The Secretary, Postmaster-General's Department:

The Attorney-General is of opinion that the Income Tax Commissioners of the States have no power to compel Heads of Commonwealth Departments to forward returns of salaries etc. paid to officers under their control.

At the same time, he thinks that it is highly desirable to avoid friction at the present time, and has already suggested in connection with this matter that the Commissioner should be informed that a request for information as a matter of courtesy would receive consideration.

Mr Scott's letter of 5 December (herewith) has been held over pending further information as to the result of the request made to the New South Wales Department to pay a sum for overtime. Mr Deakin thinks that such a request is reasonable, and that a similar request, if made, ought to be complied with by the Victorian Department.

It might also happen that the Commissioner would be satisfied with a less voluminous and costly return than that now asked for.

If some such arrangement as is suggested cannot be agreed upon, Mr Deakin suggests that the Postmaster-General should consider whether the cost of the return asked for would be substantial enough to outweigh the inconvenience of possible litigation before the establishment of the High Court.

[Vol. 3, p. 110]