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Wednesday, 11 November 1964

Senator HENTY (Tasmania) (Minister for Civil Aviation) .- The Parliamentary Draftsman advises that the amendment, if accepted, would give a right of appeal to a court in respect of every exercise of discretion by the Commissioner or a Board of Review under the Bill. If the court found that the discretion had been exercised on any ground other than one relating to intent to evade income tax, the decision would be invalid. It must be presumed, although the proposed new clause is not clear on this point, that the reference to the exercise of a discretion is intended to include a refusal to exercise a discretion, where the discretion operates in favour of the taxpayer.

Apart from other considerations, the proposed clause is 'considered to be misconceived for the reason that there are a number of discretions under the Bill that are not directly related to the question of evading income tax, but are necessary to give the Act sufficient flexibility to meet the circumstances of individual cases. For example under sub-section (4.) of proposed new section 26ab, if a taxpayer who has granted a lease satisfies the Commissioner that he reasonably believed that the lessee intended to use the property for producing assessable income, and that therefore a premium which the taxpayer accepted would not be taxable, the Commissioner may treat the premium as not taxable. Here there is no question of evasion of tax, but merely a question of doing justice to a taxpayer who. accepted a premium as non-taxable, but was deceived by the lessee. If the Commissioner refused to exercise this discretion in favour of the taxpayer, and under Senator Wright's amendment the taxpayer appealed to a court, the court would be called on to deter mine the case by considering the entirely irrelevant question of intention to evade tax. A number of other examples could be given, but what I have said should be sufficient to make the point.

My officers advise me that the amount of work of a non-judicial nature would be unmanageable for courts as we now know them. It would delay finality. Successive governments since the inception of Commonwealth income tax law have found it inappropriate to vest in . and burden courts of law with the function - a non-judical one - of sitting in judgement on the Commissioners opinion on a factual situation. Should the Commissioner, or a Board of Review, form an opinion capriciously, or on irrelevant evidence, the court under the existing law may be asked to set aside the opinion so formed. The Government cannot accept the amendment.

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