Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Evans v Deputy Commissioner of Taxation [2012] NSWCA 396
• Hearing dates: 8 October 2012
• Decision date: 30 November 2012
• Before: Macfarlan JA at [1]; Tobias AJA at [2]; Gzell J at [3]

Decision

(1) The appeal is allowed;

(2) The verdict and judgment made by Williams DCJ on 25 November 2011 is set aside;

(3) Order that there be a new trial;

(4) Order that the costs of the first trial be in the discretion of the judge hearing the new trial;

(5) Order the respondent to pay to the appellant the amount of out-of-pocket expenses, of a type that would have been recoverable as disbursements if the appellant had been legally represented, that the appellant has actually and reasonably incurred concerning the present appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: TAXES AND DUTIES - Running Balance Account (RBA) established in relation to appellant under Taxation Administration Act 1953 (Cth) (Administration Act), s 8AAZC - debit balance an RBA deficit debt payable to Commonwealth under Administration Act s 8AAZH - appellants defence alleged errors in entries in RBA - some errors not defence issues as entitled to object and contest adverse objection decision in Federal Court or Administrative Appeals Tribunal (AAT) - Part IVC of Administration Act an exclusive code - other errors not subject of right to object and not open to Federal Court or AAT - with lack of assistance from respondent, trial judge did not determine detailed arguments of appellant that entries in RBA wrong
• Legislation Cited: A New Tax System (Goods and Services Tax) Act 1999 (Cth); Taxation Administration Act 1953 (Cth)
• Cases Cited: Deputy Commissioner of Taxation v TDE Nominees Pty Ltd (No 2) [2011] NSWSC 1528
• Category: Principal judgment
• Parties: Peter Ronald Evans (Appellant); Deputy Commissioner of Taxation (Respondent)
• Representation: Counsel: In person (Appellant); D Jay (Respondent); Solicitors: ATO Legal Services Branch (Respondent)
• File Number(s): CA 2011/252163

Decision under appeal

• Jurisdiction: 9101
• Date of Decision: 2011-11-25 00:00:00
• Before: Williams DCJ
• File Number(s): 2010/252163

Judgment

1 MACFARLAN JA: I agree with Gzell J.

2 TOBIAS AJA: I agree with Gzell J.

3 GZELL J: A Deputy Commissioner of Taxation sued Peter Ronald Evans for a tax liability due to the Commonwealth. Williams DCJ entered judgment for the Deputy Commissioner in the amount of $499,366.55 plus costs. From that judgment Mr Evans appeals to this Court.

4 The Taxation Administration Act 1953 (Cth) (Administration Act), s 8AAZC provides that the Commissioner may establish one or more systems of accounts for primary tax debts, each of which is to be known as a Running Balance Account (RBA). A number of RBAs were established with respect to Mr Evans.

5 Under A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act), s 31-5 a person registered or required to be registered under that Act must give to the Commissioner a GST return for each tax period. Due dates for the return are specified in s 31-8.

6 The approved form of return is the Business Activity Statement (BAS). It brings together in the one form the reporting of the entitlements and obligations under the GST Act, the PAYG system of instalments (PAYG Instalments), the PAYG withholding from wages of employees (PAYG Withholdings) and a number of other reporting obligations not relevant for present purposes.

7 Each of the reported liabilities is an amount due to the Commonwealth under a taxation law. They are thus primary tax debts for the purposes of s 8AAZC of the Administration Act because that term is defined in s 8AAZA to mean any amount due to the Commonwealth directly under a taxation law.

8 One of the RBAs established with respect to Mr Evans related to his BAS associated debits and credits (BAS RBA).

9 An RBA deficit debt is defined in s 8AAZA of the Administration Act to mean a balance in favour of the Commissioner based on primary tax debts that have been allocated to the RBA and that are currently payable, and payments made in respect of current or anticipated primary tax debts of the entity and credits to which the entity is entitled under a taxation law that have been allocated to the RBA.

10 If there is an RBA deficit debt at the end of a day, the tax debtor is liable to pay the Commonwealth that amount under s 8AAZH of the Administration Act.

11 Another consequence of a balance of an RBA in favour of the Commissioner is the imposition of the general interest charge (GIC). Section 8AAZF of the Administration Act provides that if there is an RBA deficit debt at the end of a day, the GIC is payable by the tax debtor on that RBA deficit debt for that day and the balance of the RBA is altered in the Commissioner's favour by the amount of the GIC. From time to time the GIC was raised in Mr Evans' BAS RBA.

