Green International Ltd v Commissioner General of Internal Revenue [2023] PGSC 13; SC2357 (23 February 2023)

SC2357

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 216 OF 2019

BETWEEN:
GREEN INTERNATIONAL LIMITED
Appellant

AND:
COMMISSIONER GENERAL OF INTERNAL REVENUE
Respondent

Waigani: Batari, Makail & Logan JJ
2023: 20th & 23rd February

TAXES AND DUTIES – Income tax – Goods and Services Tax (GST) – audit report mistaken for assessment - no assessment or notice of assessment made by Commissioner under s228 and s236 Income Tax Assessment Act 1959 (ITA59) or s67 Goods and Services Tax Act 2003 (GST Act) – whether the right of objection to assessment under s245 ITA59 and s74 GST Act is engaged without an assessment – whether an objection decision under 246 ITA59 or s75 GST Act can be made without an objection being made against an assessment – whether the review or appeal pathways are mutually exclusive under s247 ITA59 or s75 and s77 GST Act – s155(4) of Constitution is not a source of power to extend time limits to challenge objection decisions under ITA59 or GST Act – appeal allowed

Facts:

On the 29 June 2016, the respondent, the Commissioner General of Internal Revenue (Commissioner), sent to the appellant, Green International Limited (the company) a letter entitled, “Finalisation of Income Tax and GST Audit”. The audit was for the period 1 January 2013 to 31 March 2016. The letter detailed substantial amounts in income tax, GST and penalties said to be owed.

The Commissioner’s letter advised the company that these amounts “will be assessed” and that it had 60-days to lodge an objection. Within the 60-day period, the company lodged what purported to be an objection. The Commissioner allowed the objection in part, however, there remained a large sum of income tax, GST and penalties outstanding. The Commissioner advised that if the company was dissatisfied with the objection decision, the company could seek review by the Tax Review Tribunal (Tribunal) or file an appeal in the National Court.

In December 2017, the company notified the Commissioner that the company wished to have the objection decision reviewed by the Tribunal. The Chairman of the Tribunal acknowledged receipt of the review applications. However, by April 2019, the Tribunal had not heard the application for review. Later that month, the company withdrew its application for review with the Tribunal and filed in the National Court an application under s155(4) of the Constitution for leave to be granted to hear a taxation appeal out of time. Due in part to a registry filing characterisation error, the learned primary judge refused leave to extend time. In so doing, the primary judge concluded that there had been assessments made of income tax and GST.

Held:

1. As required by the ITA59 and the GST Act, no assessment was made or notified by the letter of audit.
2. In the absence of an assessment made and notified, no objection decision can arise for the purposes of engaging rights of review or appeal.

Obiter:

1. Rights of review or an appeal by case stated or otherwise in respect of objection decisions are mutually exclusive. A communicated election to pursue one of these alternatives precludes later seeking of another. Scarf v Jardine (1882) 7 App Cas 345 applied.
2. Section 155(4) of the Constitution is not a source of power for the extension of a statutory time limit for challenging an objection decision.
   

Cases Cited

Papua New Guinean Cases
Green International Ltd v Commissioner General of Internal Revenue [2022] PGSC 73; SC2269
Jeffrey Balakau v Ombudsman Commission of Papua New Guinea [1996] PNGLR 346
Ken Norae Mondiai v Wawoi Timber Co Ltd [2007] SC886
South Seas Tuna Corporation Ltd v Palaso [2019] PGSC 3; SC1761
Placer Holdings Pty Ltd v The Independent State of Papua New Guinea [1982]
PNGLR 16

Overseas Cases
Batagol v Federal Commissioner of Taxation (1963) 109 243
Federal Commissioner of Taxation v S Hoffnung & Co [1928] HCA 49; 42 CLR 39
R v Deputy Commissioner of Taxation, ex parte Hooper [1926] HCA 3; (1926) 37 CLR 368
Scarf v Jardine (1882) 7 App Cas 345

Legislation

Papua New Guinean Legislation
The Constitution of the Independent State of Papua New Guinea, s155
Goods and Services Tax Act 2003, ss31, 63, 65, 67, 69, 72, 74, 77
Income Tax Act 1959, ss4, 228, 229, 230, 231, 232, 236, 237, 245, 246, 247
Income Tax (2020 Budget)(Amendment) Act 2019
Interpretation Act 1975, s63
Supreme Court Act 1975
Taxation Administration Act 2017

