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14 Oct 2016
Appeal Status
No right of appeal

The Commissioner’s refusal to accept a NOPA upheld by Taxation Review Authority and proceeding struck-out

2016 case note – CIR's refusal to accept a Notice of Proposed Adjustment (NOPA) upheld by Taxation Review Authority and proceeding struck-out.

TRA 007/16 [2016] NZTRA 12

Sections 89K and 138C Tax Administration Act 1994


The Commissioner of Inland Revenue (“the Commissioner”) can refuse to accept a late Notice of Propose Adjustment (“NOPA”) where the disputant is unable to satisfy the requirement of s89K of the Tax Administration Act 1994 (“TAA”).


This decision confirms the circumstances in which the Commissioner may refuse to accept a NOPA under s89K of the TAA.


The Commissioner applied, under s89K of the TAA, to strike out proceedings brought by the disputant challenging the Commissioner’s decision to refuse to accept a NOPA claiming a goods and services tax (“GST”) refund.

According to the disputant, the Commissioner, in a letter dated 27 April 2007, promised that $6,121.83, being the amount of the GST refund, would be released “as soon as possible”.

The Commissioner took the position that she made a disputable decision on 18 August 2007 to not make the refund.

The disputant issued a NOPA on 27 September 2011, requesting the refund.

On 21 December 2011 the Commissioner informed the disputant that the NOPA was invalid.

The disputant sought orders that its NOPA be declared valid and that the refund plus interest be made.


Date of disputable decision

The Taxation Review Authority (“the TRA”) agreed that the Commissioner’s letter dated 20 August 2007, declining to pay the refund was a disputable decision.

Whether the disputant can successfully challenge the Commissioner’s decision under s89K of the TAA

Exceptional circumstances

The TRA found that the disputant made no mention at any stage of any event or reason why he could not issue the NOPA within the required period, and that there is no evidence of any event or circumstance beyond the control of the disputant which would provide a justification for not issuing the NOPA within the required time period.

Demonstrable intention

It is for the disputant to show a demonstrable intention to enter into the disputes process and the TRA found that no steps were taken by the disputant to do so. The disputant’s threat to issue legal proceedings was found not to show a demonstrable intention.

As soon as reasonably practicable

The TRA found the four years delay in filing the NOPA to be “simply extraordinary” and there was no possible basis on which it could be found that the NOPA was issued “as soon as reasonably practicable”.

The TRA found the disputant unable to meet the requirements of s89K of the TAA and accordingly held that it has no reasonably arguable cause of action. On this basis the Commissioner’s application to strike out the proceedings was granted.

Furthermore, the TRA also granted the Commissioner’s application to strike out on the basis that the proceedings were not issued by the disputant within the statutory time period.

In respect of the disputant’s further grounds of opposition, the TRA held as follows:

S6 of the TAA and s27 of the New Zealand Bill of Rights Act 1990 (“NZBORA”) 1990

The TRA rejected the disputant’s submission that a strike out application is in breach of s6 of the TAA and s27 of the NZBORA. The TRA held that the Commissioner is entitled to bring a strike out application if she considers that grounds exist for doing so and that the disputant has the right to oppose the application.

TRA’s power to strike out challenge proceedings

The TRA held that it does have jurisdiction to hear and determine interlocutory applications, including strike out applications. The TRA stated that Regulation 4 of the District Court Rules applies to interlocutory steps and proceedings in the TRA as if those proceedings were civil proceedings in the District Court, and there is no inconsistency between the District Court Rules and the Regulations.