Federal Court of Australia

EMH IV Pty Ltd as trustee for the EMH IV Family Trust v Commissioner of Taxation [2026] FCAFC 112

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    This is an appeal from the decision of the primary judge in EMH IV Pty Ltd as trustee for the EMH IV Family Trust v Commissioner of Taxation [2025] FCA 1429 (the Primary Judgment or PJ). The primary judge dismissed the application brought by EMH IV Pty Ltd (EMH) for review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) of a decision of a delegate of the Commissioner of Taxation (the Delegate and Commissioner, respectively) of 17 December 2024 (the Decision). The Decision was made pursuant to s 8AAG of the Taxation Administration Act 1953 (Cth) (TAA53), in which the Delegate refused to remit the general interest charge (GIC) that was said to have accrued upon EMH’s income tax liability between 7 June 2016 and 16 December 2024.

2    In effect, the Decision was based on the propositions that: (a) EMH was obliged to lodge an Income Tax Return for the year ended 30 June 2015 (the 2015 Return) by 15 May 2016; (b) EMH lodged the 2015 Return on 7 June 2016; (c) there was no good reason for its failure to lodge the 2015 Return by 15 May 2016; (d) EMH did not make any application for an extension of time in which to lodge its return; and (e) there was no basis upon which to remit the GIC that had accrued. At the heart of EMH’s case is the proposition that the date on which it was obliged to lodge the 2015 Return was 5 June 2016, rather than 15 May 2016.

3    It should be noted at the outset that 15 May 2016 and 5 June 2016 were Sundays, and 6 June 2016 was “Western Australia day”. It is common ground between the parties that those days are not to be counted for the purposes of determining the time by which the 2015 Return was to be lodged with the Commissioner. We will therefore follow the convention adopted by the primary judge of referring to “[16] May 2016”, being the first business day after 15 May 2016, in place of 15 May 2016, and I refer to “[7] June 2016”, being the first business day after 5 June 2016, in place of 5 June 2016.

Salient Facts

4    EMH is the trustee of the EMH IV Family Trust (the Trust). On or about 7 June 2016, EMH, in its capacity as trustee of the Trust, lodged the 2015 Return with the Commissioner, stating that EMH had nil tax to pay.

5    The taxation liabilities of EMH and its associates for the 2015 income tax year have since been scrutinised by the Commissioner, as well as by the Court: see Hyder v Commissioner of Taxation [2024] FCA 464 (Thawley J) (Hyder) . Following an audit into the affairs of EMH, the Commissioner determined that EMH, as trustee of the Trust, had a tax shortfall in the 2015 year, and issued it with a notice of assessment on 20 May 2020 which assessed its income tax in the amount of about $9 million: PJ at [8]. The Commissioner contends that that amount was payable by [7] June 2016, being 21 days after the date upon which the Commissioner claims EMH was required to lodge the 2015 Return. It is common ground that EMH did not pay the amount assessed by that date.

6    On 24 March 2023, EMH wrote to the Commissioner to seek the remission of the GIC that was said to have accrued upon its income tax liability from 7 June 2016. The Commissioner denied that request on 14 November 2023 (see Hyder at [89]–[93]). That determination was set aside, and the request for remission of GIC was remitted to the Commissioner (see Hyder at [109], [111]).

7    On 2 August 2024, EMH wrote to an officer of the Australian Taxation Office (the ATO), asserting that:

(a)    it was required to lodge the 2015 Return with the Commissioner by [7] June 2016;

(b)    it had lodged the 2015 Return within the prescribed timeframe; and

(c)    therefore, the GIC upon its unpaid 2015 income tax liability ought only to have run from 10 June 2020 (being 21 days after EMH was provided with the notice of assessment of 20 May 2020) because of the operation of subs 5-5(6) of the Income Tax Assessment Act 1997 (Cth) (ITAA97).

8    On 11 October 2024, the Deputy Commissioner of Taxation determined that the circumstances did not warrant a full remission of the GIC, but granted a partial remission of $4,478,456.85. That determination relevantly comprised the following conclusions:

(a)    the refusal of a full remission for GIC imposed from 7 June 2016 to 10 June 2020;

(b)    the grant of partial remission of GIC in the amount of $1,701,961.48; and

(c)    the grant of full remission for GIC imposed from 21 April 2023 to 11 October 2024 in the amount of $2,776,495.37.

9    EMH responded promptly, taking issue with the first of those conclusions by contending that the date required by the Commissioner for lodgment of EMH’s 2015 Return (being a nil return lodged by a trustee via its tax agent) was 7 June 2016, which was met, and the due date for payment of the income tax under the original assessment of 20 May 2020 was 21 days after notice of that original assessment, being 10 June 2020, pursuant to subs 5-5(6) of the ITAA97.

10    The Decision was communicated to EMH on 17 December 2024. It set out EMH’s contentions as follows:

•    You believe for the 2015 Income Tax Return (ITR), where trustees are under a registered tax agent programme and have nil tax payable, the ITR was required to be lodged on the first business day 21 days after 15 May 2016, being 6 June 2016.

…

•    You believe under subsection 5-5(5) of the ITAA 1997, your 2015 Income Tax Return was lodged by your tax agents on the date required by the Commissioner for trustees, 7 June 2016.

•    You believe subsection 5-5(6) of the ITAA 1997 applies, with payment of your 2015 Income Tax Return due on 10 June 2020, being 21 days after the Commissioner provided an original notice of assessment.

•    The 2015 ITR was lodged on 7 June 2016 with no failure to lodge (FTL) penalty charged. You believe if the Commissioner maintains the position that the lodgment due date was 15 May 2016 then the Commissioner deliberately encouraged your tax agent to lodge after that date as no failure to lodge penalty was charged.

11    The Delegate addressed those contentions as follows:

1.    You are eligible for the registered tax agent lodgment concession of 15 May 2016 for the 2015 Income Tax Return.

2.    For the 2015 Income Tax Return, the lodgment due date of 5 June 2016 is for entities who were non-taxable or received a credit assessment in the latest year lodged and are actually non–taxable or receiving a credit assessment in the current year. At 7 June 2016, the latest year lodged was the 2014 Income Tax Return lodged on 16 October 2015, where you were non-taxable and had a nil outcome payable, thus not a credit outcome. In relation to the 2015 Income Tax year you have not provided information to substantiate that you were a non-taxable entity.

3.     There are no records of any inbound contact from your tax agents on or around the 6 June 2016 in relation to seeking a deferral for yourself or your individual trustees. We acknowledge receipt of deferral requests received for other clients on and around 6 June 2016, provided via the tax agent portal. As a deferral was not sought or granted, subsection 5-5(6) of the ITAA 1997 does not apply as the return was not lodged on or before the due date of 15 May 2016.

4.     For the reasons above the GIC has correctly accrued from 7 June 2016 being 21 days after the payment date [which the primary judge treated as an obvious error for the lodgment date: PJ [110]] of 15 May 2016. You have not provided reasons satisfactory to the Commissioner that the delay was not caused by your acts or omissions and you took reasonable steps to mitigate the delay. On this occasion a remission has not been granted.

5.     In relation to the FTL penalty, as per PSLA 2011/19 an FTL penalty is applied either automatically, or manually in cases which are excluded from the automated system. On this occasion an FTL penalty has not been charged, however this does not mean that the lodgment was completed on time.