Overseas Legislation:
Income Tax Assessment Act 1936 (Cth)
Taxation Administration Act 1953 (Cth)

Counsel:
Mr J Wohuinawagu and Ms E Injia, for the Appellant
Mr Mr S Sinen, for the Respondent

23rd February, 2023

1. BY THE COURT: On 29 June 2016, the respondent, the Commissioner General of Internal Revenue (Commissioner), sent to the appellant, Green International Limited (the company) a letter bearing that date entitled, “Finalisation of Income Tax and GST Audit”. In the opening sentence of that letter, the Commissioner stated, “We are writing to provide you with the final report of our audit Green International Limited for the period 1 January 2012 to 31 March 2016.” It was further stated in the opening paragraphs of the letter:

The result of the audit is:

Income tax K 458,822.21

Penalties K 229,411.05

GST K3,489,255.43

Total K4,177, 488.69.

2. Obviously enough, the abbreviation, “GST”, which we shall retain, was a reference to goods and services tax.
   
3. The Commissioner’s letter concluded with this statement, “If you do not agree with our decision you have the right to lodge an objection.” There then followed some advice as to how and where to lodge an objection and a reference to there being a 60-day time limit within which to do that.
   
4. Within that 60-day period, the company lodged with the Commissioner what at least purported to be an objection against purported assessments of income tax and GST notified by the Commissioner’s letter of 29 June 2016.
   
5. By a letter dated 6 October 2017, the Commissioner advised the company that he had allowed the objection “to the assessments” in part. A very substantial sum of income tax, GST and related penalties at least purportedly remained outstanding as a result of the allowing only in part of the objection.
   

The Commissioner advised that “immediate arrangements” should be made by the company for the settlement of its outstanding tax liabilities. He also advised in this letter that, if dissatisfied with the objection decision, the company could seek the review of it by the Tax Review Tribunal (Tribunal) or file an appeal in the National Court. He also gave advice as to applicable filing fees.

6. On 4 December 2017, the company gave notice to the Commissioner that it wished to have the objection decision reviewed by the Tribunal. It was common ground that the company gave this notice within 60 days of being notified of the objection decision. Enclosed with the company’s letter were applications for review in the prescribed form for each of the years of income from 2012 to 2016 (inclusive), together with a remittance of K250.00 (the prescribed fee) in respect of each review application. The company had thereby at least purported to institute applications for the review of the Commissioner’s purported objection decision by the Tribunal.
   
7. We have adopted the qualification “purported” in respect of the income tax and GST assessments, the objection, the objection decision and the application for review by the Tribunal deliberately. For reasons which follow, and notwithstanding much later diversion of effort in and out of court by those who once acted for the company and those acting for the Commissioner, it became clear on the hearing of the appeal that the Commissioner never had according to law made assessments or given notices of assessment to the company, either in respect of income tax or GST. Before explaining why this is so, it is necessary to complete what is, overall, a chronology of lamentable inattention to the then prevailing statutory requirements in respect of assessment, objection and review or appeal in respect of income tax or GST.
   
8. By a letter dated 6 December 2017, the Tribunal’s Chairman, by a subordinate, acknowledged receipt of the five review applications, advised that they had been placed on the Tribunal’s register and that the Tribunal would “contact you with further Directions in due course”.
   
9. There matters rested until 11 April 2019, when those then acting for the company wrote to the Tribunal requesting that the hearing of the company’s review applications commence as soon as possible. A fortnight later, those then acting for the company again wrote to the Tribunal at least purporting to withdraw the various applications for review and advising that the company intended now to file an appeal to the National Court.
   
10. On 22 May 2019, the company filed in the National Court an originating summons (OS No 360 of 2019) by which it sought that an order that leave be granted to it, “to file its appeal out of time, pursuant to s 155(4) of the Constitution”. In the National Court registry, this originating summons was, through no fault of either the company or the Commissioner, originally allocated a “JR” file number in the mistaken view that it was a judicial review proceeding.
    
11. On 18 October 2019, influenced, it seems, by a combination of submissions made by the parties and the misdescription by the registry of the proceeding as a judicial review proceeding, the learned primary judge assumed that there was a jurisdiction under s 155(4) of the Constitution to extend the time within which to appeal, or at least to grant leave judicially to review the objection decision, and declined to grant leave. In so doing, his Honour concluded (at paragraphs 2, 8 and 10) that the company had been assessed in respect of both income tax and GST. Influential in his Honour’s refusal of leave was that the company, having had the benefit of legal advice, had elected to seek review rather than to appeal and “has sat on [its] rights for two years”. The formal order of the National Court was to refuse leave to appeal out of time. The company was ordered to pay the Commissioner’s costs.
    
