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21 Aug 14 Special leave refused in amended assessment recovery case - Chemical Trustee

The High Court (French CJ and Keane J) has refused the taxpayer's application for special leave to appeal from the decision of the Full Court of the Federal Court in Chemical Trustee Limited v DFCT [2014] FCAFC 27 (19 March 2014).

In refusing leave, French CJ said as follows:

"The applicant [taxpayer] seeks special leave to appeal from a decision of the Full Court of the Federal Court of Australia dismissing an appeal from a judgment against the applicant in favour of the Deputy Commissioner of Taxation in an amount of approximately $28.6 million in respect of the income years 2002 to 2007 inclusive and 2008 to 2011. The judgment was based upon amended assessments issued by the Deputy Commissioner of Taxation in July and September 2012. Prior to the proceedings giving rise to the judgment in question, the Deputy Commissioner had obtained a judgment for approximately $4.8 million based upon earlier default assessments for the income years 2001 to 2004, 2006 and 2007.

The primary judge and the Full Court rejected an argument by the applicant that the Deputy Commissioner’s rights in respect of the years 2002, 2003, 2004, 2006 and 2007 had merged in the first judgment supporting a plea of res judicata or that the Deputy Commissioner was otherwise precluded by doctrines of issue estoppel and abuse of process from recovery in respect of those income years.

In our opinion, the primary judge and the Full Court were right to reject that argument. The case is not covered by what was said in Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1998) 164 CLR 502. The action before Justice Perram was based upon additional income tax payable pursuant to amended assessments by the operation of the Income Tax Assessment Act 1936 (Cth) and Income Tax Assessment Act 1997 (Cth) which gave rise to the cause of action invoked in the proceedings. Also antithetical to the applicant’s contention was the very existence of the statutory scheme for amended assessments. There was no basis, in our opinion, for the application of res judicata, issue estoppel or abuse of process arguments. Special leave is refused with costs."

For a copy of the transcript of the application for special leave, go here


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