Catchwords:
TAXES AND DUTIES – Mining Act 1992 (NSW) ss 282(1), 283, 287(1), 287A, 289, 291, 291A – Taxation Administration Act 1996 (NSW) (TA Act) ss 3, 5B, 9, 14, 17, 21, 25, 26, 33, 97, 101 – Plaintiffs are members of a corporate group and are miners and sellers of coal, and hold mining leases – Under the Mining Act, the holders of such leases are liable to pay royalty to the Crown on publicly owned minerals recovered by them – Application for review of decision of the Chief Commissioner of State Revenue to disallow (in part) Assessment Notices for royalty under the Mining Act plus interest and penalty tax – Whether the giving by the Chief Commissioner of a “confirmation” on a Royalty Online Service (ROS) for the making of royalty returns is the making of an assessment of the tax liability of a taxpayer with the consequence that the Assessment Notices were reassessments to which a five year limitation period under the TA Act applies – HELD: the “confirmation” is not a making by the Chief Commissioner of an assessment of the tax liability of the Plaintiffs – Where the Plaintiffs submitted royalty returns on the basis of an intra-group arrangement (the Return Arrangement) which permitted the making of negative royalty returns and set-off within the group against positive returns of members of the group – Royalty was returned and paid on this basis with the knowledge and cooperation of senior members of the government department then responsible for the administration of the royalty system and was subject to audits which were passed – The Return Arrangement is not permissible under the Mining Act as a basis for rendering royalty returns – Whether the only assessments that were permissible for the Chief Commissioner to make was a nil one because the Crown waived the right to claim royalty on any other basis or was party to a binding agreement with the Plaintiffs not to do so or was estopped from claiming royalty on another basis – HELD: waiver, even if available, not established, binding agreement not established, and estoppel not available and, in any event, not established LIMITATION OF ACTIONS – Limitation Act 1969 (NSW) ss 10(3)(a), 14(1)(d) – The Limitation Act s 10(3)(a) does not apply to an action by the Crown for the recovery of a tax – Whether the royalty payable to the Chief Commissioner is a tax – HELD: it is INTEREST AND PENALTY TAX – Whether the Court should remit market interest, the premium component of interest and penalty tax imposed by the Assessment Notices – HELD: it should until 1 November 2022, when the Assessment Notices were issued and which have not been paid by the Plaintiffs, because the Return Arrangement was fully disclosed, implemented with the cooperation of a government department and audited, the Plaintiffs took reasonable steps to comply with their tax obligations, an audit which called it into question and which led to the issue of Assessment Notices took four years to complete and the Plaintiffs’ case was not unreasonably brought or unarguable – However, from the date of the Assessment Notices the Plaintiffs fell into wilful default because they did not pay on them