12. Initially, again informed it seems by the misdescription of the originating summons proceeding as a judicial review proceeding, the company initiated the present appeal by way of a notice of motion. This error was corrected by orders made by this Court at an interlocutory stage so as to deem the notice of motion to be a notice of appeal and to allocate an appeal number (SCA) in lieu of a motion number (SCM): Green International Ltd v Commissioner General of Internal Revenue [2022] PGSC 73; SC2269 (22 July 2022).
    
13. The grounds of appeal are prolix. It is not necessary to refer to them. That is because it became apparent in the course of submissions that there was one fundamental, underlying issue in the proceedings both in the National Court and in this Court on the appeal which was overwhelmingly in the interests of justice not only as between the parties but in respect of the administration of the nation’s revenue laws for this Court to determine. That issue was whether the company had ever been assessed and given notice thereof according to law by the Commissioner. It is fair to record that this issue only emerged before this Court, rather than before the learned primary judge. However, as mentioned, his Honour did conclude that the company had been assessed. This is one of those truly exceptional cases where the interests of justice demand that the Court permit an issue to be raised on appeal which was not ventilated below.
    
14. The Commissioner did make submissions concerning the ability of a person dissatisfied with an objection decision, having elected to pursue the alternative of an application for review, to purport to withdrawn a review application and instead to pursue an appeal, either at all or outside the statutory time limit. Also controversial was whether s 155(4) of the Constitution conferred any jurisdiction on the National Court to extend the statutory time limit for an appeal against an objection decision. It is desirable that we deal with the merits of these submissions. However, it became common ground between the parties that, whatever might be the merit of the Commissioner’s submissions on these issues, if there had never been any assessment or notice thereof according to law, there could never have been any lawful objection decision for the company to seek to challenge either by an application for review by the Tribunal or by a proceeding in the National Court.
    
15. It was also common ground between the parties that, if we concluded that no assessment either of income tax or GST had been made or notified to the company by the Commissioner’s letter of 29 June 2016, there was no other document in existence which even purported to constitute a notice of assessment of either income tax or GST in respect of the periods referred to in that letter.
    
16. Yet further common ground was that the Taxation Administration Act 2017 (TAA) was not relevant to any issue in the proceedings, because it came into force after the periods referred to in the Commissioner’s letter of 29 June 2016. It was put, in fairness rather faintly in the end, for the Commissioner that an amendment made of s 247 of the Income Tax Act 1959 (ITA59) by the Income Tax (2020 Budget) (Amendment) Act 2020 (2020 Budget Act) so as to condition the right of review or appeal upon payment of 50% of the tax in dispute was applicable. But there is nothing in the 2020 Budget Act which purports to give that amendment retrospective effect. That being so, whatever rights of challenge to an objection decision in respect of assessments covering the periods in question were unaffected by the amendment: see s 63(1)(c) of the Interpretation Act 1975.
    
17. We have therefore determined this appeal by reference to the ITA59 and the Goods and Services Tax Act 2003 (GST Act as they stood in respect of the 2012 to 2016 years. It may be that there are large questions to be resolved in some later proceeding as to how the ITA59, the GST Act and the TAA are to be construed in respect of rights of challenge to an objection decision. This is not the case to resolve any such questions.
    
18. Before proceeding further, it is necessary to set out some extracts from the ITA59 and the GST Act in respect of assessment, the notification thereof, objection and later appeal or review Income Tax
    
19. As to assessment, the ITA59 s 4(1) provides that, in the absence of any contrary intention (and none is presently apparent) an “assessment” means, “the ascertainment of the amount of taxable income and of the tax payable on that income”.
    
20. The ITA59, by s 231, confers a general power, and an associated duty, on the Commissioner to make an assessment of the amount of tax, “Where under this Act a person is liable to pay tax”.
    
21. By s 228(1) of the ITA59, it is provided that, “From the returns, and from any other information in his possession, or from any one or more of these sources, the Commissioner General shall make an assessment of the amount of taxable income or salary or wages income of a taxpayer and of the tax or salary or wages tax payable on that income. A power of making default assessments, where there is default by a person in lodging a return or where the Commissioner is dissatisfied with a return, is granted by s 229 of the ITA59. Section 230 of the ITA59 grants the Commissioner a power to make special assessments for particular periods. The Commissioner is also empowered, subject to conditions, to amend assessments: s 232. It is not necessary, for the purposes of this appeal, to consider that power of amendment.
    