12 In like manner, an administrative penalty was, from time to time, debited to Mr Evans' BAS RBA for late lodgement of BAS forms. Section 286-75(1) in Schedule 1 to the Administration Act provides that a person is liable to an administrative penalty if required under a taxation law to give a return to the Commissioner by a particular day and the return is not given by that day. The amount of the penalty is worked out under s 286-80.

13 Mr Evans lodged with the Australian Taxation Office (ATO) BAS forms in which he had made handwritten entries. Kalliani Sreedharan, the case officer, affirmed an affidavit in which she explained that in most cases BAS forms are scanned and stored in electronic format on a computer system called the Instalment Processing System (IPS). In other cases the information shown on the BAS form is manually keyed into the IPS. Where the BAS form has been scanned, a copy of it can be printed from the Image Viewer screen. Where the information has been keyed in, details can be printed from the View and Print Business Activity Statement screen.

14 Ms Sreedharan annexed to her affidavit details from Mr Evans' BAS RBA from 1 April 2001 to 30 June 2009. Each document was printed from the View and Print Business Activity Statement screen indicating that the information from the BAS forms lodged by Mr Evans had been manually keyed into the IPS.

15 The Administration Act s 8AAZG provides that the Commissioner may at any time prepare a statement for an RBA, containing such particulars as the Commissioner determines.

16 Section 8AAZI provides as follows:

"(1) The production of an RBA statement:

(a) is prima facie evidence that the RBA was duly kept; and

(b) is prima facie evidence that the amounts and particulars in the statement are correct.

(2) In this section:

RBA statement includes a document that purports to be a copy of an RBA statement and is signed by the Commissioner or a delegate of the Commissioner or by a Second Commissioner or Deputy Commissioner."

17 Ms Sreedharan annexed to her affidavit an unsigned copy of the RBA statement of Mr Evans' BAS RBA (BAS RBA statement) showing its debits and credits, its running balance and the then amount of the RBA deficit debt. Since the copy was unsigned, it lacked the benefit of s 8AAZI of the Administration Act.

18 Section 8AAZJ of the Administration Act is in the following terms:

"(1) In proceedings for recovery of an RBA deficit debt, a Commissioner's certificate stating any of the following matters in respect of a specified RBA is prima facie evidence of those matters:

(a) that no tax debts (other than general interest charge on the RBA deficit debt) were allocated to the RBA after the balance date shown on a specified RBA statement for the RBA;

(b) that general interest charge is payable on the RBA deficit debt, as specified in the certificate;

(c) that payments and credits were allocated to the RBA as specified in the certificate;

(d) that a specified amount was the RBA deficit debt on the date of the certificate.

(2) In this section:

Commissioner's certificate means a certificate signed by the Commissioner or a delegate of the Commissioner, or by a Second Commissioner or Deputy Commissioner."

19 Ms Sreedharan annexed to her affidavit a certificate signed by a Deputy Commissioner certifying that no tax debts other than the GIC on the RBA deficit debt were allocated to the BAS RBA after the balance date, said to be 23 July 2020 and said to be the date of the issue of the statement of claim in these proceedings. It certified that credits of $29,858.21 had been allocated to the BAS RBA since 23 July 2010. And it certified that as at 13 January 2011 the BAS RBA deficit debt owed by Mr Evans was $450,555.69. 13 January 2011 was the date Ms Sreedharan affirmed her affidavit, the date of the certificate and the balance date of the BAS RBA statement.

20 The reference to 23 July 2020 was obviously an error. But so, too, might 23 July 2010 be, for the statement of claim, while dated 23 July 2010, was filed on 29 July 2010.

21 Mr Evans swore an affidavit in which he complained that the RBA deficit debt was excessive because of alleged errors in entries, or the lack of them, that he specified. I will return to these alleged errors in due course.

22 Ms Sreedharan affirmed a second affidavit correcting an error in her table of GST liabilities in her first affidavit. A deal of the statement of claim and Ms Sreedharan's first affidavit were devoted to a claim for a superannuation guarantee charge deficit. In her second affidavit, Ms Sreedharan said that her review of the ATO records revealed that a judgment in favour of the Deputy Commissioner in July 2003 included the superannuation guarantee charge deficit and in those circumstances the Deputy Commissioner did not press any claim to recover the same debt in the current proceedings.

23 Ms Sreedharan said that the records of the ATO showed that a Deputy Commissioner had obtained judgment against Mr Evans in respect of another RBA deficit debt in the amount of $117,377.13 on 20 October 2005. She annexed an unsigned copy of the RBA statement with respect to that account. It lacked the benefit of s 8AAZI of the Administration Act.

