His Honour held that "the relevant going concern was the total subject matter of both contracts, because the business or enterprise of a hotel cannot be conducted without land from which to conduct it." His Honour so found despite the fact that the parties had only agreed in the contract for the purchase of the business that the sale of the business was the sale of a going concern. In contrast, the contract for the purchase of the land and improvements stated only that "the Purchase Price does not include GST".
His Honour rejected the purchaser's argument that there were 2 contracts which, although providing for simultaneous settlement, were separate, and that the provision in the business sale contract operated only with respect to the subject-matter of that contract and accordingly excluded the land sale, entitling it to claim input tax credits in respect of the purchase of the land.
His Honour said at para 24:
"The present enterprise is the business of the hotel. It is attached to land. The parties intended that the supply would be of the business carried on where it was conducted at the time of the sale. The [purchaser] correctly conceded that the land was one of the things necessary for the continued operation of the hotel business...The relevant going concern for the purposes of the GST Act was accordingly the business and the land on which it was situated. The phrase "going concern" might have an alternative meaning in a different context but that was its meaning in the present circumstances for the purpose of the GST Act."
Debonne Holdings Pty Ltd and FCT  AATA 886 (AAT, Downes J, President, 19 October 2006).
For a copy of the decision, go here