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Thursday, 24 March 1994
Page: 2217


Senator COOK —Earlier in the week on 22 March Senator Watson asked me a question without notice concerning the decision on the CTC Resources No Liability versus the Federal Commissioner for Taxation case. The Treasurer has provided me with an answer which I am happy to read, but it might be more worth while incorporating it. I will provide Senator Watson with a clean copy. I seek leave to incorporate this answer in Hansard.

  Leave granted.

  The answer read as follows—

The decision of the Full Federal Court in CTC Resources No Liability v Federal Commissioner of Taxation supports the legislative framework behind the system of binding rulings on proposed transactions.

The Federal Court has said that the binding rulings system is constitutionally valid.

The decision endorses the legal right of taxpayers to seek binding private rulings on transactions which have yet to be entered into.

The real impact of the decision of the court was that an appeal against the disallowance of an objection to a private ruling was incompetent as the ruling related to an arrangement that had not been implemented before the expiry of the income year in which the arrangement was to have been implemented.

The decision does not amount to a denial of taxpayers' rights in the resolution of disputes. The Court held that, in this case, the taxpayer had no rights to review of the ruling because the proposed arrangements had not been implemented within the timeframe nominated by the taxpayer—that timeframe being a fundamental element of the ruling given to the taxpayer.

The Government accepts the decision of the Federal Court in this case. At this stage the Government does not see any need to amend the law.

The ATO's administrative arrangements are being reviewed in light of the decision to ensure that those processes do not inhibit the ability of taxpayers to seek a review of a ruling on a proposed arrangement.

The ATO understands that the Federal Court is developing special rules for the `fast tracking' of similar appeals.