24 While a judgment debt may have been charged to an RBA in respect to Mr Evans, the $117,377.13 entry is demonstrably not a recording of a judgment debt. The RBA statement commenced with a credit of $7,617 on 13 November 2000. With a GIC of $651.02 on 28 October 2005 the balance in the RBA statement stood at $118,028.15. With the remission of that GIC on 24 March 2006 the balance stood at $117,377.13, the entry misinterpreted by Ms Sreedharan.

25 There was a judgment interest charge of $48,398.50 on 4 March 2010. The balance of the account then stood at $166,275.63. There is no other reference to a judgment. The RBA was cleared by the transfer of credits and the remission of GIC. Ms Sreedharan annexed the ATO practice statement on the transfer of credits.

26 Ms Sreedharan made no attempt in her second affidavit to deal with Mr Evans' complaints beyond saying that the ATO had conducted an audit of his BAS RBA, had concluded that he was not entitled to input tax credits and had revised the claimed credits to nil.

27 Mr Evans swore a second affidavit in which he repeated the complaints in his first affidavit in different terms.

28 The hearing in the District Court was adjourned twice. For the actual hearing, Ms Sreedharan affirmed a third affidavit. It merely brought the RBA deficit debt up to date. Ms Sreedharan made no attempt to address Mr Evans' complaints. Annexed was an unsigned copy of the BAS RBA statement with balance date the same as the date of affirmation of her third affidavit and the date of a new certificate under s 8AAZJ of the Administration Act signed by a Deputy Commissioner. Again, since the copy of the BAS RBA statement was unsigned, it lacked the benefit of s 8AAZI.

29 Mr Evans made a third affidavit in which he expressed his complaints in the first affidavit in different terms. He said it made it easier to understand his complaints. The affidavit was not sworn. It was over 200 pages. It was handed to Mr Jay, counsel for the Deputy Commissioner, on the morning of the hearing. Mr Evans appeared in person at the hearing and on this appeal.

30 On the two previous occasions the matter was before the District Court, Mr Evans served lengthy affidavits on the morning of each hearing. On the second occasion, Elkaim DCJ made an order that no further evidence be served less than seven days prior to the hearing date. Mr Jay objected to Mr Evans reading his third affidavit and Williams DCJ rejected it. His Honour said:

"Mr Evans, I'm not prepared to allow you to rely on your latest affidavit but subject to any objections, I'll allow you to read the earlier affidavits. My reasons for doing that are, whilst it's true that you are self-represented and some latitude needs to be given to you, this is a taxation matter, you're an accountant. Given the fact that on 19 October 2011, Judge Elkine [sic] made an order that you were to serve any material you relied on not less than 7 days before today and that hasn't occurred, the matter has been in the list several times before for hearing, I don't think its fair on the plaintiff to have to meet at the last minute anything that hasn't already been dealt with or that could have been dealt with by you filing an affidavit within time. So I'm not prepared to allow you to rely on this affidavit of 18 November but, as you've heard Mr Jay say, he's not caught by surprise by the earlier two affidavits, so you can rely upon those."

31 In his notice of appeal Mr Evans claimed that his Honour erred in refusing to allow him to file his third affidavit in Court and in failing to provide reasons for refusing to allow him to rely upon it.

32 These grounds are without merit. His Honour did give reasons. They are set out above. The order of Elkaim DCJ was appropriate and his Honour, Williams DCJ, was entitled to give effect to it in the exercise of his discretion.

33 Besides, the matters of complaint are set out in Mr Evans' first affidavit and are repeated in different form in his second affidavit. Of the rejected affidavit, Mr Evans said:

"I'd like to propose your Honour, that the affidavit that I've submitted today is merely a reinstatement of all the facts, all the facts that I've provided in early affidavits, dated 14 October and 21 June your Honour. The affidavit more clearly identifies the issues and the disputed liabilities and amounts and those other affidavits your Honour and I believe in its entirety, provides a much clearer and better picture of the claims that I am making in my defence of this matter before the Court your Honour."

34 Furthermore, Mr Evans had the opportunity of addressing the trial judge orally in the terms he had used in the rejected affidavit.

35 In his notice of appeal Mr Evans claimed his Honour erred in failing to grant an adjournment to allow proceedings in the Administrative Appeals Tribunal (AAT) to be heard and finally determined prior to the hearing and determination of the proceedings at first instance.

36 In effect, Mr Evans sought a stay of the current proceedings pending a review and determination by the AAT.

37 Division 4 of Part IVC of the Administration Act applies to the review of a reviewable objection decision by the AAT. Section 14ZZM is within that Division. It is in the following terms:

"The fact that a review is pending in relation to a taxation decision does not in the meantime interfere with, or affect, the decision and any tax, additional tax or other amount may be recovered as if no review were pending."