22. Having made an assessment, the Commissioner is, in general, obliged to give notice thereof, termed a notice of assessment, to the person assessed to be liable to tax. A special deeming regime, which it is not necessary to explore, is applicable to salary or wages tax. All of this flows from s 236 of the ITA59, which provides:

236. NOTICE OF ASSESSMENT.

(1) Subject to Subsection (2), the Commissioner General shall, as soon as conveniently may be after an assessment is made, serve notice of the assessment in writing by post or otherwise on the person liable to pay the tax.

(2) Where salary or wages tax has been paid pursuant to Section 228(2), notice of assessment shall be deemed to have been served.

23. Parliament’s intention is that formal defects or irregularities should not invalidate an assessment. Thus, s 237 of the ITA59 provides:
    

237. VALIDITY OF ASSESSMENT.

The validity of an assessment is not affected by reason that any of the provisions of this Act have not been complied with.

24. A person dissatisfied with an assessment may object against that assessment, as provided for by s 245 of the ITA59:
    

245. OBJECTIONS.

(1) Subject to Subsection (2), a taxpayer dissatisfied with an assessment under this Act may, within 60 days after service of the notice of assessment, post to or lodge with the Commissioner General an objection in writing against the assessment stating fully and in detail the grounds on which he relies.
(2) Where the assessment has been amended in any particular, the right of a taxpayer to object against the amended assessment is limited to a right to object against alterations or additions in respect of or matters relating to that particular.
(3) Where a taxpayer lodges an application for refund of salary or wages tax in accordance with Section 214, that application shall, for the purposes of this Division, be deemed to be an objection.

25. In turn, by s 246 of the ITA59, the Commissioner is obliged to determine an objection.
    

246. DECISION OF COMMISSIONER GENERAL.

(1) The Commissioner General shall consider the objection, and may either disallow it, or allow it either wholly or in part, and shall serve the taxpayer by post or otherwise with written notice of his decision.
(2) The Commissioner General may, where he considers it necessary, require the taxpayer in writing to furnish information relating to assessment or objection, before making decision on the objections of the taxpayer.

26. The Commissioner’s determination of an objection engages the rights conferred on an objector taxpayer by s 247 of the ITA59, which provides:
    

247. APPLICATION FOR REVIEW OR APPEAL.

A taxpayer dissatisfied with the decision may, within 60 days after service of the notice either–

(a) make an application to the Review Tribunal for Review in the prescribed form; or
(b) file an appeal to the National Court in accordance with the National Court Rules.

Goods and Services Tax

27. The GST Act envisages that GST will, in the ordinary course, be a selfassessing tax by registered persons making taxable supplies. Thus, a registered person is obliged, by s 63 of the GST Act, to lodge a return for each taxable period and, by s 65 of the GST Act, to pay to the Commissioner, not later than the due date for the lodging of that return, the tax payable for that period, as calculated in accordance with s 31 of the GST Act. In general, that tax payable calculation, as s 31 of the GST Act reveals, entails, in respect of each taxable period, deducting from the amount of a registered person’s output tax attributable to that taxable period the amounts of that registered person’s input tax attributable to that same taxable period.
    
28. Although it is envisaged that, ordinarily, GST will, in the manner just described, be a self-assessing tax, integrity of the revenue is buttressed by the conferral, by s 67 of the GST Act, of a power of assessment in terms analogous to s 228 of the ITA59 but adapted to the different nature of GST. Thus, s 67(1) to s 67(3) of the GST Act provide:
    

