25 Aug 08 Decision Impact Statement - ZolsanThe ATO has published a Decision Impact Statement in relation to the decision of the Supreme Court of New South Wales in Zolsan Pty Limited v DCT (2007) NSWSC 1326; 67 ATR 652. The case concerned the setting aside of a statutory demand which issued for a RBA debt (based on self-assessed GST and assessments following an audit) where the debt amount was disputed, but no objection had been lodged. Young CJ in Eq, relying on the Queensland Court of Appeal decision of Neutral Bay and Others v DCT (2007) QCA 312, held that that, even though there was no objection or review on foot (pursuant to Part IVC of the Taxation Administration Act 1953), this was a GST liability that arose outside of an assessment, and in view of the Neutral Bay case, the chance that the debt could be successfully challenged at law was not "feeble or non-existent." Therefore the statutory demand should be set aside under the Corporations Act. The Commissioner has appealed to the High Court in the Neutral Bay case and thus disagrees with Young CJ in Eq's decision. However, the Commissioner advises that he did not proceed with an appeal in Zolsan because the substantive matter giving rise to the GST liability was settled.
For a copy of the Decision Impact Statement, go here