NZ Supreme Court grants leave to appeal in Stiassny case, plus hands down decision in de-registration case

On 8 May 2012 the NZ Supreme Court granted leave to the taxpayer to appeal the decision of the Court of Appeal in Commissioner of Inland Revenue v Stiassny [2012] NZCA 93 where the NZ Court of Appeal allowed the appeal by the Commissioner and found that the claim for a refund of GST by the receivers appointed to the partners in a GST-registered partnership should be struck out.  To see my post on the decision of the Court of Appeal, click here.

In a matter which has implications for restitution and insolvency law, as well as GST, the approved grounds are appeal are:

  • whether the GST payment was a “debtor-initiated payment” in terms of s 95 of the Personal Properties Securities Act 1999 so as to confer priority to the Commissioner over any claim to those moneys by any respondent;
  • whether any of the appellants can recover the amount of GST so paid from the Commissioner on the basis that it was paid by the receivers under a mistaken belief that they were personally liable to pay it or on any other basis.

In further news, the Supreme Court today handed down its judgment in Lewis G H Thompson v Commissioner of Inland Revenue [2012] NZSC 36 upholding the decision of the Commissioner to re-register a taxpayer who had de-registered for GST before disposing of real property.  The case provides an interesting insight into the “turnover threshold” provisions in the NZ legislation, which are focused solely on the future operations of the enterprise and include the disposal of capital items in the test.  This can be compared to the provisions in Division 188 of the GST Act, which have both a “pre” and “post” test and exclude the disposal of capital items from the “post” test.

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