38 Division 5 of Part IVC of the Administration Act deals with appeals to the Federal Court of Australia. It contains a like provision in s 14ZZR.

39 In Deputy Commissioner of Taxation v TDE Nominees Pty Ltd (No 2) [2011] NSWSC 1528, Gzell J analysed the authorities on this topic, at [18]-[32], as follows:

"18 The legislative scheme established in relation to tax recovery, as manifested in provisions like s 14ZZR of the Taxation Administration Act reflects a clear policy in favour of the Revenue and against the taxpayer. The Commissioner is placed in a position of special advantage and is, in general, free to pursue recovery of proceedings, despite outstanding appeals and reviews against disallowance of an objection: Trade World Enterprise Pty Ltd v Deputy Commissioner of Taxation [2006] VSCA 191; (2006) 64 ATR 316 at [19]; 322, referring to Clyne v Deputy Commissioner of Taxation (NSW) (No 3) (1983) 48 ALR 545 at 547.

19 The policy of the Income Tax Assessment Act 1936 as reflected in its provisions gives priority to recovery for the Revenue against the determination of the taxpayer's appeal against the assessment.

20 The effect of s 177 of the Income Tax Assessment Act 1936 and s 14ZZR of the Taxation Administration Act is to give primacy to the general right of the Deputy Commissioner to have tax paid irrespective of the pendency of an appeal and its merits: Deputy Commissioner of Taxation (NSW) v Mackey (1982) 13 ATR 547 at 550; Deputy Commissioner of Taxation v Ho (1996) 131 FLR 188 at 191; Deputy Commissioner of Taxation v Feldman [2006] NSWSC 378; (2006) 62 ATR 253 at [15]; 256.

21 The mere fact that an appeal or review is pending is not sufficient to grant a stay: Trade World at [20]-[21]; 322.

22 Liability to pay the assessed tax is not suspended pending the outcome of the review: Deputy Commissioner of Taxation v Alvaro (1990) 21 ATR 726.

23 Great weight must be given to the effect of provisions such as s 14ZZM and s 14ZZR of the Taxation Administration Act: Trade World at [20]; 322; Mackey at [550]; Feldman at [15]; 256; Ho at 190.

24 The Court has jurisdiction to stay recovery proceedings pending a review of or an appeal against an assessment, but the power is discretionary and should be exercised with great caution and only, in my view, in special or exceptional circumstances: Feldman at [15]; 256; Ho at 191; Deputy Commissioner of Taxation v Gergis (1991) 22 ATR 1 at 3; Trade World at [21]; 322.

25 The onus is on the applicant to demonstrate sufficient circumstances to warrant the grant of a stay: Ho at 192. The power to grant a stay is exercised sparingly and the onus is on the taxpayer to justify it.

26 The effect of s 14ZZM and s 14ZZR of the Taxation Administration Act is said to preclude the Court from considering the prospects of success of any review or appeal by a taxpayer to either the Administrative Appeals Tribunal or the Federal Court: Feldman at [15]; 256, although there are statements to the contrary.

27 Hardship to the taxpayer is a relevant matter: Trade World at [21]; 322. If the taxpayer can establish "extreme personal hardship" a stay may be granted: Cywinski v Deputy Commissioner of Taxation [1990] VR 193 at 197; Ho at 193; Deputy Commissioner of Taxation v Enal Pty Ltd (1987) 19 ATR 23 at 24.

28 The mere obligation to pay the assessment, however, is not hardship in itself: Cywinski at 197; Ho at [193]. The possibility that the taxpayer may be bankrupted is not, of itself, an extreme personal hardship: Ho at [194]; Deputy Federal Commissioner of Taxation v Akers 89 ATC 4725 at 4727.

29 The extreme personal hardship must be in relation to the taxpayer called on to pay: Mackey at 551.

30 In exercising the discretion to grant a stay, whether the Commissioner has abused his or her position, is a relevant matter: Cywinski at 197. Delay by the Commissioner is also a relevant matter: Deputy Commissioner of Taxation (Vic) v Trower (1986) 17 ATR 473 at 478.

31 If a taxpayer has been party to a contrivance to avoid his or her liability to tax, the Court should not stay proceedings or execution otherwise than in the most exceptional circumstances: Trade World at [21]; 322; Gergis at 3; Mackey at [550].

32 The principles are conveniently summarised by French J in Snow v Deputy Commissioner of Taxation (1987) 14 FCR 119 at 139:

'It may generally be concluded from the preceding review, that the power of State courts to stay recovery proceedings instituted in them under the ITAA is well established and that courts exercising it have regard to the following propositions:

1. The policy of the ITAA as reflected in its provisions gives priority to recovery of the revenue against the determination of the taxpayer's appeal against his assessment.

