Issued
2008
Decision
02 Apr 2008
Appeal Status
Not appealed

Delegated authority

2008 case note – Judge found the Manager of the Adjudication Unit had delegated authority to make the assessments.

Case
Shirley and Ronald Marshall v The Commissioner of Inland Revenue
Legal terms
assessments

Summary

The Adjudication Manager has delegated authority to make assessments.

Facts

On 4 October 1990, the taxpayers purchased 56 Arnold Street which comprised an area of 5,265 square metres and a dwelling house. The property was further subdivided into 11 sub-lots and houses were built on all but two of the sub-lots. The taxpayers separated in April 1991. Shirley Marshall took the major share of the subdivided property and continued with its development. All the subdivided lots were sold by the taxpayers from 1991 onwards. In 1994 Shirley bought another piece of property, at the Esplanade with her new partner. She built a house on it and sold it within two years.

Decision

At the hearing the taxpayers decided to run their case on the sole issue of whether the Commissioner had made valid assessments. On this issue, the Judge considered inter alia the following subsidiary issues:

  • whether the Commissioner had the authority to make assessments without the consent of the taxpayers
  • whether the Manager of the Adjudication Unit had delegated authority to make the assessments
  • whether the two Adjudication Reports of 30 June 2006 could be accepted as assessment.

The Judge held as follows:

  • that the Commissioner was empowered to make assessments without the consent of the taxpayers under section 106 (1) or section 113 of the TAA for income tax and under section 27 (1) for GST
  • that the Commissioner was not required to cite section 106 or section 113 in making the assessments
  • that the Manager of the Adjudication Unit had delegated authority to make the assessments and the evidential presumption under section 7(3) of the TAA applied
  • the Adjudication Reports were assessments and by reason of section 110 they could be accepted as evidence even though they were photocopies. Moreover, it was immaterial whether the word "determine" instead of the word "make" was used provided it was clear from the reports a decision was made on the amount of tax.

The Judge dismissed the taxpayers' claim and awarded costs to be fixed on a 2B basis for one counsel only.

Tax Administration Act 1994 (TAA)