67. ASSESSMENT OF TAX. (1) Subject to Section 72, the

Commissioner may from time to time, from returns furnished under this Act and from any other information in the Commissioner’s possession, make assessments of the amount that, in the Commissioner’s judgment, is the tax payable under this Act by – (a) a person required to furnish a return under this Act; or (b) a person, not being a registered person, who supplies goods and services and represents that tax is charged on that supply; or (c) a person whose registration has, under Section 44(6) been cancelled by the Commissioner, with effect from the date on which the person was registered under this Act; or (d) in the case of an assessment in relation to goods deemed to be supplied by a person under Section 53 – (i) the person selling the goods; or (ii) the person whose goods are sold, where any written statement supplied by that person under Section 53(a) to the person selling the goods is in the judgement of the Commissioner incorrect, and that person shall be liable to pay the tax so assessed except in so far as the person establishes an objection that the assessment is excessive or that tax is not payable. (2) Where – (a) a person is not satisfied with – (i) a return furnished by that person under this Act; or (ii) a return furnished under Section 54 by another person in relation to goods sold in or towards satisfaction of a debt owed by the person, and requests the Commissioner, in writing, to make any addition or alteration to that return; and (b) the Commissioner has not already made an assessment of the amount of tax payable in respect of the period to which the return relates, the Commissioner shall make an assessment of the amount that, in the Commissioner’s judgement, is the tax payable under this Act, and the person so assessed shall be liable to pay the tax so assessed except in so far as the person establishes on objection that the assessment is excessive or that tax is not payable. (3) Subject to Section 72, the Commissioner may from time to time and at any time make all such alterations in or additions to an assessment made under this section as the Commissioner thinks necessary to ensure the correctness thereof, notwithstanding that tax already assessed may have been paid.

29. Although, unlike the ITA59, the GST Act does not expressly define what constitutes an “assessment”, the nature of what is entailed in the making of a GST assessment is revealed by s 67(1) in particular.
    
30. By s 67(4), the GST Act also envisages that, in the ordinary course, the Commissioner will give the person assessed notice of his assessment but qualifies this by providing, by s 67(6), that a failure to do so does not invalidate the assessment. That qualification is underscored by s 69 of the GST Act, which provides:

VALIDITY OF ASSESSMENTS NOT AFFECTED BY FAILURE

TO COMPLY WITH ACT. The validity of an assessment shall not be affected by reason that any of the provisions of this Act have not been complied with.

31. A person subject to an assessment is, by s 74 of the GST Act, given a right to object against that assessment within not less than two months after the Commissioner has given notice of that assessment. In turn, the Commissioner is, by s 75(1) of the GST Act, obliged to consider such an objection and may, as a result, alter the assessment. If that objection is not wholly allowed by the Commissioner, a right to seek review of the objection decision by the Tribunal is conferred by s 75(2) of the GST Act, which relevantly provides:
    

“... the objector may, within two months after the date on which notice of the disallowance is given to the objector by or on behalf of the Commissioner, by notice in writing to the Commissioner require that the objection be heard and determined by the Review Tribunal, and in that event the objection shall be heard and determined by the Tribunal, and the provisions of the Income Tax Act shall apply in respect of the institution, hearing and determination of the proceedings on the objection.”

32. As an alternative to an application for review by the Tribunal, a dissatisfied objector is given a right, within two months of being given notice by the Commissioner of disallowance of the objection, to give notice in writing to the Commissioner that he desires the Commissioner to state a case for the opinion of the National Court: see s 77 of the GST Act. It is not necessary for

the purposes of the present appeal, to delve further into the elaborate provision made by s 77 of the GST Act in respect of the case stated procedure.

33. For completeness, we should mention that, s 81 of the GST Act makes provision for the Commissioner to invoke a test case procedure where a dissatisfied objector has chosen either to seek the review of the objection decision by the Tribunal or given notice that he wishes to have a case stated to the National Court. It is not necessary, in order to resolve this appeal, to detail the test case procedure.
    

Was there ever an “assessment” of income tax or GST?

34. As a matter of construction, and in respect of the provisions of the ITA59 and the GST Act which we have extracted above, it necessarily follows that the making of an assessment precedes giving notice thereof. The notice of assessment is the means by which a taxpayer is appraised by the Commissioner that he has made an assessment.
    
35. Australian authority is relevant by analogy. Such authority establishes, in Australia and in respect of income tax:
    
    • (a) An assessment must be the result of an “act or operation of the Commissioner”: R v. Deputy Commissioner of Taxation, ex parte Hooper [1926] HCA 3; (1926) 37 CLR 368, at 373 per Isaacs J).
    • (b) An assessment must lead to an ascertainment, on consideration of all relevant circumstances, including sometimes the Commissioner's opinion, of the taxpayer's taxable income and their tax payable: Hooper.
    • (c) An assessment must be definitive in character, rather than tentative or provisional^: Federal Commissioner of Taxation v. S Hoffnung & Co Ltd [1928] ArgusLawRp 103; (1928) 42 CLR 39; (1928) 1 ATD 310; FJ Bloemen Pty Ltd and

Simons v. Federal Commissioner of Taxation [1981] HCA 27; (1981) 147 CLR 360; 81 ATC 4280; (1981) 11 ATR 914); and

(d) An assessment must be served on the taxpayer by way of a notice of assessment. The giving of the notice is the completion of the process where the “Commissioner ... serves a notice that he has assessed the taxable income then the tax becomes due and payable”: Batagol v. Federal Commissioner of Taxation [1963] HCA 51; (1963) 109 CLR 243; (1963) 13 ATD 202, at CLR at 252; ATD at 204, per Kitto J.

