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Wednesday, 20 May 1936

Senator DUNCAN-HUGHES (South Australia) . - Several years ago 1 raised this matter in relation to some minor taxing bill. I expressed the view, which is not in any way extreme, that if it is incumbent upon the taxpayer to pay his tax when assessed, it should be equally incumbent upon the Commissioner to refund any over-assessment, which is admitted by him to be such. The Minister then in charge of the bill (Senator Brennan) explained that the word " may " was mandatory, and had been held to be so by the courts ; for that reason there was no necessity to stipulate " shall " in lieu of " may ". In view of the fact that this is the bill under which income tax, which is the principal form of direct taxation, is levied in Australia, I see no reason why the word " may " should persist in this clause. In drawing attention to this matter I am actuated only by a desire to see that equal justice is rendered to both parties. If honorable senators study the bill they will find that section after section contains the phraseology the taxpayer " shall " do this or that. If it is clear, on the Commissioner's own admission, that the excess of tax is repayable, the clause should read that it "shall" be repaid. That is only just.

Senator A.J. McLACHLAN (South

Australia - Postmaster-General) [9.43] . - The honorable senator is quite correct in stating that compulsion embodied in the word " shall ", is employed against the taxpayer, while it is not employed where the Commissioner is concerned. There is a reason for the adoption of this language in relation to what is a clear liability on the part of the Commissioner. The amendment of the assessment reduced the liability of the taxpayer. Money has been paid by him in excess of what ought to have been paid, and an action lies against the Commissioner for the recovery of it. The view expressed by the Crown Law authorities is that if the word " shall " is inserted in reference to the Commissioner in a taxing measure such as this he is obliged to refund the money without the right of any set-off. In the majority of contentious cases the Commissioner has other claims against the taxpayer. That is why there is a statutory obligation on the taxpayer, but not on the Commissioner. The provision has been so worded in order to make sure that the Crown gets the money which may be owing to it on some other account of the taxpayer.

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