Preserving the constitutional function of courts and increasing confidence in the tax system : time to reconsider Futuris

Focusing on the discretionary power to amend an assessment at any time where the Commissioner is ‘of the opinion there has been fraud or evasion’, this article argues that the increasingly prevalent practice in the Federal Court of summarily dismissing judicial review applications not alleging either of the two jurisdictional errors identified by the plurality in Federal Commissioner of Taxation v Futuris Corporation Ltd is both apocryphal and repugnant to the rule of law. As will be shown, the current practice, together with the serious limitations inhering in the statutory scheme for overturning an excessive assessment, combine to render the tax practically incontestable, in turn reducing confidence in the tax system and striking an unfair balance between preserving the capacity of the Australian Taxation Office to collect legitimate income tax liabilities and taxpayers’ right to petition courts to overturn an assessment purportedly made beyond power.