Procedural fairness and non-assessing decisions of the Federal Commissioner of Taxation

This article aims to evaluate, from an administrative law dimension, the effect and application of the concept of procedural fairness as it relates to the Federal Commissioner of Taxation (“Commissioner”). An analysis of that concept will be undertaken so as to determine whether there is any scope for judicial review in relation to the non-assessing actions and conduct of the Commissioner. The emphasis will be on the reviewability of decision-making of the Commissioner that relates to the general administration of the Income Tax Assessment Act 1936 (Cth) (“ITAA36”). The analysis in this article will not focus on those decisions by the Commissioner that form an integral part of the assessment process, nor form part of that process dealing with an objection or an appeal against an assessment. The mechanics of that merit review process is covered under Pt IVC of the Taxation Administration Act 1953 (Cth) (“TAA”) and excluded from review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“ADJR Act”) by virtue of Sch 1 para (e) of that Act. Instead the focus of this article will be on those administrative decisions that may fall within the ambit of the ADJR Act. The Commissioner has a general administrative power, which is derived from s 8 of the ITAA36. The Commissioner accepts that the Australian Taxation Office (“ATO”) has been “given the important responsibility of administering the taxation system in order to collect the correct amount of tax payable under the law”. Furthermore the Commissioner has acknowledged that “we [ATO] are committed to exercising these powers, fairly and professionally and, as far as possible, in an open manner”. Indeed one of the central planks of the Taxpayers’ Charter, which came into effect from 1 July 1997, is that a taxpayer can expect the ATO to treat taxpayers fairly and reasonably. The use of terms such as “fairly” and “reasonably” is reflective of current good tax administration. However it is also reflective of the extension of the branch of administrative law entitled procedural fairness into tax administration.