12    The primary judge summarised the effect of the reasoning in the Decision (PJ at [31]) as follows:

(1)    EMH was required to lodge the 2015 Return with the Commissioner by [16] May 2016 – in this context, the decision-maker identified that EMH had not established, in relation to the 2015 income tax year, that it was, in fact, a non-taxable entity or that it had sought a deferral (or a deferral had otherwise been granted) in which it was to lodge the return.

(2)    the date upon which EMH’s income tax was due and payable was [7] June 2016 (being 21 days after [16] May 2016, and EMH not having lodged the 2015 Return in time: ss 5-5(5) – (6) of the ITAA97) – as a necessary corollary, GIC would begin to accrue upon EMH’s income tax liability for the 2015 year that had not been paid by that date.

(3)    the Delegate had not formed the requisite state of mind under ss 8AAG(3) – (5) of the TAA53 and, thus, determined not to remit the GIC that had accrued since 7 June 2016.

13    On 21 March 2025, EMH filed an application for review of the Decision under the Administrative Decisions (Judicial Review) Act 1977 (Cth). On 4 June 2025, EMH filed an amended application (the Application).

Legislative provisions

14    Part IIA of the TAA53 is entitled “The general interest charge” and explains how to work out the GIC on an amount (s 8AAA). A person will be liable to pay GIC if an amount that the person must pay to the Commissioner is not paid on time (s 8AAA). GIC will accrue on any income tax that is not paid within the timeframe specified by s 5-5 of the ITAA97 (subss 8AAB(1), (4); s 5-15 of the ITAA97).

15    The Decision was made pursuant to s 8AAG of the TAA53, which provides as follows:

8AAG Remission of the charge

(1)     The Commissioner may remit all or a part of the charge payable by a person.

(2)     However, if a person is liable to pay the charge because an amount remains unpaid after the time by which it is due to be paid, the Commissioner may only remit all or a part of the charge in the circumstances set out in subsection (3), (4) or (5).

(3)     The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that:

(a)     the circumstances that contributed to the delay in payment were not due to, or caused directly or indirectly by, an act or omission of the person; and

(b)     the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances.

(4)     The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that:

(a)     the circumstances that contributed to the delay in payment were due to, or caused directly or indirectly by, an act or omission of the person; and

(b)     the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; and

(c)     having regard to the nature of those circumstances, it would be fair and reasonable to remit all or a part of the charge.

(5)     The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that:

(a)     there are special circumstances because of which it would be fair and reasonable to remit all or a part of the charge; or

(b)     it is otherwise appropriate to do so.

16    The primary judge noted (PJ at [18]) that it is important to bear in mind that if a person is liable to pay GIC because some amount remains unpaid after the time by which it is due to be paid, the Commissioner must be satisfied of the matters in subs 8AAG(3), (4) or (5) before remitting “all or part of the charge” (such matters directing attention to, for instance, “whether the taxpayer has taken reasonable action to mitigate, or to mitigate the effects of, the circumstances that contributed to delay in payment”: Quach v Commissioner of Taxation (2019) FCA 1729 at [37]).

17    The time when income tax is due and payable for any given financial year is determined by s 5-5 of the ITAA97, which provides as follows:

5-5 When income tax is payable

Scope

(1)     This section tells you when income tax you must pay for a *financial year is due and payable.

Note:     The Commissioner may defer the time at which the income tax is due and payable: see section 255-10 in Schedule 1 to the Taxation Administration Act 1953.

(2)     The income tax is only due and payable if the Commissioner makes an *assessment of your income tax for the year.

(3)     However, if the Commissioner does make an *assessment of your income tax for the year, the tax may be taken to have been due and payable at a time before your assessment was made.

Note:     This is to ensure that general interest charge begins to accrue from the same date for all like entities. General interest charge on unpaid income tax is calculated from when the tax is due and payable, not from when the assessment is made: see section 5-15.

Original assessments—self-assessment entities

(4)     If you are a *self-assessment entity, the income tax is due and payable on the first day of the sixth month after the end of the income year.

Example: If your income year is the same as the financial year, your income tax would be due and payable on 1 December.

Original assessments—other entities

(5)     If you are not a *self-assessment entity, the income tax is due and payable 21 days after the day (the return day) on or before which you are required to lodge your *income tax return with the Commissioner.

Note:     For rules about income tax returns and when they are due, see Part IV of the Income Tax Assessment Act 1936.

(6)     However, if you lodge your return on or before the return day and the Commissioner gives you a notice of *assessment (other than an amended assessment) after the return day, the income tax is due and payable 21 days after the Commissioner gives you the notice.

Note:     For rules about income tax returns and when they are due, see Part IV of the Income Tax Assessment Act 1936.

(7)    If the Commissioner amends your *assessment, any extra income tax resulting from the amendment is due and payable 21 days after the day on which the Commissioner gives you notice of the amended assessment.

Note:     Shortfall interest charge may be payable, on any amount of extra income tax payable as a result of the amended assessment, for each day in the period that:

(a)    starts at the time income tax was due and payable on your original assessment; and

(b)    ends the day before the day on which the Commissioner gives you notice of the amended assessment.

18    The primary judge noted that subss 5-5(2) and (3) of the ITAA97 have a related operation: PJ at [20]. Subsection (2) identifies that the precondition to a liability to pay income tax in respect of a given year is that the Commissioner has made an “assessment” of tax for that year. The primary judge said that, although that might appear to have a prospective operation, subs (3) provides that the liability to make a payment in respect of an assessment may arise at a time prior to the assessment being made: PJ at [20]. The primary judge said that the purpose of that scheme is sufficiently self-evident, and it was explained in the Explanatory Memorandum to the Tax Laws Amendment (Transfer of Provisions) Bill 2010 as follows:

Income tax payability dependent on assessment

2.24    The Commissioner currently interprets the law as making income tax due and payable only once income tax has been assessed. That is, an assessment is required before any income tax can be due and payable. Whilst that conclusion is not clear from the law itself, the High Court of Australia agreed with this view in considering the application of the law to full self-assessment cases (typically, companies, superannuation trustees and first home saver account providers). The High Court has not considered the application of this law to non-full self‑assessment cases.

2.25    The rewrite makes that result clear for both full self-assessment and non-full self-assessment cases. This change to the text of the tax law is consistent with the way the Commissioner already administers the tax law and the context in which the Act operates. [Schedule 1, item 3, subsections 5-5(2) and (3) of the ITAA 1997]

2.26    Once an assessment has been made by the Commissioner, the income tax assessment is due and payable in accordance with the general rules. In order to ensure that the law applies equally to all taxpayers the due and payable date might be treated as having occurred before the assessment was made. Setting a fixed due and payable date (which might be before an assessment) facilitates the correct calculation of interest charges for taxpayers who fail to lodge income tax returns within the required timeframes. [Schedule 1, item 3, subsection 5-5(3)]

(Emphasis added).

19    The primary judge also noted that the expression “self-assessment entity” is defined by s 995-1 of the ITAA97, to bear the meaning that is given to a “full self-assessment taxpayer” by subs 6(1) of the Income Tax Assessment Act 1936 (Cth) (ITAA36), namely:

(a)    a company;

(c)    the trustee of a trust that is a public trading trust in relation to the current year for the purposes of Division 6C of Part III;

(d)    the trustee of a complying approved deposit fund or a non-complying approved deposit fund in relation to the current year;

(e)    the trustee of a complying superannuation fund or a non-complying superannuation fund in relation to the current year;

(f)    the trustee of a pooled superannuation trust in relation to the current year.