36. As to income tax, the provisions of the ITA59 are sufficiently similar to those in Australia and considered in these cases to reach like conclusions in respect of an assessment and the giving of a notice of assessment under that Act. With the qualification that, although envisaged by the GST Act, a failure to give a notice of GST assessment does not invalidate that GST assessment, like conclusions may be reached in respect of an assessment under the GST Act. That very same view was reached in South Seas Tuna Corporation Ltd v Palaso [2019] PGSC 3; SC1761 in relation to the process of assessment of GST under the GST Act.
    
37. In each instance, it is the giving by the Commissioner of a notice of assessment, be that in respect of income tax or GST, which engages a right of objection. In turn, it is the service of the Commissioner’s decision in respect of the objection which enlivens the right of the objector taxpayer to seek the review of that decision or, in respect of income tax, appeal to the National Court or, in respect of GST, seek the invocation of the procedure for a case stated to the National Court.
    
38. As can be seen from the provisions of the ITA59 and the GST Act extracted, irrespective of which statutory pathway is chosen to challenge either an income tax objection decision or a GST objection decision, statutory time limits are applicable.
    
39. Although the ITA59 refers to an “appeal” to the National Court, an appeal to the National Court is better described as a form of statutory appeal, heard in that Court’s original jurisdiction but in accordance with its rules of court for appeals to the National Court (Order 18, rule 14A and following – Taxation

Appeals). In such an “appeal”, issues of fact and law are to be determined by reference to the grounds of objection. It is in no sense just a judicial review proceeding.

40. The starting point for each of the means by which an objection decision may be challenged is the existence of an “assessment”. In answering that question, both the ITA59 and the GST Act envisage that formal defects and irregularities will not invalidate an assessment.
    
41. The difficulty in this case is that, read as a whole, the Commissioner’s letter of 29 June 2016 does not constitute either an assessment of income tax or an assessment of GST. Instead by that letter, the Commissioner notifies the end

result of his audit and foreshadows that he will, in the future, make applicable, related assessments.

42. In respect of income tax, it is stated, “The amount of income tax that will be assessed will be as follows (with amounts then detailed in respect of the 2012, 2013 and 2014 income years)” (emphasis added). It is then stated, “We will be amending the 2012 and 2014 income years” and “We are not amending 2013 as we have accepted 2013 at face value” (emphasis added).
    
43. As a matter of ordinary English, the Commissioner’s use of the future tense, “will be” indicates that the necessary formal act of making an assessment will occur in the future, with notice thereof necessarily following that. It is just that, by his letter, the Commissioner has signified how he intends to make his assessment in the future.
    
44. The position revealed by the letter is no different in respect of GST. In the letter the Commissioner states, “Therefore we will be assessing your GST liability from 1 January 2012 to 31 March 2016” (emphasis added). Once again, all that has occurred is notification of the result of an audit and related details about the way in which an assessment will in the future be made.
    
45. It was certainly possible for the Commissioner to have notified the result of his audit and to have enclosed related, applicable notices of the resultant assessment which he had made. However, reading the letter as a whole, this is not what he did.
    
46. That being so, no amount of reference at the conclusion of the letter to a right of objection could confer such a right in the absence of the making of an assessment of income tax or GST by the Commissioner and his giving notice thereof. Put shortly, a right of objection stream cannot rise higher than its making of assessment and notification thereof source.
    
47. What necessarily follows from this is that the learned primary judge was, with respect, wrong to conclude that there had been assessments. That being so, even if it were possible for the company to withdraw its chosen Tribunal pathway, or even if it were possible to extend out of time a right to institute an income tax appeal or the case stated procedure, there was never any valid objection decision to challenge. A valid objection decision depended upon there being an objection against an assessment which had been made and notified. In neither the case of income tax nor GST did the Commissioner make, much less notify, an assessment. For the reasons given, he did not do so by the letter of 29 June 2016. There is no evidence that he otherwise did so. To the contrary, the evidence is that he was intending to make his assessments in the future, and never has.
    
