The Secretary to the Treasury has, by direction, forwarded me the following memorandum for advice:

I forward herewith papers relating to the administration of the Land Tax Assessment Act by the Commissioner of Taxation and the Second Commissioner of Taxation.

I am directed to ask for the advice of the Attorney-General on the following matters:

1. Was the Commissioner of Taxation acting within the powers conferred on him under the Land Tax Assessment Act 1910–28 in issuing the directions and instructions set out in these papers.
2. Is the Second Commissioner of Taxation subject to the control of the Commissioner of Taxation in the general administration of the Land Tax Assessment Act, or is he subject only to the control of the Minister administering the Department of the Treasury.

Section 25 of the Commonwealth Public Service Act 1922–1931 provides that the Permanent Head of a Department shall be responsible for its general working and for all the business thereof, and shall advise the Minister in all matters relating to the Department.

The section also provides that the Chairman of the Public Service Board, the Auditor-General and the Commissioner of Taxation shall severally have all the powers of a Permanent Head under the provisions of the Act, so far as relates to the branches of the Service respectively under their direct control.

Sections 4 and 4A of the Land Tax Assessment Act 1910–1930 are as follows:

1. There shall be a Commissioner of Land Tax, who shall, subject to the control of the Minister, have the general administration of this Act.
2. There may be an Assistant Commissioner of Land Tax.

4. A
1. There may be a Second Commissioner of Land Tax.
2. The person for the time being holding the office of Assistant Commissioner of Land Tax shall be the Second Commissioner of Land Tax; and any reference in this Act to the Assistant Commissioner shall be deemed to include a reference to the Second Commissioner of Land Tax.

Section 5 of that Act also provides that the Commissioner and the Assistant Commissioner shall not be subject to the Commonwealth Public Service Act 1902–1916, or any Act amending or in substitution for that Act. Section 6A of the Land Tax Assessment Act is as follows:

6. A
1. Subject to this section the Assistant Commissioner shall have and may exercise all the powers and functions of the Commissioner under this Act.
2. Where in this Act the exercise of any power or function by the Commissioner or the operation of any provision of this Act is dependent upon the opinion, belief or state of mind of the Commissioner in relation to any matter, that power or function may be exercised by the Assistant Commissioner, or that provision may operate, as the case may be, upon the opinion, belief or state of mind of the Assistant Commissioner in relation to that matter.
3. Nothing in this section shall be deemed to confer upon the Assistant Commissioner any power or function of the Commissioner under sub-section (1) of section four, section eight, or section nine of this Act or to prevent the exercise of any power or function by the Commissioner, and the Commissioner shall have, in relation to any act of the Assistant Commissioner, the same power as if the act were done by himself.

The corresponding sections of the Income Tax Assessment Act 1922–1931 are similar to the sections above quoted from the Land Tax Assessment Act. The Commissioner of Taxation is given the general administration of the Act. References to the Assistant Commissioner are to be read as references to the Second Commissioner, and that officer is given all the powers and functions of the Commissioner, except the general administration of the Act, the authority to delegate his powers or functions and the function of reporting annually to the Treasurer.

The Estate Duty Act 1914–1928 is that which establishes the office of Commissioner of Taxation and of Second Commissioner of Taxation (sections 4 and 4A). As in the cases of the Acts above referred to, the Commissioner of Taxation is given the general administration of the Act, and the Assistant Commissioner (to be read as Second Commissioner) is given, with exceptions similar to those above referred to, all the powers and functions of the Commissioner under the Act. The exemption of the Commissioner and Second Commissioner from the application of the Commonwealth Public Service Act is repeated by reference.

On the 10th March, 1932, the Commissioner of Taxation addressed two letters to the Second Commissioner. The despatch of these letters at that time was postponed at the instance of the Assistant Treasurer who proposed to call Mr. Templeton to Canberra for an interview. When it was found that this interview could not be arranged the Commissioner was authorised to deal with the matter himself and despatched the two letters under cover of a third letter dated 20th July, 1932. The letter marked ‘(a)’ contains the text of a telegram by the Commissioner to the Second Commissioner as follows:

Please defer visit Sydney re collection Land Tax and settlement objections stop Cabinet considering both subjects stop Assistant Minister favours early resumption district conferences with land owners instituted by previous Government, but desires Cabinet decision stop Writing.

The letter also shows the telegram of the Second Commissioner in reply which was as follows:

My visit Sydney necessary ensure collection estimated Land and Income taxes and thus materially assist Government’s financial arrangements stop Preparations made accordingly and leaving tomorrow.

The letter marked ‘(b)’ contained a direction to the Second Commissioner to refrain from issuing to Deputy Commissioners certain instructions. They included an instruction that the Senior Valuer should determine all objections to values of land for taxation purposes.

Other instructions by the Second Commissioner to the Deputy Commissioner, Sydney, were:

1. to cancel all arrangements made for the holding of further district conferences with taxpayers;
2. to determine all objections against assessments without prior conferences with taxpayers; and
3. to refrain from arranging any further district conferences without the authority of the Second Commissioner.

The direction in so far as it related to the instructions to the Senior Valuer was based on legal advice to the effect that the instruction of the Second Commissioner amounted to a delegation of authority, which delegation the Second Commissioner had no power to give.

It was indicated in the telegram of the 9th March set out above that the Assistant Minister favoured an early resumption of district conferences.

The general administration of the various Assessment Acts above referred to is vested in the Commissioner of Taxation and the Second Commissioner is expressly excluded from participation in such administration.

In the case of the Land Tax Assessment Act and the Estate Duty Assessment Act, the Commissioner exercises his power of general administration subject to the control of the Minister and the directions given by the Commissioner to the Second Commissioner were issued in consequence of the fact that the Minister was proposing to consider certain matters arising under the Act.

The general administration of the Acts involves the management, subject to Ministerial instructions, of the work involved in carrying out the provisions of the Acts. Such duty is exercisable solely by the Commissioner, and in the exercise of that duty it is within his power to issue directions to any officer employed in the branch under his control, whether or not such officer is exempted from the application of the Commonwealth Public Service Act.

It is the duty of the Second Commissioner to comply with directions of the Commissioner given in the exercise of his power of general administration.

This opinion sufficiently answers the first question.

I answer the second question by saying that the Second Commissioner is not subject only to the control of the Minister but is bound to obey instructions of the Commissioner of Taxation.

The questions submitted relate only to the administration of legislation dealing with land tax.

The opinion which I have given applies also to the administration of the Estate Duty Assessment Act and the Income Tax Assessment Act. In each case the Commissioner is placed by statute in the position of administrative head of the Taxation Branch; he is both entitled and bound in that capacity to give directions to other officers including the Second Commissioner and it is their duty to obey such directions.

This opinion relates to administrative questions such as those mentioned in the correspondence which has been placed before me.

In such matters the Minister could if he thought proper overrule a direction of the Commissioner in respect of the administration of the laws relating to land tax or estate duty–but not in the case of income tax, where the statute does not provide for any ministerial control.

The Commissioner has no power of control over the Second Commissioner when the latter is exercising statutory powers specifically conferred upon him in the making of assessments, e.g. section 61(1) and (2) of the Land Tax Assessment Act. In such matters, however, the Commissioner may make any amendments which he may think necessary in an assessment made by the Second Commissioner in the same manner and to the same extent as if he had himself made the assessment–see section 6A(3).

[Vol. 25, p. 773]