The case concerned a Director Penalty Notices (DPN) issued under former s 222AOE of ITAA 1936, specifically whether the DPN had been validated by Schedule 7 of the Tax Laws Amendment Measures (No 7) Act 2011 (the Amendment Act) and whether there was a requirement to issue a new notice pursuant to s 269-25 of Schedule 1 to the Taxation Administration Act 1953 (TAA).
The NSW Court of Appeal (constituted by 5 judges) unanimously held that:
- The Amendment Act operated to validate a notice issued under former s 222AOE of the ITAA 1936 which, but for the Amendment Act, may otherwise have been invalid.
- The effect of Items 64 and 65 of the transitional provisions was not such to require a new notice to be issued under s 269-25 in Schedule 1 to the TAA when a notice had previously issued under former section 222AOE of the ITAA 1936.
Special leave to appeal was refused by the High Court.
The ATO states that the decision of the NSW Court of Appeal is consistent with the Commissioner's view and current procedures.