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26 Jul 2011
Appeal Status
Not appealed

Judicial review of tax credit claim disallowed

2011 case note - inappropriateness of judicial review proceedings to challenge assessment's correctness - gross benefit, domestic purposes benefit, compensation.

Irene Yeh Leng Goh v Commissioner of Inland Revenue


A taxpayer's claim of tax credit against the Commissioner resulting from tax paid on compensation by the Accident Compensation Corporation ("ACC") was struck out for being untenable and for abuse of process.

Impact of decision

This is a further case illustrating the inappropriateness of judicial review proceedings to challenge the correctness of an assessment.


Between March 1998 and September 2005 ("the relevant period"), Ms Irene Goh ("Ms Goh") received the domestic purposes benefit ("the benefit") from the Ministry of Social Development ("MSD") as a result of her physical injury. The benefit paid by MSD included payment of PAYE to Inland Revenue on behalf of Ms Goh.

Ms Goh was later found to be entitled to compensation from ACC for the relevant period when she was in receipt of the benefit. ACC calculated the compensation by deducting an amount equivalent to the gross amount of the benefit paid by MSD for the relevant period.

ACC then, as was required by the relevant statutes, paid to MSD the net amount of the benefit and its tax component to Inland Revenue ($10,049.08). It was ACC's payment of the tax to Inland Revenue that Ms Goh took issue with. She claimed that ACC had no right to pay the tax component as it was the net amount of the benefit that had to be repaid to MSD.

Ms Goh claimed the tax component of the benefit paid by ACC to Inland Revenue in the form of a tax credit for her tax income year ending 31 March 2006. Ultimately, the matter was considered by Inland Revenue's Adjudication Unit, which decided against Ms Goh.

Ms Goh commenced judicial review proceedings against the Commissioner, challenging the decision of the Adjudicator. The Commissioner applied to strike out Ms Goh's claim on the basis that her judicial review proceedings was an abuse of process and was untenable. The High Court agreed with the Commissioner and struck out Ms Goh's claim. She appealed to the Court of Appeal.


Abuse of process

The Court of Appeal agreed with Justice Woodhouse in the High Court that Ms Goh's challenge was about the validity of the Commissioner's assessment disallowing a tax credit. The appropriate remedy is through the dispute process and not by judicial review.

Claim untenable

The Court also agreed with Justice Woodhouse that the benefit ACC had to pay MSD was the gross amount of benefit, which included the tax component part-paid to Inland Revenue. The inter-government arrangement provided under the statutes for Inland Revenue to reimburse MSD for the earlier tax component paid by MSD. Inland Revenue did repay the tax it received from MSD. The ultimate result was that Ms Goh lost nothing in the scheme of things and was not taxed twice.

Injury Prevention Rehabilitation and Compensation Act 2001, Tax Administration Act 1994