20    It is common ground that EMH was not a self-assessment taxpayer for the 2015 year.

21    Part IV of the ITAA36 contains various provisions about income tax returns and when they are due. Relevantly, subs 161(1) of the ITAA36 provides that:

(1)    Every person must, if required by the Commissioner by legislative instrument, give to the Commissioner a return for a year of income within the period specified in the instrument.

Note:     The Commissioner may defer the time for giving the return: see section 388-55 in Schedule 1 to the Taxation Administration Act 1953.

22    The issues at the heart of the present dispute turn on the construction of a document issued by the Commissioner entitled “Tax agent lodgment program 2015–16” (TALP). The TALP details the concessional lodgment due dates provided to registered agents during the 12 months ending 30 June 2016, and allows tax agents to undertake their work in an orderly manner over a 12-month period, rather than requiring all tax returns to be lodged at around the same time (such as by the usual date of 31 October 2015). Although the primary judge referred to the TALP as a “legislative instrument” (PJ at [26]), it is common ground that that was strictly speaking not correct, although nothing turns on the point in the present appeal. As indicated above, a tax return must be lodged pursuant to subs 161(1) of the ITAA36 within the period specified by legislative instrument. The Commissioner has power under s 388–55 in Sch 1 to the TAA53 to defer the time for lodgment. The TALP is an instance of the Commissioner exercising his power to defer the time for lodgment under s 388–55 by providing concessional lodgment dates. That characterisation of the TALP is consistent with the treatment of lodgment programs by the Full Court in Balnaves v Deputy Federal Commissioner of Taxation (1985) 8 FCR 589 at 591, in which the Full Court held in respect of an earlier form of subs 161(1) of the ITAA36 that a circular informing tax agents of alternative lodgment arrangements was “a statement of a decision made by the Commissioner extending time for the lodgment of tax returns in respect of the clients of registered tax agents, subject to compliance with the requirements of the circular”.

The reasoning of the primary judge and the terms of the TALP

23    The primary judge (at [32]) summarised the effect of the issues raised by the Application by way of four main contentions on the part of EMH:

(a)    the Delegate had incorrectly identified [16] May 2016 as the date of lodgment of the 2015 Return when in fact the return day was 21 days after 15 May 2016, being [7] June 2016 for taxpayers like EMH who lodged returns showing nil tax to pay;

(b)    the Delegate had erred in identifying the due date for payment of EMH’s 2015 income tax liability by reference to subs 5-5(5) of the ITAA97;

(c)    the Delegate had erred in fact and law in deciding that the [7] June 2016 return day was for taxpayers who not only lodged nil tax returns but were also “actually non-taxable” and had to substantiate that fact; and

(d)    the Delegate irrelevantly considered that EMH had not made an application for an extension of time for lodgment of its tax return.

24    The primary judge identified the fundamental issue as being when EMH was to lodge the 2015 Return, and said that a foundational plank of EMH’s case was that it lodged the 2015 Return in accordance with the timeframes prescribed by the Commissioner in the TALP, such that any liability to pay income tax and GIC could only arise 21 days after receipt of the notice of assessment on 20 May 2020: PJ at [34].

25    The primary judge said that the TALP is an instrument which is not the product of a legislative draftsman, and was not a paragon of drafting: PJ at [35]. The primary judge said that the TALP should be construed bearing in mind that it will not have been drafted with the same care as an Act of Parliament, citing Day v Harness Racing (NSW) [2014] NSWCA 423; (2014) 88 NSWLR 594 at [79]–[81] (Leeming JA, with whom McColl and Macfarlan JJA agreed); and Environment Protection Authority v Condon as liquidator for Orchard Holdings (NSW) Pty Ltd (in liq) [2014] NSWCA 149; (2014) 86 NSWLR 499 at [44]–[45] (Leeming JA, with whom Bathurst CJ and McColl JA agreed). The primary judge also cited Mr Perry Herzfeld and Mr Thomas Prince’s treatise Interpretation (3rd ed, 2024, Thomson Reuters) at [14.40] to the effect that in such a case, a more liberal approach may be warranted so as to avoid anomalies, and there may be a greater willingness to correct obvious drafting mistakes.

26    The primary judge referred (PJ at [37]) to the introductory section of the TALP (p 1) where the following appears:

Abstract:

The Lodgment program 2015-16 details the concessional lodgment due dates provided to registered agents during the 12 months ending 30 June 2016.

The Lodgment program 2015-16 details the concessional lodgment due dates you receive as a registered agent during the 12 months ending 30 June 2016.

•    About the Lodgment program 2015-16

•    Obligation type

•    Tax returns by client type

•    Situations where we request lodgment

•    Lodgment and payment dates on weekends or public holidays

•    Safe harbour

The subject headings adjacent to the bullet points are (hyperlinked) references to the sequential sections of the program.

27    The primary judge then quoted the abstract on p 2 as follows:

The Lodgment program [i.e., the TALP] details the concessional lodgment due dates provided to registered agents. Dates are arranged by the type of tax obligation and, for tax returns, by the type of client.

28    Appearing under the heading, “Tax returns by client type” (p 27), is the following:

The end dates for lodging tax returns are dependent on the type of client. This section provides a summary of lodgment end dates for the major client types.

29    The primary judge said that it was important to acknowledge that that statement adopts the language of “lodgment end dates”, as referring to the date upon which various “major client types” are to lodge their tax return with the Commissioner: PJ at [41].

30    The primary judge referred (PJ at [42]) to the first subsection that appears under the heading, “Tax returns by client type”, being “Individuals and trusts” (the I&T Section) (pp 28–30). The primary judge observed that the section is organised by reference to “key dates” that fall within three sub-sections, being lodgment end dates, concession for 15 May 2016, and payment. The abstract to the I&T Section states:

Factors that may affect the lodgment end dates for individuals and trusts include their lodgment and compliance history, their income, whether they are new registrants and whether the 5 June concession applies.

31    The primary judge said that the reference to “lodgment end dates” is important and can be related to the use of that expression previously in the program as referring to the date upon which a relevant taxation return is to be lodged: PJ at [43]. The primary judge said that that understanding is supported by the heading to the first subsection: “Lodgment end dates” (the I&T Lodgment End Dates Subsection) (p 28). Under that heading appear the words:

The lodgment end dates for individuals and trusts are detailed in the following table:

32    The table has two columns. The first is headed “Lodgment end date” and the second is headed “Entity description”. Under those headings are rows with a date and corresponding description of the characteristics of the entities to which the date applies. The first of the dates is 31 October 2015, and the last row of the table states as follows in relation to the sixth such date:

33    The primary judge said that it seemed to be beyond serious argument that the table operated to identify the dates by which the respectively identified group of taxpayers were required to lodge their tax return: PJ at [45]. As to the description of the individuals and trusts permitted to lodge their tax return on [16] May 2016, the primary judge said that, read literally, it encompasses those entities that, first, do not possess the characteristic identified in the earlier rows of the table and, second, are not eligible for the 5 June concession. The primary judge said that the phrasing of the second criterion was important to EMH’s case in so far as it suggests that, first, the lodgment end date for an entity which is not “not eligible for the 5 June concession” cannot be [16] May 2016, and second, some other lodgment end date must apply for such entities. By contrast, the primary judge said that the Commissioner’s submission was to the effect that the word “not”, when used in relation to those taxpayers that were “eligible for the 5 June concession”, was infelicitous language and that [16] May 2016 remained the lodgment end date for them. The primary judge said that, as his Honour’s later discussion disclosed, the Commissioner’s submission was probably correct: PJ at [47].