48. None of this is to say that, had the Commissioner made and notified assessments, it would have been possible either to commence a taxation appeal or invoke the case stated procedure after having earlier chosen the Tribunal review procedure. Nor is it to say that it was possible, under s 155(4) of the Constitution to extend the statutory time limits in the ITA59 or, as the case may be, the GST Act in respect of the challenging of an objection decision.
    
49. The rights of challenge to an objection decision conferred by the ITA59 or, as the case may be, the GST Act are true, mutually exclusive alternatives. It is not possible to pursue each. A dissatisfied objector taxpayer must make an election as to which alternative to pursue. The relevant general principle was stated by Lord Blackburn in the House of Lords in Scarf v Jardine (1882) 7 App Cas 345 at 360-61:
    

“The principle, I take it, running through all the cases as to what is an election is this, that where a party in his own mind has thought that he would choose one of two remedies, even though he has written it down on a memorandum or has indicated it in some other way, that alone will not bind him; but so soon as he has not only determined to follow one of his remedies but has communicated it to the other side in such a way as to lead the opposite party to believe that he has made that choice, he has completed his election and can go no further; and whether he intended it or not, if he has done an unequivocal act – I mean an act which would be justifiable if he had elected one way and would not be justifiable if he had elected the other way the fact of his having done that unequivocal act to the knowledge of the persons concerned is an election.”

50. The company did not just elect to pursue review by the Tribunal in respect of each of the income tax and GST objection decisions. It communicated that election to the Commissioner in an unequivocal way by the various applications for review. It did so with the benefit of professional advice. It is not necessary to consider in the circumstances of this case (assuming, contrary to the conclusion reached, that there were assessments) whether there may be exceptions to the general principle stated in Scarf v Jardine. Instead, on the facts, and on the assumed basis that there were “assessments”, the company made a binding election. That having occurred, it was not possible to withdraw the choice to pursue Tribunal review and embark upon an alternative. All that withdrawal would do would be to bring to an end the Tribunal review process.
    
51. Again on the basis assumed, the Tribunal’s delay in embarking on the hearing of the review sought was, on the evidence and with respect, truly lamentable. In making that observation, we are conscious that the Tribunal is not a party. It is just that, if there is some explanation for the lengthy delay, none is apparent on the evidence. However that may be, faced with inordinate delay on the part of the Tribunal, the remedy for an aggrieved objector taxpayer is not, as occurred here, to seek to withdraw a binding election and embark upon the alternative means of challenging an objection decision. Rather, the remedy is to seek from the National Court an order in the nature of a mandamus requiring the Tribunal to discharge its statutory function. The Commissioner’s submissions to this effect on the appeal should be accepted.

52. Another submission made by the Commissioner on the appeal was that it was not possible under s 155(4) of the Constitution for the National Court to extend the time limits specified in the ITA59 and the GST Act for challenging an objection decision. This submission also should be accepted.

53. The position which prevails in respect of an appeal to the Supreme Court from the National Court is relevant by analogy. By s 17 of the Supreme Court Act 1975, a time limit is specified in respect of the institution of such an appeal. The appeal must be commenced within 40 days after the National Court judgement concerned or within as is allowed by a judge on an application made within that 40 days. This Court has consistently held that it has no power to hear an appeal not commenced within the time specified in s 17 of the Supreme Court Act: see, for example, Ken Norae Mondiai v Wawoi Timber Co Ltd [2007] SC886; Jeffrey Balakau v Ombudsman Commission of Papua New Guinea [1996] PNGLR 346. In such cases, s 155(4) of the Constitution is not a source of power for this Court to extend the time limit specified in the Supreme Court Act. Rather, where the right of appeal has been lost by a failure to institute an appeal within the period specified in s 17 of the Supreme Court Act, this Court may, in the circumstances of a given case and after considering such explanation as is given for that failure and the prospective merits of a proposed challenge to the National Court judgement, grant leave to review that judgement under the constitutionally entrenched, judicial review jurisdiction conferred by s 155(4) of the Constitution. Such a review is different in character to an appeal against the National Court judgement.