2. The power to grant a stay is therefore exercised sparingly and the onus is on the taxpayer to justify it.

3. The merits of the taxpayer's appeal constitute a factor to be taken into account in the exercise of the discretion (although some judges have expressed different views on this point).

4. Irrespective of the legal merits of the appeal a stay will not usually be granted where the taxpayer is party to a contrivance to avoid his liability to payment of the tax.

5. A stay may be granted in a case of abuse of office by the Commissioner or extreme personal hardship to the taxpayer called on to pay.

6. The mere imposition of the obligation to pay does not constitute hardship.

7. The existence of a request for reference of an objection for review where appeal is a factor relevant to the exercise of the discretion.'"

40 In this case, Mr Evans had not even filed an application for review with the AAT. He had prepared a draft. He said he had not filed the application because he had four years in which to do so.

41 Mr Evans has not established that Williams DCJ was in error in refusing to grant his application for an adjournment. His Honour was being asked to stay proceedings on the basis of a prospective application for review. Mr Evans had the opportunity to make a timely application for review by the AAT but elected not to do so. He made no submission of personal hardship.

42 Mr Evans alleged in his notice of appeal that Williams DCJ erred in treating the certificate under s 8AAZJ of the Administration Act as conclusive evidence of the debt claimed by the Deputy Commissioner where the certificate contained an error on its face and was only prima facie evidence of the debt.

43 The typographical error in the first certificate annexed to Ms Sreedharan's first affidavit was not repeated in the certificate annexed to Ms Sreedharan's third affidavit.

44 Williams DCJ did not treat the certificate as conclusive evidence of the debt. Having said that Mr Evans had not pursued any statutory right of objection or appeal his Honour said:

"40 In effect he now wishes to raise all these matters as grounds of defence to the debt incurred and have this court negate the past decisions of the ATO.

41 In my view, whilst in appropriate circumstances that may be able to be done by this court, it could only do so on evidence that establishes such contentions on the balance of probabilities. A prima facie case can always be displaced by evidence to the contrary. The legislation creates a presumption of correctness as to the contents of an RBA statement and that it was duly kept. A certificate under s 8AAZJ is also prima facie evidence of the matters set out in ss(1)(a), (b), (c) and (d). In other words, unless there is cogent evidence that the RBA was not duly kept or was incorrect, a court cannot go behind the RBA statement or the certificate, except perhaps if it can be demonstrated there is an error on the face of the document itself, such as a mathematically incorrect figure."

45 Mr Evans has not made out his claim that his Honour treated the certificte as conclusive evidence.

46 Mr Evans claimed in his notice of appeal that Williams DCJ failed to afford him procedural fairness in various ways. One way was his Honour's failure to allow Mr Evans the opportunity to obtain legal advice and representation.

47 That claim is erroneous. No application was made to adjourn the hearing to obtain legal advice and representation. Mr Evans had previously been granted an adjournment for that purpose. He informed Williams DCJ that he had obtained legal representation and advice from counsel.

48 Mr Evans' claim in his notice of appeal that Williams DCJ demonstrated bias, actual or perceived, is without foundation. No bias is identified by Mr Evans and his written submissions in support of this ground of appeal relate to his Honour's rejection of his third affidavit. Bias was not mentioned in oral submissions before this Court.

49 Mr Evans claimed in his notice of appeal that his Honour erred in finding that his status as an accountant and registered auditor was tantamount to fully comprehending the legal significance of matters arising under the Administration Act and his liability thereunder.

50 Mr Evans referred to the passage from his Honour's judgment set out above in which his Honour rejected Mr Evans' third affidavit. In that passage his Honour said: "This is a taxation matter, you're an accountant."

51 In exercising his discretion to reject Mr Evans' third affidavit, his Honour took into account the fact that this was a taxation matter and Mr Evans was an accountant. His Honour also took into account the order of Elkaim DCJ, the lateness of the service of the third affidavit and the unfairness to the Deputy Commissioner to have to meet it at the last minute.

52 The reference to taxation matters and accountants does not mean that his Honour was attributing an intimate knowledge of the taxation statutes to Mr Evans. Many accountants lodge tax returns for clients without such knowledge. What is needed is a facility with figures and, as this matter demonstrates, Mr Evans has considerable flair with figures.

53 Mr Evans claimed that he had been denied procedural fairness by the failure of his Honour properly to consider his evidence in relation to erroneous calculations.