34    The primary judge noted that no submission was made by either party relating to the congruency between the reference to taxpayers, “not eligible for the 5 June concession” in the aforementioned table and the fact that the abstract to the I&T Section of the TALP indicated that lodgment end dates may be affected by, inter alia, “whether the 5 June concession applies”. The primary judge said that, prima facie, there exists a supportable construction of the table to the effect that the [16] May 2016 lodgment end date is applicable to those individuals and trusts (including new registrants) which are not the subject of other identified lodgment end dates, and which are not eligible for the “5 June concession”: PJ at [48]. In the latter respect, the primary judge said that it was possible that the identification of the class of taxpayers entitled to lodge as late as 15 May 2016 had been defined, in part, by reference to the eligibility to the relevant concession. However, the primary judge said that for EMH to succeed, it would be necessary for it to establish that some other provision of the TALP provided it with an extended date on which to lodge its return. In the absence of such, an individual or trust, eligible for the 5 June concession, would have been required to lodge their return by the standard date of 31 October 2015.

35    The next part of the I&T Section is headed, “Concession for 15 May 2016” (the I&T Concession Subsection). That “concession” is described as follows (at pp 28–29):

We allow lodgment of tax returns past the lodgment due date of 15 May for:

•    individuals

•    partnerships

•    trusts.

The concession allows these tax returns to be lodged by 5 June without penalty, provided that any payment required is also made by this date.

This is a concessional arrangement to remit the FTL penalty, where lodgment and payment are made by 5 June for tax returns otherwise due by 15 May 2016.

You do not need to apply for a deferral to receive the 5 June concession date – however, you must apply if you need a lodgment deferral beyond 5 June for these clients.

(Emphasis in original).

36    The I&T Concession Subsection was relied on by EMH to assert that the date by which it was required to lodge the 2015 Return was [7] June 2016 by reason of the language “[W]e allow lodgment of tax returns past the lodgment due date of 15 May …” and “[T]he concession allows these tax returns to be lodged by 5 June without penalty …”. The primary judge said that, when read in context, that language meant simply that individuals and trusts will, in certain instances, be entitled to a remission of the Failure to Lodge (FTL) penalty that would otherwise be imposed by reason of their failure to lodge a return on time (Div 286, Sch 1 of the TAA53): PJ at [51].

37    The primary judge said (PJ at [52]) that the context to the I&T Concession Subsection includes the statement:

This is a concessional arrangement to remit the FTL penalty, where lodgment and payment are made by 5 June for tax returns otherwise due by 15 May 2016.

38    The primary judge said (PJ at [53]) that a similar statement is made in the table in the I&T Concession Subsection (in the entry adjacent to the “Lodgment date” of 5 June 2016):

Note: This is not a lodgment end date, but a concessional arrangement where penalties will be waived if lodgment and payment are made by this date.

(Emphasis in original).

39    The primary judge said (PJ at [54]) that those statements as to the nature of the concession contain the following important elements. First, and most importantly, the concession is, by its terms, designed to remit an administrative penalty which is imposed, in general terms, where the taxpayer is required under a taxation law to give a return to the Commissioner in the approved form by a particular day and does not do so (subs 286-75(1) of Sch 1 of the TAA53). In that context, the primary judge said that the concession created by the I&T Concession Subsection presumes that lodgment of the relevant return has not occurred within time. Indeed, the primary judge said that if the concession were to extend the lodgment end date to the 2015 Return to [7] June 2016, it is difficult to see how there would ever be any FTL penalty to remit if “lodgment and payment are made by 5 June” (that is, if the conditions for the concession were satisfied). In that sense, the primary judge said that the express purpose of the concession would be made redundant. Further, the primary judge said that that understanding appears to be picked up by the unequivocal statement that 5 June 2016 is not a lodgment end date. Second, the primary judge said that the concession applies to entities whose return is “otherwise due by 15 May 2016”, which reinforces the idea that the entities to which the concession applies have that date as their lodgment end date. Indeed, the primary judge said that it is entirely consistent with the statements extracted above to read the I&T Concession Subsection as (a) making no reference to, or alteration of, the lodgment end date for the 2015 Return; and (b) “allow[ing]” taxpayers to lodge their return “by” [7] June 2016 without fear of incurring a penalty (which would otherwise have accrued by virtue of their failure to lodge the return in compliance with the lodgment end date), provided the relevant tax is paid by then.

40    The primary judge also noted (PJ at [55]) that the table in the I&T Concession Subsection does not use in the header the phrase “lodgment end date”; rather, it identifies 5 June 2016 as the “lodgment date”. The primary judge said that the first expression is easily identified as the date on which a tax return is to be lodged, and prima facie it follows that use of a second and different expression in the header of the table in the I&T Concession Subsection might be understood to be an attempt to convey a meaning which is different to “lodgment end date”. The primary judge said that so much is made clear by the express language of the table which includes the note that “This [5 June 2016] is not a lodgment end date”: PJ at [55].

41    The primary judge then noted that the meaning which his Honour had attributed to the phrase “lodgment end date” is supported by reference to that part of the I&T Section which is concerned with “Payment” (pp 29–30), where reference is made to clients with a “lodgment end date of 15 May 2016” and some consideration is given in relation to the payment of any tax by reference to when the return is actually lodged with the Commissioner: PJ at [56].

42    The primary judge said that the conclusion that the concession created by the TALP does not otherwise confer an extension of time in which to lodge a return is supported by, inter alia, reference to the entities which might take advantage of it: PJ at [57]. The table identifies two groups and, with respect to each, a required characteristic is that they have “a lodgment end date of 15 May 2016”. The primary judge said that that sits comfortably with the notion that all the 5 June concession does is provide a remission of the FTL penalty that would otherwise have accrued if the relevant taxpayer lodges their return by [7] June 2016. In a later passage, the primary judge said that the Delegate erred in stating that those entitled to the 5 June concession had to lodge their returns by [7] June 2016, rather than [16] May 2016: PJ [109]. However, the primary judge said that that error was entirely inconsequential because the Delegate correctly said that EMH was not entitled to the concession, citing LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12; (2024) 280 CLR 321: PJ [109].

43    The primary judge said that, ultimately, it is difficult to regard the concession as effecting anything other than the remission of penalty: PJ at [58]. To construe it as an extension of time in which to lodge a return would be contrary to the express explanatory statement of what the concession did. The primary judge said that it follows that no additional extension of time in which to lodge the 2015 Return was provided for those entities that were entitled to the 5 June concession under the I&T Concession Subsection of the TALP: PJ at [58].

