Opinion Number. 1464


State Stamp Duty victorian state stamp duty: validity of State law imposing stamp duties on receipts given by Commonwealth officers for their salaries: inconsistency

Key Legislation

Stamps (Unemployment Relief) Act 1930 (Vic) ss 4, 5, 9, 11(6), Schedule: Stamps Act 1928 (Vic)

The Secretary to the Treasury

The Secretary to the Treasury asks for advice on the question set out in the following memorandum:

  • I am forwarding herewith a copy of the Stamps (Unemployment Relief) Act 1930, recently passed by the Victorian Parliament. The question has been raised as to whether the stamp duty will apply to salaries or wages of Commonwealth employees, and I shall be glad if you will kindly advise me in this matter.
  1. Sub-section 6 of section 11 of the Act provides for the Governor in Council making arrangements with the Governor-General of the Commonwealth for facilitating the payment of stamp duties. The Act will come into operation on the 1st July next, and if your advice is to the effect that the stamp duty is payable by Commonwealth employees it will be seen that there is not much time to complete arrangements with the State.
  2. I shall be glad, therefore, if you can see your way to treat this matter as urgent.

The Bill forwarded by you is in some respects different from the Act as finally passed. The Act is entitled ‘An Act for imposing Stamp Duties on Receipts for certain Salaries or Wages for the purpose of providing Moneys for the Relief of Unemployment’, and is to be read and construed with the Stamps Act 1928 and its amendments.

By section 4, the stamp duty specified in the Schedule to the Act is charged for the use of His Majesty, upon receipt for salary or wages to which the Act applies.

Section 5 provides that any person whose income for the year ending 30 June, 1930, is £312 or less, and consists wholly of salary or wages, and is not otherwise taxable, shall be liable to pay stamp duty at the prescribed rate.

By section 9, every person receiving such salary or wages payable to him shall give to the person making the payment a receipt duly stamped in accordance with the Act.

The scheme of the Act is a stamp duty on receipts for the payment of salary.

In D’Embden v. Pedder, 1 C.L.R. 91, the High Court held that a State law imposing stamp duties on receipts must be construed as not applying to receipts given by Commonwealth officers for their salaries; because if not so construed it would be inconsistent with Commonwealth laws which require the officer to give a receipt for his salary.

The principle of this decision (see p. 111) is that where Commonwealth law requires an officer to give a receipt, State law cannot impose a condition on the giving of that receipt.

It is true that the decision in D’Embden v. Pedder was also based independently on another ground, the doctrine of ‘mutual non-interference’, which has since been overruled by the Engineers’ Case, 28 C.L.R. 129, but the decision itself, as based on inconsistency with Commonwealth law, was expressly approved (see p. 154).

I am therefore of opinion that the Parliament of Victoria has no power to impose a stamp duty upon the receipt of salary of employees of the Commonwealth.

In view of the reference to officers and employees of the Commonwealth in section 11(6), the Act cannot be construed as not applying to them; but so far as it purports to apply to them, it is, in my opinion ultra vires.

[Vol. 24, p. 615]