Bayconnection Property Developments v Commissioner of Taxation [2013] AATA 40

The Administrative Appeals Tribunal has handed down its decision in the case of Bayconnection Property Developments v Commissioner of Taxation [2013] AATA 40, confirming that the Commissioner could recover GST refunds paid to the taxpayers which were based on input tax credits (ITC) to which they were not entitled.

The taxpayers in this case were a group of family-owned companies established for a property development project that failed to eventuate.

The ITC claims had no foundation, as none of the taxpayers was carrying on an enterprise over the relevant tax periods, "even taking into account the extended statutory definition of “carrying on” an enterprise that includes “doing anything in the course of the commencement or termination of the enterprise”." The court found that the applicants did not make any creditable acquisitions because they did not acquire anything in carrying on an enterprise.

Administrative penalties of 75%, increased by 20% for intentional disregard of taxation laws, were confirmed. The court concurred with the Commissioner that there were no circumstances warranting remission of penalties.

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