44    The primary judge then returned to the question of what to make of the reference in the table in the I&T Lodgment End Dates Subsection to entities not “not eligible for the 5 June concession”. On its face, the primary judge said that it appears to contemplate that some other lodgment end date would be assigned to those entities, but that does not occur in the I&T Concession Subsection: PJ at [59]. The primary judge said that, although there might be some inconsistency, to the extent that the document can be rendered harmonious and consistent, it is by concluding that the relevant entities were required to lodge their tax returns with the Commissioner by the standard date of 31 October 2015. If they did not do so and instead lodged the return (and paid any tax) by [7] June 2016, they would be entitled to a remission of the FTL penalty that had accrued: PJ at [59].

45    The primary judge then drew a comparison with another part of the TALP dealing with “Super lodgment obligations” (pp 22–26) (the Superannuation Obligation Section): PJ at [60]. In that section, lodgment end dates are established for superannuation providers and employers with superannuation obligations. In a manner similar to the I&T Lodgment End Dates Subsection, a table exists that details the lodgment due dates for an array of superannuation-associated obligations.

46    The last three rows of that table are as follows (p 24):

(Emphasis in original).

47    The primary judge observed that the description of funds adjacent to the lodgment due date of 15 May 2016 (ie the first operative row of the table) has characteristics similar to those in the table in the I&T Lodgment End Dates Subsection which are accorded a “lodgment end date” of 15 May 2016: PJ at [62]. First, it excludes taxpayers who have been ascribed some earlier date and, second, it excludes funds eligible for the 5 June lodgment concession date. However, in the Superannuation Obligation Subsection, there is in fact a “5 June 2016” “lodgment due date” for the tax returns of certain superannuation funds (ie the third operative row of the table). The primary judge said that it is difficult to speculate why the table in the I&T Lodgment End Dates Subsection does not have a 5 June lodgment end date and the Superannuation Obligation Section does. On one view, the primary judge said that it may be thought that the I&T Section was intended to adopt the same arrangement as appears in relation to superannuation lodgment obligations. Any force in that view, however, is greatly diminished by the express statement that the concession for trusts and individuals was “not a lodgment end date”, but a concession in relation to FTL penalties: PJ at [62]. The primary judge said that that same indication eschewing the creation of a new lodgment end date does not appear in relation to superannuation trusts. More importantly, the primary judge said that in the section under consideration, there is no creation of a “5 June 2016” lodgment end date. The primary judge said that, although there are some similarities between the two sections, the differences sufficiently show that different outcomes were intended: PJ at [63]. Indeed, the primary judge said that the comparison only tends to reinforce the view that no extension to the lodgment end date was intended in the I&T Section.

48    The primary judge dealt with a further argument by EMH to the effect that, although the Commissioner had power to identify a time for lodgment of the tax returns by individuals, he had no power to provide a “loose concessionary arrangement” that does not absolve the taxpayer from their duties under the statutory taxation regime: PJ at [65]. It thus appeared to be submitted that the TALP should be read as an extension of time in which to lodge a tax return because, so it was submitted by EMH, the Commissioner had no lawful power to provide a concession with respect to the FTL penalty. The primary judge rejected that argument as appearing to craft a binary choice where none existed: PJ at [66]. The primary judge said that the TALP deliberately extended the lodgment end dates for a number of classes of taxpayers, and there is no doubt about its validity in that sense. By the I&T Concession Subsection, the Commissioner purported to provide a remitter of the FTL penalty. The primary judge said that if the concession was invalid, it does not therefore mean that it should be read as an additional extension of time in which to lodge: PJ at [66]. Rather, the primary judge said that in that event it should be read as a failed attempt to create a remitter in some circumstances, and if it is beyond the power of the Commissioner, then it is ineffective. However, the primary judge said that that does not mean that it ought to be read as being something other than what it was plainly intended to be: PJ at [66].

49    The primary judge then expressed the conclusion that, when read in context, the terms of the I&T Concession Subsection do not extend the lodgment end date to [7] June 2016 for any taxpayer in the I&T Section. Instead, all that was provided by that subsection was for the remission of an administrative penalty that had accrued in relation to those taxpayers who had lodged their tax return out of time (and satisfied defined criteria): PJ at [68].

50    The primary judge then turned to the question whether, in any event, EMH is an entity to which the 5 June concession could reasonably apply. The primary judge found that, even if the TALP could be construed as somehow extending the date on which certain entities might lodge their returns, it would not assist EMH for it does not fall within the two classes of entities to which the relevant concession applies: PJ at [69].

51    In relation to the first group of entities, their required characteristics are that they:

(1)    were non-taxable or received a credit assessment in the latest year lodged;

(2)    are actually non-taxable or receiving a credit assessment in the current year (unless due earlier);

(3)    are an entity with a lodgment end date of 15 May 2016; and

(4)    are not large/medium taxpayers or head companies of consolidated groups.

52    In relation to the second group of entities, their required characteristics are that they:

(1)    are individuals, partnerships or trusts;

(2)    have a lodgment end date of 15 May 2016; and

(3)    have made payment of their tax liability by 5 June 2016.

53    The primary judge said that an important characteristic of the entities which might take advantage of the relevant concession are those which have no liability to the Commissioner after 5 June 2016: PJ at [72]. In relation to the first group of entities, they will satisfy that criterion if they are “actually” non-taxable or will be receiving credit in the current year. In relation to the second group, although they will be taxable in the current year, the concession will apply so long as they have paid their tax liability by the required date.

54    In the present case, it was not in dispute that EMH’s tax liability to the Commissioner was about $9m for the 2015 tax year and that EMH had not paid that amount by 5 June 2016 (or anytime thereafter until its dispute as to its liability to pay was resolved (see Hyder v Federal Commissioner of Taxation [2023] FCAFC 29): PJ at [73]. The primary judge referred to the claim by EMH that it had paid its tax liability (being a “nil” amount) within the required time (so as to fall within the second group of entities identified above) and, in any event, was “actually non-taxable” at all relevant times (so as to fall within the first group). This was said to be because, for the purposes of the TALP and s 5-5 of the ITAA97, if a registered tax agent lodges a return that shows their client has a nil liability for tax, then the taxpayer will have no liability to pay tax and is “actually non-taxable”, even if the Commissioner later assesses them to be liable for an amount: PJ at [73].

55    The primary judge referred to that as raising a difficult question as to whether the outstanding liability is to be defined by the taxpayer or by the Commissioner: PJ at [76]. The primary judge said that both understandings could reasonably be seen to render unpalatable results. On the first view, taxpayers who lodge a tax return within 21 days of the defined day and assert a “nil” tax liability would always be within the ambit of the concession, whereas, on the second view, taxpayers who lodge a tax return within 21 days of the defined day and genuinely asserted liability that is subsequently assessed to be less than what it is in fact owed, would fall beyond the ambit of the concession. The primary judge said that, when regard is had to the language and purpose of the concession, the second understanding is to be preferred: PJ at [76]. Effect must be given to the expression “actually” before the words “non-taxable” in the first paragraph of the second row of the table in the I&T Concession Subsection, which conveys on an objective reading an intention to eschew any argument that a taxpayer is non-taxable in the relevant year merely because their agent lodges a nil tax return: PJ at [76]. The primary judge said, whilst the language of the second paragraph (“provided payment is also made by this date”) is more ambiguous, when it is understood as comprising a pre-condition to a concession from liability that would otherwise be imposed (ie the FTL penalty), it is more coherent for the Commissioner to be charged with an assessment of whether it has been satisfied in any given case (that is, to decide whether any such payment discharges, in fact, the relevant taxpayer’s income tax liability for a given income year): PJ at [76]. On that basis, and accepting that EMH’s actual tax liability for the 2015 year was greater than nil, the primary judge said that it was unclear how EMH fell within either group of entities to which the concession applies: PJ at [77].

