred to the Full Court of the High Court.

*The Sales Tax Assessment Act (Wo. 1) 1930-1931 provides, by sec. 3, that "manufacture" includes produe- tion; "manufactured" includes pro- duced ; and " manufacturer" means a person who engages, whether exclu- sively or not, in the manufacture of goods. The' Sales Tax Assessment Act (No. 1) 1932, sec. 2 (a), amends sec. 3 of the Act of 1930-1931 by omitting the definitions of 'manu- facture' and 'manufactured' and inserting in their stead the following

definitions :—" ¢ Manufacture ' includes production, and also the combination of parts or ingredients whereby an article or substance is formed which is commercially distinct from those parts or ingredients, except such combina- tion as, in the opinion of the Commis- sioner, is customary or reasonably practicable for users or consumers of those articles or substances to under- take; 'Manufactured' has a meaning corresponding to that of ' Manu-

facture '."

1934,

= MELBOURNE,

June 7. Rich, Starke, Dixon, Evatt

and Mefiernan

H.C. or A.

1934, Ww

FEDERAL Commis- SIONER OF TAaXaqIoN " RocueEsTEr.

HIGH COURT

McDonald, for the defendant, in support of the demurrer, goods were neither produced nor manufactured within the m of the Sales Taw Assessment Act (No. 1) 1930-1931, sec. 3, or of Sales Tax Assessment Act (No. 1) 1932, sec. 2. [He was stopped.)

in this case has not only to cook the fish, but has to prepare it cooking. " Manufacture " as defined in the Act is wide enough to cover this business. "Goods" includes commodities, and question is, does the taxpayer produce a commodity, that is a separate commodity, so far as commerce is concerned, from the raw material ? (In ve Searls Ltd. (1) ).

[Ricu J. referred to Adams v. Rau (2).] ¥

The definition of " manufacture " was altered by Act No. 39 of 1932 and the defendant is taxable after such amendment, even if he is not liable in respect of any prior period.

The following judgments were delivered :—

Ricu J. In my opinion these goods are neither manufact nor produced, and I think the demurrer should be allowed judgment entered for the defendant.

Srarke J. The definition in neither of the Acts extends to the case of fish or potatoes that have simply been cooked.

Dixon J. I agree. I think that in the interpretation of thi very difficult provisions there is no safe guide but the common of English terms. To attempt some logical analysis of the concep-

found to constitute these conceptions, although it would not ordinarily be described by the words " manufacture " or " production," ml lead to results which do not represent the true interpretation of Act. It may be difficult to distinguish one process by which thi are constructed, obtained, prepared, or altered in condition ft

(1) (1932) 33 S.R. (N.S.W.) 7; 49 2) (1 LR. ¢ pp. 577 NS.W.W.N. 195. dink gf2) (1981) 40 CLR. 572, at pp

50 C.L.R.] OF AUSTRALIA.

another, but if we follow the method laid down in Adams v. Rau (1) and Irving v. Munro & Sons Ltd. (2) and simply apply the terms used in the Act as they are ordinarily applied in English speech, I think that it is inevitable that this demurrer should be allowed. It

seems to me an odd and inappropriate use of terms to describe cooked fish as either produced or manufactured. In the same way, I think the use of oil or grease and condiments in cooking fish cannot be described properly as a " combination of parts or ingredients " producing " an article or substance commercially distinct from those parts or ingredients " within the new definition of " manufacture."

Evatt J. In view of the decision in Adams v. Rau (1) I agree

that in this case there is neither the manufacture nor the production of a commodity.

McTiernan J. I agree.

Demurrer allowed.

Solicitor for the plaintiff, W. H. Sharwood, Crown Solicitor for the Commonwealth.

Solicitor for the defendant, L. McL. White.

H. DaW- (1) (1931) 46 C.L.R. 572, (2) (1931) 46 C.L.R. 279.

H. C. or A.

1934. Ww

FEDERAL Commis. SIONER OF TAXATION v. RocHESTER.

Dixon J.