2015 case note - CIR applied to strike out the disputants' challenge as being solely for the purposes of delay and as frivolous and vexatious – unless order.
Goods and Services Tax Act 1985
The Commissioner of Inland Revenue ("the Commissioner") applied to strike out the disputants' challenge as being solely for the purposes of delay and as frivolous and vexatious. The Taxation Review Authority ("TRA") found for the Commissioner, but gave the disputant one "last-chance" to retain counsel, and file briefs of evidence and submissions within one month of the date of judgment. Failing this, the challenge will be struck out.
The Commissioner applied to strike out the disputants' challenge as being solely for the purposes of delay and as frivolous and vexatious. In response, the disputants applied to adjourn a hearing date of 24 August 2015 to subpoena two former Inland Revenue employees.
Throughout the proceedings, the disputants were represented by a registered accountant who was also the sole director of the two disputants and of several other corporations within the same group who were involved in the supply transactions underlying the GST dispute.
The decision sets out the very lengthy procedural history in great detail. The Commissioner contended that other than filing a Notice of Claim in January 2012, the disputants had taken no productive steps towards the hearing. Rather, the disputants, through their tax agent, engaged in a pattern of frivolous applications (including seeking to stay and strike out their own proceedings) and adjournment requests, while failing to comply with unless orders. In the course of the proceedings, the tax agent also made accusations of bias and other misconduct against Crown Counsel and judges involved in the procedural aspects of the case.
The TRA agreed with the submissions of the Commissioner, finding that the tax agent was pursuing proceedings for the purpose of delay and that there had been an ongoing abuse of process by the tax agent. The TRA considered the process followed by the disputants to be vexatious and that it could also be described as frivolous. The TRA also found that the tax agent was effectively refusing to comply with the TRA's orders.
Nevertheless, the TRA believed that the conduct of the tax agent may deprive the disputants of a proper resolution to the underlying GST challenge.
Accordingly, the TRA allowed the disputants one further month from the date of the judgment to appoint a suitable counsel and file evidence briefs and opening submissions, in which case the TRA would set a new fixture date. Failing completion of those steps, the challenge would be struck out. The disputants' request for an adjournment of the 24 August 2015 hearing was otherwise dismissed.