High Court’s tax guru overturned by the High Court … The final word on tax intricacies … Interests of justice and disclosure of assets … Running balance accounts and curly questions … Government looking for “reliability”

The latest insult from the High Court came in Deputy Commissioner of Taxation v Zu Neng Shi – where Zu didn’t want to disclose details of his assets to the deputy commissioner on the ground of self-incrimination.

The Evidence Act can accomodate a claim of privilege against self-incrimination and in June 2019 Justice Steward, the primary judge in the Federal Court, held that because there were other means by which the tax people could obtain the information they wanted, the “interests of justice” did not require Zu to disclose it.

The Full Court went along wth this, endorsing the view that the interests of justice did not require disclosure.

However, Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ were not dazzled by this thinking, finding that the primary judge and the Full Court took an “irrelevant consideration” into account.

The majority said it was not pertinent for the interest of justice that compliance could be met by obtaining the information by other means.

“No part of the inquiry is to question whether information required to be provided in compliance with that extant disclosure order would more appropriately be obtained through invocation of some other compulsory process.”

In particular, “the primary judge erred in taking into account the possibility of the Deputy Commissioner obtaining information by serving a notice under the Taxation Administration Act 1953 (Cth)“.

Then in March, we had the Saloon’s decision in Commissioner of Taxation v Travelex. This is eye-glazing stuff about running balance accounts under the Taxation Administration Act and whether interest was payable by the commissioner on an amended GST return.

It’s forks-in-the-eyes stuff.

In a decision from February 2020, Kenny and Steward dismissed an appeal by the commissioner from a Wigney decision.

In his separate judgment, Steward said, “it was clear that the taxpayer had paid too much tax; a refund with interest, one might have thought, should have been the correct outcome”.

He went on with observations about the power of the commissioner as to how to allocate credits and debits to a running balance account, adding that the RBA “interest day” is 14 days after the “effective date” of the allocated amount to the balance.

The Saloon thought otherwise, finding that since the tax man and Travelex lacked statutory authority to amend a GST return, no interest was payable by the commissioner to the company under the Taxation (Interest on Overpayments and Early Payments) Act.

And here we were thinking the Steward was the expert who could set the Saloon right on taxation matters.

A field agent has passed on news that former treasurer and chairman of the Nine news and entertainment business, Peter Costello, had mentioned to a colleague over lunch in Melbourne that Steward was appointed to the High Court because the government wanted someone “who is reliable”.