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16 Aug 2010
Appeal Status
Not appealed

Application to commence proceeding under section 138D of the Tax Administration Act 1994

2010 case note - taxpayer did not adequately address the question of late filing - no exceptional circumstances.

TRA No. 11/09


The taxpayer did not adequately address the question of why she did not file her notice of response (NOR) or notice of proposed adjustments (NOPA) on time. There were no "exceptional circumstances" in this case.

Impact of decision

A taxpayer's inaction in filing a NOR on time would not normally constitute "exceptional circumstances".


GST (goods and services tax)

On 19 July 2007 the Commissioner issued a NOPA to Mrs S for GST for the periods ending 31 May 2003, 30 June 2003, 31 July 2003, 31 August 2003, 30 September 2003, 29 February 2004, 30 September 2005 and 31 October 2005.

The due date for responding to the NOPA by a NOR was 18 September 2007.

On 19 September 2007, the Commissioner received a letter from Mrs S's husband, which purported to be a NOR. The letter said that Mrs S did not agree with the proposed assessment and that her lawyer was out of the country and would provide a response on his return.

No further response was received from Mrs S or her lawyer.

By a letter dated 16 October 2007, the Commissioner advised Mrs S that his NOPA was deemed accepted because the purported NOR was not valid and a legitimate response was out of time.

Income tax

Mrs S had not filed any tax returns for the income years 2004 to 2007. By a letter dated 27 August 2007, the Commissioner informed Mrs S that default assessments had been made for those periods. Notices of the assessments were later issued by the Commissioner to Mrs S on 28 August, 29 August and 31 August 2007 respectively.

Nearly a year later, on 1 July 2008, Mrs S issued a purported NOPA and her income tax returns to the Commissioner.

By a letter dated 1 August 2008, the Commissioner informed Mrs S that her purported NOPA was out of time.

Challenge proceedings

On 5 March 2009 Mrs S applied to the Taxation Review Authority under section 138D, "exceptional circumstances" to commence challenge proceedings out of time, in respect of the GST and income tax assessments.


Judge Barber considered that the facts relied on to equate to "exceptional circumstances" were in fact a "tactical response to the Commissioner's action for tax recovery".

His Honour held that he had jurisdiction to hear a section 138D application but he did not consider that in this case the disputant had made out "exceptional circumstances". No reasonable justification was demonstrated for not filing a challenge within the response period. Additional grounds raised went to the merits of the underlying assessments. His Honour agreed that these were "irrelevant" and it was "difficult to conclude Mrs S had been treated unjustly".

Section 138D of the Tax Administration Act 1994