Appeal struck out
2014 case note – successful application by the CIR to strike out a purported appeal of a decision made by the Taxation Review Authority - interlocutory, objection.
A successful application was made by the Commissioner of Inland Revenue ("the Commissioner") to strike out a purported appeal of a decision made by the Taxation Review Authority ("TRA") under the Taxation Review Authorities Regulations 1998 ("TRAR").
Impact of decision
This decision confirms that s 26 of the Taxation Review Authorities Act 1994 ("TRAA") does not provide a separate right to appeal from decisions made by the TRA under the TRAR.
On 7 February 2014, the taxpayer filed a notice of appeal purporting to appeal the decision of the TRA not to make orders under Regulation 6(4) of the TRAR.
The taxpayer had sought orders directing the Commissioner to allow objections made by the taxpayer in relation to several income years. Judge Sinclair determined that the objections in relation to the 1991-94 income years were not competent objections under s 126 of the Tax Administration Act 1994 ("TAA"). Consequently she declined to make the orders sought by the taxpayer ("the Decision").
The Commissioner applied to strike out the appeal on the basis that there was no jurisdiction to appeal the Decision as it was not a "determination of an Authority on any objection" under s 26 of the TRAA.
The TRA granted the Commissioner's application and made an order striking out the applicant's Notice of Appeal.
In relation to two preliminary issues raise by the taxpayer, Judge Sinclair held, firstly, that the TRA had jurisdiction to determine the Commissioner's present application as the TRA had heard and determined applications to strike out purported appeals on other occasions. The TRA's jurisdiction had not been overruled in the High Court and Court of Appeal which considered the matter.
Secondly, her Honour noted Judge Barber's observations in Case W48 (2004) 21 NZTC 11,448that procedural steps taken by the Registry cannot create jurisdiction that otherwise does not exist, and concluded that the TRA is not bound by a procedural step taken by the case manager (who had sent the taxpayer an email accepting the Notice of Appeal).
Judge Sinclair moved on to consider whether s 26(1) of the TRAA which states "[T]he determination of an Authority on any objection shall be subject to appeal to the High Court in any case where …", limited appeals only to determinations of the TRA on any objections, or allowed appeals of interlocutory decisions.
Her Honour noted that s 26 of the TRAA applies only to objections under Part 8 of the TAA. She concluded that there is no right of appeal from the Decision under s 26 of the TRAA as the applicant's objections were not considered to be objections commenced under Part 8.
Judge Sinclair, citing Hammond J's reasoning in M & J Wetherill Company Limited and Ors v Taxation Review Authority  21 NZTC 18,924,found the Decision was of an interlocutory nature as there has not been a determination of an objection on its merits.
In relation to s 27 of the New Zealand Bill of Rights Act 1990 and s 6 of the TAA, her Honour found that there would be no denial of natural justice, or damage to the integrity of the tax system, if the TRA struck out the appeal. She concluded that there was no absolute right of appeal from decisions of the TRA and for such a right to exist the appeal must come within the provisions of s 26(1) of the TRAA.
Finally, Judge Sinclair agreed with the Commissioner that matters the applicant may intend to raise on appeal are irrelevant to this issue and there is no reason to delay hearing the application until the grounds of the appeal have been articulated.
Tax Administration Act 1994, Taxation Review Authorities Act 1994, Taxation Review Authorities Regulations 1998