Hematite Petroleum Pty Ltd v Victoria
Encyclopedia
Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR
599 is a High Court of Australia
case that deals with section 90 of the Australian Constitution
.
), as amended by the Pipelines (Fees) Act 1981 (Vic), was invalid for being an excise duty contrary to section 90. The "pipeline operation fee" for the financial year 1981-1982 was $10 million for the trunk pipelines. These pipelines were used for the transportation of gas liquids and crude oil, which formed an "integral step in the production of the products sold by the plaintiffs".
, which "has not emerged unscathed from the more recent decisions on s 90"; for example, there was Barwick CJ's formulation of a variety of factors in Anderson's Pty Ltd v Victoria
. His Honour notes that section 90 would do very little to add to the powers of the Commonwealth's economic and financial powers, if the States were allowed to circumvent the prohibition in section 90 through the criterion of liability approach. Since section 90 also allows the Commonwealth parliament to granting bounties on goods, it would make little sense for the States to be given the power to burden such production. Thus, overall, Mason J found that the objective of the power, to secure control over taxation of commodities, suggests the broad approach to excise. As for the required relationship, his Honour prefers the substantial effects doctrine - there need not be a strict arithmetical relationship between the tax and the quantity or value of the goods sold, and it is sufficient that the tax affects the price of the goods sold. A deciding factor in this case is the factual matrix. It appears that the fee is "not merely a fee for the privilege of carrying on an activity"; it is an exaction of such magnitude on a step of the production process, and it is a convenient means of applying such a tax.
Gibbs CJ made the observation that the States now have a severely restricted ability to tax: the restrictions from section 90, and the imposition of uniform income taxes.
Commonwealth Law Reports
The Commonwealth Law Reports are the authorised reports of decisions of the High Court of Australia. The CLR are published by the Lawbook Company, a division of Thomson Reuters...
599 is a High Court of Australia
High Court of Australia
The High Court of Australia is the supreme court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...
case that deals with section 90 of the Australian Constitution
Constitution of Australia
The Constitution of Australia is the supreme law under which the Australian Commonwealth Government operates. It consists of several documents. The most important is the Constitution of the Commonwealth of Australia...
.
Background
The plaintiffs sought a declaration that the tax imposed in the Pipelines Act 1967 (VicVictoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
), as amended by the Pipelines (Fees) Act 1981 (Vic), was invalid for being an excise duty contrary to section 90. The "pipeline operation fee" for the financial year 1981-1982 was $10 million for the trunk pipelines. These pipelines were used for the transportation of gas liquids and crude oil, which formed an "integral step in the production of the products sold by the plaintiffs".
Decision
Mason J restated the rejection of the narrow view of excise, but noted that the broad view was tempered by the insistence of the Court that there be a strict relationship between the tax and the goods (the criterion of liability approach), and the problem of defining that relationship. He referred to the formulation in Bolton v MadsenBolton v Madsen
Bolton v Madsen 110 CLR 264 is a High Court of Australia case that dealt with section 90 of the Australian Constitution, which prohibits States from levying excise duty.This case followed Dennis Hotels Pty Ltd v Victoria...
, which "has not emerged unscathed from the more recent decisions on s 90"; for example, there was Barwick CJ's formulation of a variety of factors in Anderson's Pty Ltd v Victoria
Anderson's Pty Ltd v Victoria
Anderson's Pty Ltd v Victoria 111 CLR 353 is a High Court of Australia case that dealt with section 90 of the Australian Constitution...
. His Honour notes that section 90 would do very little to add to the powers of the Commonwealth's economic and financial powers, if the States were allowed to circumvent the prohibition in section 90 through the criterion of liability approach. Since section 90 also allows the Commonwealth parliament to granting bounties on goods, it would make little sense for the States to be given the power to burden such production. Thus, overall, Mason J found that the objective of the power, to secure control over taxation of commodities, suggests the broad approach to excise. As for the required relationship, his Honour prefers the substantial effects doctrine - there need not be a strict arithmetical relationship between the tax and the quantity or value of the goods sold, and it is sufficient that the tax affects the price of the goods sold. A deciding factor in this case is the factual matrix. It appears that the fee is "not merely a fee for the privilege of carrying on an activity"; it is an exaction of such magnitude on a step of the production process, and it is a convenient means of applying such a tax.
Gibbs CJ made the observation that the States now have a severely restricted ability to tax: the restrictions from section 90, and the imposition of uniform income taxes.