|Date of judgement||21 June 2017|
|Judge(s)||JS Currie, Senior Member|
|Court or Tribunal||New South Wales Civil and Administrative Tribunal|
REVENUE LAW - Land Tax – Boarding houses exemption - section 10 Q Land Tax Management Act - Certain assessments not issued punctually - effect of lack of punctuality on validity of assessments - alleged estoppel - alleged misleading conduct - Assessments not unlawful - Lack of legal impediments to the issue of validity of the assessment - Chief Commissioner’s decision affirmed
On 05 February 2011, the Applicant applied for an exemption from land tax for the 2010 tax year on the basis that the land was being used as a boarding house. The Commissioner allowed the exemption for the 2010 to 2014 tax years as the boarding house met the conditions of the relevant guidelines issued by the Chief Commissioner for the purposes of s.10Q of the Act.
Revenue Ruling LT 093 containing the guidelines for the 2014 land tax year was issued on 19 December 2013. The 2014 Guidelines introduced a new requirement requiring boarding houses to be registered under the Boarding House Act 2014 to qualify as exempt low cost accommodation for the purposes of s.10Q. The Ruling contained a transitional provision to allow boarding houses to be eligible for the exemption if the business was registered under the Act by 30 June 2014 or “such later date as approved by the Chief Commissioner”. This transitional provision was not included in the Revenue Rulings or the Guidelines to the 2015 and 2016 tax years. The Applicant did not register the premises as a boarding house until 11 February 2016, a fact agreed to by both parties.
The Chief Commissioner exercised his discretion in relation to the 2014 land tax year and granted the land tax exemption for that year. However, the Chief Commissioner disallowed the Applicant’s objection to the land tax assessments for the 2015 and 2016 land tax years because the premises had not been registered as a boarding house by 30 June of either year.
Section 10Q of the Act provided:
The relevant guidelines for the purposes of s. 10Q(1)(c) for 2015 and 2016 both define boarding house as “premises which are registered under the Boarding Houses Act 2012 as either a general boarding house or an assisted boarding house”.
Assessments for the 2013 to 2016 tax years were issued on 4 March 2016. Reassessments for the 2013 and 2014 tax years exempting the boarding house for those 2 years were subsequently issued.
The Applicant contended that if it had known of the obligation, it would have registered under the Boarding House Act, and that the delay of the Chief Commissioner in issuing assessments for the 2013-2016 tax years was the cause of the Applicant’s lack of registration as a boarding house within time. The Applicant also raised issues of estoppel, misleading statements, negligence, breach of statutory duty and entrapment by the Chief Commissioner.
The Chief Commissioner made four submissions:
The Tribunal noted the following:
The Tribunal held that delay by the Chief Commissioner in issuing tax assessment notices did not alter the validity of the assessments. The Tribunal noted that once a liability for land tax arises the Chief Commissioner has an obligation to issue an assessment, but the Act did not impose any time limit on the issue of an assessment (Gunasti v Chief Commissioner of State Revenue  NSWADT 218; 90 ATR 906 at  to ) and Joukhador v Chief Commissioner of State Revenue  NSWSCATAD 43 at -.
The Tribunal considered that the Gunasti decision was clear authority that estoppel does not lie against the Chief Commissioner in the discharge of his duty to administer the taxation law.
The Tribunal did not accept that the Chief Commissioner had misled the Applicant nor had he been negligent or breached any statutory duty, as it was clear to the Applicant that it had to apply for the exemption each year and it could not assume that once it received an exemption that it would continue from year to year.
The Chief Commissioner’s decision under review is confirmed.