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Taxation Commissioner now able to deny natural justice

Publication date: 19 Jun 97 | Source: THE TAX INSTITUTE

The Federal Court held today that the Commissioner of Taxation could stop an independent review of the merits of an income tax assessment because the taxpayer was bankrupt.

In a strong dissenting judgement, Justice Hill criticised the majority view of Justices Lehane and Whitlam as unjust.

According to the Taxation Institute of Australia President, Mr Richard Gelski, the consequence of this decision is that the Commissioner of Taxation now has powers not only to bankrupt a taxpayer but in consequence ensure that the bankrupt could not challenge the assessment. Although it seems that the Trustee in Bankruptcy might have the right to appeal, the Trustee will seldom have any funds or inclination to do so.

Mr Gelski called upon the Attorney-General to ensure that the law is changed immediately.

"It is a dangerous precedent to confer such power upon the Commissioner," Mr Gelski said.

"The decisions of the Commissioner of Taxation must be open to challenge by a taxpayer at all times. This confirms the Institute's reasons for seeking legislative foundation for a taxpayer's charter of rights."