54 Returning to his first affidavit, Mr Evans said that on 23 April 2004 his income tax account had an outstanding debt of $12,215.91 which he accepted. But he said that it should have been cleared against the available credits arising from his 2002 income tax return in the sum of $57,592. Instead he says the ATO utilised his 2004 tax return and offset the debt on 22 November 2004 after which time it remained in credit by an amount of $8,584.09.

55 If the complaint is correct, the timing of the offset has implications with respect to the GIC. It also means that an available credit for transfer to the BAS RBA was delayed.

56 Ms Sreedharan did not deal with this complaint. This Court sought supplementary submissions from Mr Jay and from Mr Evans.

57 Mr Jay pointed out that the complaint was about Mr Evans' personal income tax account and submitted that it was unrelated to the BAS RBA. Mr Jay submitted that it was incorrect to contend that the ATO utilised the 2004 income tax return and transferred a credit on 22 November 2004. It was submitted that the 2004 income tax return was not processed until 20 February 2010 due to late lodgement by Mr Evans. It was submitted that prior to this the GIC of $5,882.37 was the subject of a credit of $5,882.35 with rounding and the account remained at nil balance while it remained the subject of non-pursuit.

58 None of this response to Mr Evans' complaint was available to assist Williams DCJ.

59 Mr Evans' response was that while the 2004 return was processed on 20 February 2010 it was back dated to 22 November 2004 and that should have caused the GIC to be redetermined and the charge of $5,882.37 should not have been made. Further, Mr Evans submitted that there should have been a credit balance in the income tax account much earlier than there was enabling a transfer of credit to the BAS RBA to have occurred much earlier than it did.

60 These are matters that should have been investigated and dealt with by Ms Sreedharan.

61 Another of Mr Evans' complaints, although of small moment, is indicative of the lack of precision brought to bear in this case by the ATO. Mr Evans' handwritten entry in his BAS RBA form of $10,346 for the PAYG Withholding for the quarter ended 30 June 2002 appears to have been manually entered into the IPS as $11,335.

62 Supplementary submissions were sought in this Court in relation to this discrepancy. Mr Jay relied upon Ms Sreedharan's proposition that a judgment had been obtained and charged to another RBA. Even at this stage the inaccuracy in that proposition was not discovered.

63 Mr Jay referred to a document printed from the View and Print Business Activity Statement screen showing an amount of $11,335 as the PAYG Withholding for the quarter ended 30 June 2002. That figure was keyed into the IPS. As Ms Sreedharan explained any document printed from the View and Print Business Activity Statement screen contained information manually keyed into the IPS.

64 Mr Jay submitted that $10,346 was shown on an amended BAS RBA form. Mr Evans said he was asked to resubmit his BAS RBA forms for the 2002 year and did so on forms he dated 19 May 2008.

65 Mr Jay said that the ATO determined that additional amounts of $11,297 and $15,744 were due for the same period giving a cumulative total of $38,376 but, ultimately, a credit was granted to Mr Evans of $28,030 being the amount of $38,376 less the debt Mr Evans returned of $10,346.

66 Mr Evans complains that the credit was raised in a different RBA and the interest being earned on it is at a lower rate than the GIC still being charged on his BAS RBA.

67 None of this material was before Williams DCJ. Again, these are matters that should have been investigated and dealt with by Ms Sreedharan.

68 Going back to Mr Evans' first affidavit, he claimed that he made a mistake in lodging his 2005 income tax return. The supplementary section of this return showed a non-primary production loss of $400,067 that he failed to transfer to the net income or loss from business portion of his return. Mr Evans says that a transfer of that loss would have resulted in an estimated refund for the 2005 year of $24,544.

69 Mr Evans said that when he realised his mistake he put in an amended return. If the ATO had adjusted his return it would have meant that he had a credit balance that could have been transferred to his BAS RBA. He says that the ATO failed to process his amended return.

70 Again, Ms Sreedharan should have dealt with this complaint.

71 Mr Evans claims that a refund of $1,560 in the 2008 income tax year has not been recognised by the ATO. He claims it would have led to a refund or credit of $1,560 that could have been offset against his BAS RBA.

72 This was another matter that should have been investigated by Ms Sreedharan.

73 Mr Evans claims that in keying in information from his BAS RBA forms to another RBA account, clerical errors were made with respect to PAYG Withholdings such that his BAS RBA debts were overstated by $18,037. In 2002 he says the BAS RBA forms stated $36,590 that was entered into the IPS as $38,376. In the 2004 year he says the BAS RBA forms stated $5,343 that was entered as $13,280. And he says the ATO wrongly entered a further $8,314.