54. In the same way, s 155(4) of the Constitution confers no power on the National Court to extend the statutory time limit for an appeal to the National Court against an income tax objection decision or for the statement of a case to the National Court in respect of a GST objection decision. Instead, if an objector taxpayer had for some reason missed the time limit in these Acts either to seek review by the Tribunal or the National Court alternative, the National Court might, for cause, be persuaded to grant leave judicially to review the objection decision under s 155(4) of the Constitution. Once again, an acceptable explanation for delay would be a relevant consideration, as would prospective merits. Also relevant in our view would be the public interest in timely finality of revenue law controversies, as manifested by the specified statutory time limits for the challenging of an objection decision.

55. The company submitted that Placer Holdings Pty Ltd v The Independent State of Papua New Guinea [1982] PNGLR 16 was an authority which supported a conclusion to the contrary, i.e. that s 155(4) of the Constitution did authorise the extending of a statutory time limit. This, with respect, is based on a misreading of the reference in that case, at 19, to s 155(4) of the Constitution by Greville Smith J (with whose reasons Kearney DCJ agreed). All that that case stands for is that, on its true construction and contrary to the conclusion of the primary judge in that case, s 121(2) of the Land Act 1962 conferred a discretionary power on the National Court to extend the time for an appeal even after the ordinary time limit had expired. The Court called in aid s 155(4) of the Constitution as a source of power to quash the orders made in the National Court and to remit the question of whether an extension should be granted to that court, not as a source of the power to extend the time for an appeal. The Court’s remitter order in that case required the National Court to consider afresh under the Land Act as properly construed whether to grant the extension requested. In the present case and in contrast, neither the ITA59 nor the GST Act confers any power to extend the time for an appeal against an income tax objection decision or to seek a case stated in respect of a GST objection decision.

56. It is not necessary for us further to consider the possible application of s 155(4) of the Constitution as a means of challenging an objection decision, only to recognise that it could never be a source of power to extend the statutory time limits specified in respect of the means of challenging an objection decision ordained by the ITA59 or, as the case may be, the GST Act. Especially this issue is unnecessary to consider, because there never were, in the circumstances of the present case, any “assessments” notice of which would enliven an ability to object.

57. The result is that it ought to have been concluded in the National Court that there had never been an assessment notice of which had been given by the Commissioner’s letter of 29 June 2016. Beyond seeking a declaration to this effect by the National Court, a proceeding in that court so as to extend a statutory time limit under s 155(4) of the Constitution was misconceived. Indeed, the evidence in this case reveals a litany of successive misunderstandings of the meaning and effect of the ITA59 and the GST Act, commencing with the Commissioner’s incorrect advice in his letter of 29 June 2016 that there then existed a right of objection. We add that there is no evidence that this advice was given other than in good faith. It is necessary to declare what, in the circumstances, is in law the true position.

58. Both the company and the Commissioner have contributed to this litany of successive misunderstandings. Further, although the company has succeeded in persuading us that no assessment has been made either of income tax or GST and that a related declaration ought to be made, that issue was not one in terms raised before the primary judge. As presented to the primary judge and as pressed in grounds of appeal, the company misconceived the consequence of having elected to pursue review by the Tribunal and also misconceived the ability to extend statutory time limits for challenging an objection decision. On these issues, the Commissioner enjoyed success. In these circumstances, it appears to us that a just exercise of the costs discretion is that each party should bear its or his own costs, both in this Court and in the National Court.
59. For the avoidance of any doubt, we record that the company expressly disavowed any suggestion that it was no longer lawfully possible for the Commissioner to make and give notice of the income tax and GST assessments foreshadowed in his letter of 29 June 2016. By the same token, in the present absence of any such assessments, it is axiomatic that the company is not presently indebted to the State in respect of the amount said to be remaining after the Commissioner’s objection decision.

Orders

1. The appeal be allowed.
2. The orders of the National Court in proceeding OS (JR) 360 of 2019, made on 18 October 2019, be set aside.
3. In lieu thereof, it be declared that:
   1. The respondent’s letter to the applicant (present appellant) of 29 June 2016 did not evidence the making of any assessment or notice of the making of any assessment by the respondent either for the purposes of the Income Tax Act 1959 or the Goods and Services Tax Act 2003.
   2. As a necessary consequence, no right of objection under either of these Acts has yet arisen and, also necessarily, no power to make an objection decision or right to challenge the same in a manner prescribed by these Acts has yet arisen.
4. There be no order as to costs, either in respect of the proceedings in the National Court or in respect of the appeal to this Court.

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SLM Legal Practice: Lawyers for the Appellant
In-house Counsel IRC: Lawyers for the Respondent