56    EMH also sought to rely on a construction of subss 5-5(5)–(6) of the ITAA97 to the effect that it fell within the characterisation “actually non-taxable” as it was, at least on its submission, only obliged to satisfy its taxation liability 21 days after receipt of the notice of assessment. The primary judge said that that appears to rely on subs 5-5(6), but said that how that can be is unclear in circumstances where the essential integer upon which that section operates (namely, that the taxpayer lodges their “return on or before the return day”) was not satisfied. In the present case, that date was not later than [16] May 2016 and it is accepted that EMH did not lodge the 2015 Return before then: PJ at [78].

57    The primary judge said that, that being so, subs 5-5(5), which is applicable here (noting that EMH was not a self-assessment entity), renders the relevant taxation liability due and payable 21 days after the day upon which the taxpayer was required to lodge its return: PJ at [79]. The primary judge said that subs 5-5(5) is not concerned only with cases where the return was relevantly lodged within that time, and it applies where the taxpayer has either lodged the return late or failed to lodge it at all. The primary judge said that the touchstone of the obligation to pay is the date upon which the taxpayer is “required to lodge” the return, and that which must be paid is the income tax for which the taxpayer is liable: PJ at [79]. The primary judge said there is nothing in the section that suggests that the liability is in respect of that which the taxpayer claims they are to pay, and the section is not concerned with the amount which the taxpayer puts in their return, but with the actual “income tax” liability, being the amount which the Commissioner assesses: PJ at [79].

58    The primary judge concluded that there was no basis on which it might be said, for the purposes of the TALP, that EMH was “non-taxable” in the 2015 income year or had paid the tax which it was required to pay for that year prior to [7] June 2016: PJ at [90]. Accordingly, even if the I&T Concession Subsection could be taken as extending the lodgment end date to [7] June 2016, EMH did not fall within either of the categories of taxpayers entitled to take advantage of any such extension: PJ at [90].

59    The primary judge then dealt with a further submission advanced by EMH to the effect that GIC can only logically apply where there is an unpaid tax debt and that, so long as the taxpayer complies with the Commissioner’s requirement to lodge a tax return within 21 days after 15 May each year and pays the tax (if any) which it calculates as a matter of probability, then it has satisfied the lodgment date requirement: PJ at [91]–[93]. The primary judge described that as an exhortation to some alleged underlying injustice, which should be rejected, and the legislation should be applied according to its terms: PJ at [94]. The primary judge referred to the context of the obligation to pay GIC as including subs 5-5(3) of the ITAA97, which provides that where the Commissioner makes an assessment of a taxpayer’s income for a given income year, the tax may be taken to have been due and payable at a time “before” the assessment was made: PJ at [95]. As the Note to subs 5-5(3) makes clear, that is an order to “ensure that general interest charge begins to accrue from the same date for all like entities”. The primary judge said that, in relation to an entity that is not a “self-assessment entity”, subss 5-5(5)–(6) provide a logical and rational scheme for the lodgment of a return: PJ at [95]. If it is lodged within time and the correct amount of tax is paid by the “return date” (which we read as a clerical error for what was intended to be a reference to the due date for payment), being 21 days from the date required for lodging, no GIC will be payable. If it is lodged on time but the Commissioner subsequently gives an assessment for a greater amount of tax (for instance, upon the basis that the return articulated an incorrect amount of tax), the taxpayer has 21 days following the giving of the notice of assessment in which to pay the assessed tax before the GIC commences to accrue: PJ at [95].

60    The primary judge said that, in the present case, EMH did not take advantage of the benefits to be derived from the scheme when a return is lodged within time: PJ at [96]. As EMH did not lodge within the time available for the purposes of subs 5-5(6) of the ITAA97, its taxation liability (being subject to determination by the Commissioner at some later date) was payable 21 days from the date on which it had been required to lodge the 2015 Return (ie [16] May 2016). The primary judge said that EMH’s real complaint appeared to be that it did not take the advantage which flowed from lodging its return on time and now claims a benefit to which others, who also did not lodge on time, are not entitled: PJ at [96].

61    The primary judge then expressed the following conclusions: PJ at [98]. The I&T Concession Subsection provides for the remission of an administrative penalty that is imposed where a taxpayer fails to provide a tax return to the Commissioner by the relevant lodgment end date, and does not serve to extend or otherwise modify that date. In any event, EMH is not an entity which falls within the ambit of the concession provided by the I&T Concession Subsection. It therefore follows that the Decision adopted a correct understanding of the law and, in particular, that the date by which EMH was required to lodge its return was [16] May 2016, which it did not meet.

62    The primary judge then said that it followed that EMH’s 2015 income tax liability was “due and payable” 21 days after [16] May 2016, being [7] June 2016: subs 5-5(5) of the ITAA97. GIC would accrue from that date, and EMH did not lodge the 2015 Return before 7 June 2016. The primary judge concluded that, to this extent, the conclusions in para [4] of the Decision are “entirely correct”: PJ at [99]. In a later passage, the primary judge found that the Delegate correctly identified the date by which EMH was to lodge the 2015 Return as [16] May 2016: PJ at [113].

63    The primary judge concluded that no jurisdictional error (which we read as intended to mean no reviewable error) had been demonstrated in the reasons of the Delegate, and the Application should be dismissed with costs: PJ at [114]–[115].

Grounds 1, 4, 6–12 and 14: On what day was EMH required to lodge its 2015 tax return?

64    EMH’s notice of appeal is not drafted succinctly, and is discursive and argumentative in style. Rather than taking each of the grounds individually, it is convenient to group the grounds according to their subject matter, and deal with them by reference to the EMH’s submissions. This first set of grounds deals with the construction of the TALP as to the day when EMH was required to lodge its 2015 Return. We also note at the outset that, although EMH made some submissions orally as to the Commissioner’s subjective intentions in relation to the TALP, it is common ground that the TALP must be construed objectively.

65    EMH submits that the plain meaning of the language used in the I&T Lodgment End Dates Subsection in describing those entitled to a lodgment end date of 15 May 2016, by reference to those “not eligible for the 5 June concession”, means that a trustee eligible for the 5 June concession is not required to lodge by 15 May 2016, and, by implication, a trustee eligible for the 5 June concession is required to lodge by 5 June 2016. EMH submits that such an implication is confirmed by the I&T Concession Subsection, in that it nominates 5 June 2016 as the “Lodgment date”, it refers to the taxpayer having a lodgment end date of 15 May 2016 and being “otherwise” required to lodge by 15 May 2015, and states that the taxpayer must apply for a deferral only if it wishes to lodge beyond 5 June 2016. EMH thus submits that the Commissioner did not require taxpayers eligible for the 5 June concession to lodge by 15 May 2016.

