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20 Apr 2015
Appeal Status
Not appealed

TRA considers it has no jurisdiction to consider GST periods

2015 case note - TRA held that only three goods and services tax periods were properly before, and it had no jurisdiction to consider the periods.

[2015] NZTRA 06; TRA 028/08


The Taxation Review Authority ("TRA") held that only three goods and services tax ("GST") periods were properly before it.


The Commissioner of Inland Revenue ("the Commissioner") deregistered the objector for GST effective from 31 August 1995, and reassessed the objector for the three six-month periods prior to the date of deregistration.

The objector lodged objections that were determined against it in 2008, and the Points of Objection Notice was subsequently served on the Commissioner. The Points of Objection Notice was served out of time, however Judge Barber found extraordinary circumstances and granted an extension for its filing.

The objector argued that five earlier tax periods, namely income tax for 1984 to 1995 (inclusive) and GST from 1 September 1986 to 31 August 1995 (inclusive), were also before the TRA in this proceeding.

The objector contended that its notice of objection to five of the GST periods (the disputed periods) was never disallowed. The Commissioner argued that four of the objections were made within time and disallowed in October 1986, and no request was received for a case to be stated within the requisite time period. As to the period ended 28 February 1990, the Commissioner argued this period was never reassessed and so could not be objected to.

With regards to the remaining GST and income tax periods, the objector contended these were before the TRA because the TRA had all the powers of the Commissioner in regards to assessments. The Commissioner argued the TRA only had jurisdiction where the relevant procedural provisions had been complied with, and this had not occurred.


Disputed GST periods

The TRA accepted that the Commissioner reassessed the disputed GST periods and sent the objector notices of assessment. The objector wrote to the Commissioner acknowledging receipt of a "Notice of Assessment – Statement of Account" and gave notice of objection to the reassessments. The Commissioner argued these objections were subsequently disallowed and that the manager of the Tax Avoidance Unit wrote to the director of the objector ("the Director") on 30 October 1996 ("the Letter") advising of this and setting out the procedure if the objector wished to pursue its objections. No request was received from the objector for a case to be stated within the statutory period.

The Director deposed that the Letter was not received by the objector. The tax agent's evidence was that if the Letter had been received, a request would have been made for a case to be stated.

In early 2006, an Inland Revenue investigator started an investigation and on 10 April 2006 wrote to the Director advising of the status of the disputed GST periods, among other matters. The investigator later spoke with the Director, and sent a further letter dated 8 December 2006 enclosing copies of the letters of disallowance and advising that, as no case had been stated, the assessments for the disputed GST periods were confirmed and payment was overdue. No reply was received, and the investigator wrote to the Director again on 7 December 2007, enclosing a copy of the 8 December 2006 letter.

The TRA found the onus was on the objector to prove on the balance of probabilities that it did not receive the Letter. On the evidence, the TRA found on the balance of probabilities that the Letter was not received.

Despite the Commissioner having a copy of the Letter on file with a document log number assigned, there was no evidence of postage. The Commissioner could not therefore avail herself of the deemed receipt by post provision.

The TRA found there was no reason to disbelieve the Director's evidence regarding receipt of the Letter. The absence of a response by the objector to the investigator's 2006 letter denying receipt of the Letter was not of evidential value, especially given the 10-year gap. The Director's request for copies of the "letters of disallowance of objections" referred to in the letter of 10 April 2006 was consistent with the Letter not being received.

The Director's evidence that a Points of Objection Notice would have been issued if the Letter had been received was considered important, as such an approach was consistent with that taken by the objector to maintain its objection in respect of the GST deregistration and associated GST periods.

The TRA did not accept that even if the Letter was not received, notice was given in the Commissioner's later letters of 10 April 2006, 8 December 2006 and 7 December 2007, and subsequent correspondence. These letters were not held to be notification for the purposes of the relevant legislation.

However, the TRA disagreed with the objector's contention that the disputed GST periods were properly before the TRA, as the TRA had no jurisdiction where, as in this case, the objection procedure had not been properly completed.

All remaining GST periods and income tax years

The Director contended the Commissioner could and should have reassessed all the periods listed in the Points of Objection Notice before now, and that the TRA had the authority and duty to do so. Further, the Director contended the TRA had the authority to consider additional periods as the necessary procedural steps had been fulfilled "as best they can be by the objector in view of all the circumstances".

The TRA found the objection procedure had not been completed for the remaining GST periods and income tax years. As such, the objections in relation to these periods were not before the TRA and there was no jurisdiction to hear such matters.

The TRA also noted that a similar matter is currently back before the Commissioner for her reconsideration, following an order from Ellis J in the High Court. Leave was reserved in that case to bring the matter back before the High Court if progress was not made.

Goods and Services Tax Act 1985