74 Ms Sreedharan should have investigated this complaint.

75 Mr Evans claims that these errors gave rise to additional GIC of $5,877.12 and reduced the availability of offset to the BAS RBA or his other debts of his 2007 income tax refund.

76 This matter ought to have been investigated by Ms Sreedharan.

77 Mr Evans' further complaint about another RBA was that the ATO used credits from his income returns for the years 2002, 2003, 2004 and 2006 after which the account was in credit and remained in credit until the posting of GIC on 12 May 2010. He says that despite the debt being reduced to nil, in November 2007 the ATO credited part of the 2007 income tax return loss of $23,281.82 to the account increasing its credit balance to $40,892.69. On 4 March 2010 he says that a judgment interest charge of $48,398.50 was charged to the account followed by a GIC credit of $7,505.81. Mr Evans complains that these errors brought about an inability to utilise the available 2007 refund and other credits accrued on the account to satisfy his BAS RBA deficit.

78 This complaint should have been investigated by Ms Sreedharan

79 Mr Evans complained that the audit of his BAS RBA, the increase in his BAS RBA deficit debt and his subsequent deregistration for GST were unwarranted and caused his BAS RBA deficit debt to be overstated to the extent of $35,467.

80 This was not a complaint that Ms Sreedharan investigated.

81 Mr Evans says that following his deregistration for GST another audit took place and his BAS RBA deficit debt was wrongly increased by $7,180.

82 This was a complaint that Ms Sreedharan should have investigated.

83 In each of the four BAS RBA forms for the quarters of 2002 at the item "reason code for variation T4" Mr Evans inserted the number 27. That variation code was "use of income tax losses". He says that this meant that on his PAYG Instalments he should have been debited with nothing because of the offset claim. The BAS information reproduced from the View and Print Business Activity Statement screen showed that the code was not keyed into the IPS with the consequence that a debit was raised in Mr Evans' BAS RBA for the amount of the PAYG Instalment. Mr Evans claims that the BAS RBA deficit debt is overstated by $24,942 with the addition of GIC.

84 Ms Sreedharan should have investigated this claim.

85 Mr Evans complained that a former partner falsely lodged BAS returns alleging he was an employee and returning salary and remissions as PAYG Withholdings leading to $13,367 being debited to the BAS RBA.

86 Ms Sreedharan should have investigated this claim.

87 In his first affidavit Mr Evans had a table of the reductions he claimed as follows:

Para
Ref	Item	Am $
30	GIC incorrectly charged	5,882.37
33	2005 tx rtn amend	25,322.00
35	2008 tx rtn	1,560.00
39	legal action acct errors	18,037.00
39	GIC incorrectly charged	5,877.12
42	Incorrect charge	40,892.69
57	Gst Deregistration	35,467.00
69	GST credits reversed	7,180.00
73	PAYE errors	24,942.00
83	Internal fraud	13,367.00
Total		178,527.18

88 In his second affidavit, Mr Evans omitted the $7,180 as GST credits reversed leading to an adjusted total of $171,347.18.

89 This Court was informed by Mr Evans and it was confirmed by Mr Jay that in March 2012 he received a cheque in relation to his 2005 income tax return. His complaint was that it should have been a credit transferred to his BAS RBA. But he made no effort to write a cheque for the same amount in favour of the ATO thereby creating the credit he sought.

90 This Court was also informed by Mr Evans and it was confirmed by Mr Jay that a credit of $13,367 was granted in relation to the internal fraud item in his table. Mr Evans complained that it was allocated to a new RBA and should have been allocated to his BAS RBA.

91 When these two items are removed from Mr Evans' table the adjusted total becomes $132,658.18

92 Mr Evans was entitled to seek a review by the AAT of the decision arising from the audit, the disallowance of input tax credits and the consequent increase in his net amount.

93 Section 17-5 of the GST Act provides that the net amount for a tax period is worked out by the formula GST minus input tax credits. Section 33-3 provides that if the assessed net amount for a tax period is greater than zero the assessed net amount must be paid to the Commissioner on a specified date.

94 Section 105-5 in Schedule 1 to the Adminstration Act provides that the Commissioner may at any time make an assessment of a net amount or any part of it for a tax period. In this case a notice of assessement issued to Mr Evans.

95 Section 105-40 in Schedule 1 to the Administration Act provides that a taxpayer may object against a decision that is a reviewable indirect tax decision. It provides that a decision under s 105-5 involving an assessment of a net amount is a reviewable indirect tax decision.

96 Then section 14ZW(1AAA) provides that the taxpayer must lodge the taxation objection before the end of whichever of 60 days after service of the notice of the decision and four years after the end of the tax period to which the decision relates is the later. The notice of assessment that issued to Mr Evans drew his attention to these time limits.