66    EMH submits that the primary judge erred in finding that the reference to a FTL penalty, and the Note stating that 5 June 2016 was not a lodgment end date but a concessional arrangement where penalties will be waived if lodgment and payment are made by this date, evince an intention not to require lodgment by 5 June 2016. EMH advances four matters in support of that submission.

67    First, EMH submits that the primary judge’s construction does not address the statutory question as to what day the taxpayer is required to lodge its income tax return with the Commissioner. EMH submits that it does not matter what the Commissioner might consider are the legal consequences of his requiring the taxpayer to lodge by 5 June 2015, and it is apparent that the Commissioner was seeking to ensure that there would not be a further 21 days after 5 June 2016 for the tax to be paid, and thus wished to retain the lodgment end date of 15 May 2016.

68    Second, EMH submits that the primary judge’s construction rests on an implication which cannot contradict express statements that admit of no ambiguity. EMH submits that the “incidental matters” of the references to remission of the FTL penalty and the Note in the I&T Concession Subsection do not carry such strength in one direction that to entertain the opposite view (as to 5 June 2016 being the operative date) appears wholly unreasonable.

69    Third, EMH submits that those “incidental matters” are “fraught with difficulty” as an aid to construction. EMH submits that the Commissioner states that the return may be lodged by 5 June 2016 “without penalty”, which it submits accords with 5 June 2016 being the Lodgment Date as stated. EMH submits that a requirement to lodge on 15 May 2016, subsequently coupled with a statement that there is no obligation to extend the time to lodge until after 5 June 2016, makes any requirement to lodge by 15 May 2016 illusory. EMH describes that as an “artificial construct” which cannot “cloak the fact” that 5 June is the date the Commissioner in fact requires for lodgment. EMH draws attention to the statement that the taxpayer must apply for a deferral if it needs a lodgment deferral beyond 5 June, and submits that the primary judge did not take that statement into account.

70    Fourth, EMH submits that the Note does not make sense, in that if payment is not made by 5 June 2016, then the taxpayer is not eligible for the concession.

71    EMH submits that it is plain, when read with the “Payments” section at pp 29–30, that the Commissioner in all events was seeking to ensure that any payments of tax had to be made by 5 June 2016 as a condition of the extension of the Lodgment Date to 5 June 2016. EMH submits that, so long as the payments and the return were lodged by 5 June 2016, no application for an extension was required. EMH submits that the Commissioner thus made it clear that the Lodgment End Date remained 15 May 2016, and was a criterion of eligibility for lodging by 5 June 2016. EMH submits that the language of the Lodgment Date of 5 June 2016 meant that the tax return had to be lodged by 5 June 2016.

72    EMH further submits that the reader was not intended to undertake the laborious task undertaken by the primary judge of discerning the different shades of meaning of Lodgment End Date, Lodgment Date, and Lodgment Due Date. EMH submits that the primary judge failed to ascribe any meaning to Lodgment Date, other than that it did not mean what it naturally meant, with reference to the PJ at [55]. EMH submits that Lodgment End Date was the fixed reference point for a taxpayer’s payment obligation 21 days after that date, irrespective of whether it was or was not also the date that the Commissioner required the tax return to be lodged.

73    In our view, the primary judge’s construction of the TALP was correct, and made due allowance for the fact that the TALP is not the product of a legislative draftsman.

74    The TALP consistently uses the expression “lodgment end date” as referring to the date by which a taxpayer must lodge its return. That is so in the abstract for the section headed “Tax returns by client type” (p 27) and also within the I&T Section (pp 28–30). The I&T Concession Subsection, in dealing with the 5 June concession, expressly refers to the remission of the FTL penalty and expressly stipulates that 5 June 2016 is “not a lodgment end date” in the Note. The Commissioner submits, and we accept, that there are additional elements of the language used in the I&T Concession Subsection which confirm that the 5 June concession does not extend the lodgment end date, namely:

(a)    the 5 June concession applies to returns “otherwise due by [16] May 2016”, which presupposes that [16] May 2016 remains the lodgment end date;

(b)    each of the two classes of entity to which the 5 June concession applies is required to have “a lodgment end date of [16] May 2016”;

(c)    the FTL penalty is imposed only where a taxpayer fails to lodge by the required day (subs 286-75(1) of Schedule 1 to the TAA53); were the concession to extend the lodgment end date to [7] June 2016, there could never be a penalty to remit where lodgment and payment are made by [7] June, and the express purpose of the concession would be rendered redundant (as the primary judge said at PJ [54]); and

(d)    the tables that set out the lodgment end dates, use that term in the table whereas the 5 June concession table uses the term “lodgment date”, being a clear indication that it was not a new lodgment end date.

75    Accordingly, we reject EMH’s submission that the Lodgment End Date related only to payment not being after [7] June 2016. Further, we do not regard the primary judge’s construction as elevating implications above express language, as it is the express language used which lies at the heart of the primary judge’s reasoning. We do not regard the references in the I&T Concession Subsection to remission of the FTL penalty and the Note stating that 5 June was not a lodgment end date as incidental matters, as they serve an important purpose in specifying the operation of the 5 June concession. In effect, the concession conferred a benefit where a taxpayer failed to lodge by [16] May 2016, but lodged and paid by [7] June 2016, and was then relieved of the FTL penalty that the entity would otherwise have been liable to pay. The 5 June concession was not intended to alter the date from which GIC runs as a consequence of the statutory scheme in s 5-5 of the ITAA97.

76    EMH also relies on the reference to the 5 June concession in the Superannuation Obligation Section, where 5 June 2016 appears in the column headed “Lodgment due date” (p 24). As the Commissioner submits, the superannuation obligations encompass an array of obligations beyond income tax, including superannuation guarantee charge statements, departing Australia superannuation payments and lost member reports, not all of which are lodgment end dates for a return (pp 22–24 of the TALP). Further, as the Commissioner submits, superannuation funds are also dealt with under “Companies and super funds” (pp 32 – 35), where it is expressly stated that [7] June 2016 “is not a lodgment end date, but a concessional arrangement where penalties [referred to earlier in that section as being the FTL penalty] will be waived if lodgment and payment is made by that date” (p 34). That bears an obvious similarity to the Note in the table in the I&T Concession Subsection (p 29). Accordingly, the date of [7] June 2016 was not a lodgment end date, but a concessional arrangement under which only the FTL penalty would be waived if lodgment was made by that date.

77    Accordingly, these grounds should be rejected.

Grounds 2, 3 and 5: The primary judge’s references to 31 October 2015

78    EMH submits the primary judge reached a conclusion (at PJ [48] and [59]) that the Commissioner intended that taxpayers eligible for the 5 June concession were required to lodge their returns by 31 October 2015. EMH submits that, on that reasoning, taxpayers eligible to lodge by 5 June 2016 were in a worse position than taxpayers ineligible to lodge by 5 June 2016, thereby rendering the 5 June concession devoid of utility and positively detrimental. Further, EMH submits that it was procedurally unfair for the primary judge to adopt a view in relation to 31 October 2015 which was not advanced by either party, and was not the subject of submissions from the parties.

79    EMH’s submissions proceed on a misreading of the primary judge’s reasons. The primary judge’s conclusion was that EMH’s lodgment end date was [16] May 2016, being the basis of the Decision. EMH’s Application was dismissed because it did not lodge by that date and did not fall within the 5 June concession: PJ at [47] and [113].