97 Following the audit Mr Evans received a notice of cancellation of his registration for GST. He was also entitled to seek a review by the AAT of that decision. Section 110-50(1)(a) in Schedule 1 to the Administration Act provides that one may object in the manner set out in Part IVC against a decision that is a reviewable GST decision. Section 110-50(2) sets out a list of reviewable GST decisions. The list includes at item 5 cancelling a person's registration. Mr Evans was thus entitled to seek a review or appeal from that decision under Part IVC. He was so advised and chose not to do so.

98 But Mr Evans' arguments in relation to the other items in his table could not be raised in a review by the AAT or an appeal to the Federal Court. Part IVC of the Administration Act dealing with objections, reviews and appeals contains s 14ZL(1) which provides:

"This Part applies if a provision of an Act or of regulations (including the provision as applied by another Act) provides that a person who is dissatisfied with an assessment, determination, notice or decision, or with a failure to make a private ruling, may object against it in the manner set out in this Part."

99 Neither the Administration Act nor any other Act or regulation provides that a person dissatisfied with an entry in a RBA may object.

100 And the right to apply to the AAT for review or to appeal to the Federal Court in s 14ZZ is limited to persons dissatisfied with the Commissioner's objection decisions. It is in the following terms:

"If the person is dissatisfied with the Commissioner's objection decision (including a decision under paragraph 14ZY(1A)(b) to make a different private ruling), the person may:

(a) if the decision is both a reviewable objection decision and an appealable objection decision - either:

(i) apply to the Tribunal for review of the decision; or

(ii) appeal to the Federal Court against the decision;

(b) if the decision is a reviewable objection decision (other than an appealable objection decision) - apply to the Tribunal for review of the decision; or

(c) if the decision is an appealable objection decision (other than a reviewable objection decision) - appeal to the Federal Court against the decision."

101 Part IVC of the Administration Act is an exclusive code for reviews by the AAT and appeals to the Federal Court with respect to rights to object that fall within the Part. The AAT and the Federal court are empowered to deal with Commissioner's decisions on notices of objection. It is not open to a state or territory court to entertain such reviews or appeals and it is impermissible to raise these issues by way of defence. The state and territory courts have no jurisdiction to determine such issues.

102 The item for GST deregistration in Mr Evans' table must be deleted producing a further revised total of $97,191.18.

103 In the absence of assistance from Ms Sreedharan, Williams DCJ was left to grapple with the affidavits of Mr Evans. Of this task his Honour said:

"39 Regrettably Mr Evans written evidence by way of affidavit and his oral submissions based substantially on the affidavit material are extremely difficult to follow logically apart from the general tenor of much of what he submits which relates to dissatisfaction with the way he was treated at different times by the ATO. However despite his complaints about that behaviour and the perceived unfairness of his treatment, Mr Evans has not pursued any statutory right of objection or appeal.

40 In effect he now wishes to raise all these matters as grounds of defence to the debt incurred and have this court negate the past decisions of the ATO."

104 With respect to Mr Evans' claim in relation to the ATO's disallowance of input tax credits and its consequent revision upwards of the BAS RBA net amount and with respect to Mr Evans' claims on deregistration for GST, his Honour was quite correct. Mr Evans had statutory rights of review or appeal under the exclusive code in Part IVC of the Administration Act. These matters could not be raised as defences in the proceedings before him.

105 But as to the balance of Mr Evans' complaints going to the quantum of the BAS RBA deficit debt, these were matters of defence. They could not be raised in the AAT or the Federal Court.

106 Section 8AAZI and s 8AAZJ of the Administration Act presuppose that there will be litigation in relation to amounts in an RBA and as to an RBA deficit debt. These are matters for state or territory courts.

107 Without even a modicum of assistance from the ATO on these issues Williams DCJ did not decide them. In my view there must be a new trial.

108 In relation to costs I would set aside the order in the District Court and remit the question to the judge hearing the new trial. I would grant Mr Evans costs of the appeal limited to reasonable disbursements.

109 The orders I propose are as follows.

(1) The appeal is allowed;

(2) The verdict and judgment made by Williams DCJ on 25 November 2011 is set aside;

(3) Order that there be a new trial;

(4) Order that the costs of the first trial be in the discretion of the judge hearing the new trial;

(5) Order that the respondent pay to the appellant the amount of out-of-pocket expenses, of a type that would have been recoverable as disbursements if the appellant had been legally represented, that the appellant has actually and reasonably incurred concerning the present appeal.

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Decision last updated: 30 November 2012