80    As the Commissioner submits, the reference to 31 October 2015 arose in a subsidiary passage of the primary judge’s reasons, reconciling an apparent textual anomaly in the words “not eligible for the 5 June concession” in the table in the I&T Lodgment End Dates Subsection. The primary judge said that, in order to render the TALP harmonious, an eligible entity that did qualify for the 5 June concession would default to the standard date of 31 October 2015: PJ at [48] and [59]. Although that formed part of the primary judge’s consideration of the proper construction of the TALP, ultimately his Honour’s decision was that EMH was required to file the 2015 Return on or before [16] May 2016. In any event, the obscurities thrown up by the infelicitous language in the table in the I&T Lodgment End Dates Subsection yielded to the clear explanations in the I&T Concession Subsection (pp 28–29 of the TALP). Accordingly, the primary judge found that [16] May 2016 remained the lodgment end date for those eligible for the concession, and that the Commissioner’s submission to that effect was correct.

81    In those circumstances, there was no denial of procedural fairness, as the primary judge’s conclusion was that the operative lodgment end date for EMH was [16] May 2016, as the Commissioner submitted, not 31 October 2015. In any event, where a legal question decided at first instance is raised in an appeal, any denial of procedural fairness is addressed by the appeal and is no longer operative: Federal Commissioner of Taxation v Thomas [2018] HCA 31; (2018) 264 CLR 382 at [82] (Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ). EMH has had ample opportunity to address the issue in this appeal.

82    Accordingly, these grounds should be rejected.

Ground 13: Did EMH qualify for the 5 June 2016 concession?

83    EMH submits that it satisfied the criterion of eligibility for the 5 June concession as a trustee “provided that any payment required is also made by this date”. The submission is based on the tax calculation made in EMH’s 2015 Return that no tax was payable. EMH submits that in order to be eligible for the 5 June 2016 concession, the tax payable under the return must be paid when lodging the return, irrespective of whether or not the act of lodging the return was deemed for certain entities to give rise to an assessment in that amount (with reference to s 166A of the ITAA36). EMH submits that the TALP does not distinguish between entities eligible for the 5 June concession by reference to whether their lodged tax return is deemed to be an assessment. EMH submits that the Delegate erred in para [2] of the Decision, in stating that EMH had not provided information to substantiate that it was a non-taxable entity. In any event, EMH submits that it relied on the first category of taxpayer in the table in the I&T Concession Subsection out of an abundance of caution, and the relevant category was the second of the two categories in that table.

84    EMH submits that the primary judge posed an irrelevant question about whether there would be a liability to FTL penalty by the required date if there was in truth an outstanding liability to the Commissioner, but the taxpayer lodged a nil return. EMH submits that the answer to that question is “no”, because the taxpayer who lodges a tax return by the due date has not failed to lodge a tax return and so is not liable for FTL penalties at all.

85    EMH submits that the Commissioner must be taken to have required payment of the liability calculated by the tax agent in the tax return by [7] June 2015 (not the unknown amount of the notice of assessment for the 2015 year which was not issued until 20 May 2020) because there is no other liability to be calculated by [7] June 2016. EMH submits that the taxpayer is required by statute to provide in a tax return information and work out its liability to tax, citing s 4-10 ITAA97 for an individual and Div 6 of Pt III of the ITAA36 for a trustee. EMH submits that that is the subject matter of the statutory obligation to make payment, whatever the lodgment date, not a future amount that only the Commissioner can work out. EMH thus submits that the tax agent’s calculation of the tax liability is the obvious and only subject matter of the provision. EMH submits that the primary judge ought to have found that 10 June 2020 was the due date for payment of EMH’s 2015 income tax liability, being 21 days after notice of the assessment of 20 May 2020, pursuant to subs 5-5(6) of the ITAA97.

86    It was not in dispute before the primary judge that EMH’s income tax liability for the 2015 income year was approximately $9 million, assessed following an audit by notice of assessment dated 20 May 2020, and that EMH had not paid that amount by [7] June 2016. The Commissioner submits, and we accept, that EMH therefore satisfied neither the “actually non-taxable” criterion nor the payment criterion.

87    As the primary judge found (PJ at [76]), the word “actually” preceding “non-taxable” was deliberately chosen to exclude the argument that a taxpayer is non-taxable merely because its agent lodges a nil return. In our view, there is no other tenable construction of the word “actually”. The concession is concerned with the taxpayer’s actual liability in accordance with the income tax law, not with an amount asserted by the taxpayer. That construction is also consistent with subs 5-5(3), in providing that where the Commissioner does make an assessment of income tax, the tax may be taken to have been due and payable at a time before the assessment was made. For completeness, we see no error in the primary judge’s construction of subs 5-5(3) or otherwise of s 5-5, noting the obvious clerical error at PJ [95] in his Honour’s use of “return date” rather than the due date for payment, to which we have referred at [59] above.

88    Accordingly, this ground should be rejected.

Grounds 5 and 15: Did the primary judge go beyond judicial review?

89    EMH submits that it was not for the primary judge to step into the shoes of the Delegate and decide whether it was fair and reasonable to remit GIC. EMH submits that the Delegate’s decision not to remit GIC was not “obviously correct” (being a phrase used by the primary judge at PJ [111]). EMH submits that the Delegate made fundamental errors of fact and law which vitiated the Decision. EMH submits that the Delegate manifestly erred in finding that EMH lodged its 2015 Return later than the operative lodgment date in reliance on the TALP, and did not consider the matter further. EMH submits that, if that fundamental error had not been made, it was open for the Delegate to consider the matter further and find that, if it had not been for the promulgation of the 5 June concession, EMH could reasonably be expected to lodge on 15 May 2016 and thus have lodged on time. EMH submits that it acted as directed by the TALP to its considerable detriment.

90    These grounds misconceive the reasoning of the primary judge. The primary judge was concerned with whether EMH had established that there was a relevant error in the Decision. The primary judge found that there was not. The primary judge’s reasoning is properly directed to EMH’s contentions as to errors of law concerning the fundamental question of the applicable lodgment date for the 2015 Return, and does not deal with questions of fairness or reasonableness at large.

91    Accordingly, these grounds should be rejected.

Ground 16: Costs of the first instance proceedings

92    Ground 16 was abandoned by EMH in the course of its oral address in reply.

Conclusion

93    In our view, the appeal should be dismissed with costs.

94    We observe, by way of completeness, that the decision in respect of which judicial review has been sought is a decision not to remit under s 8AAG of the TAA. The grounds of review are not directed to the exercise of the discretion to remit, but are directed to the precondition of the Commissioner’s power to remit – namely that EMH was otherwise liable to pay GIC because an amount of income tax remained unpaid after the time by which it was due to be paid. Although issues as to liability have been considered in reviews of penalty remission decisions in the context of Part IVC of the TAA (see for example, Re Temples Wholesale Flower Supplies Pty Limited v Commissioner of Taxation [1991] FCA 162; (1991) 29 FCR 93), such issues have not been considered in the context of judicial review under the Administrative Decisions (Judicial Review) Act 1977 of a decision made under the power to remit GIC. As no issue was taken in respect of whether such an application for judicial review was the appropriate vehicle to challenge the imposition or calculation of GIC, it is not an issue that needs to be resolved in the present proceedings.

Associate:

Dated:    28 August 2026