The Star Entertainment Group has filed court proceedings against the Australian Taxation Office seeking to have interest charges on a tax bill cancelled, saying the ATO acted “unfairly” by not adhering to the terms of a 2001 settlement agreement.
The gambling giant instituted proceedings on September 6 asking the Federal Court to review Deputy Commissioner of Taxation Rebecca Saint’s August 10 decision not to reduce or cancel general interest charges for its unpaid tax from October 1, 2013 to August 31, 2017.
Saint found interest was owed on a shortfall amount following an audit and granted The Star a partial release from the interest because of delays in beginning and completing the audit.
The decision was an “improper exercise” of Saint’s power under the Tax Assessment Act because it failed to consider a January 17, 2001 settlement agreement under which the Commissioner of Taxation agreed the entertainment giant would not be liable for interest on unpaid tax, the lawsuit says.
The Star, which runs casinos in Sydney, Brisbane and the Gold Coast and a number of hotel food and beverage and retail businesses around Australia, alleges Saint breached the rules of natural justice by failing to follow the settlement agreement, which “resulted in unfairness and justified judicial intervention to quash the decision”.
“In light of the settlement agreement, [The Star] could not have known that a shortfall would arise when it lodged its original business activity statements,” The Star said.
“The…matters constitute special circumstances because of which it would be fair and reasonable to further remit all or a further part of the GIC.”
In making the decision to impose the charge, Saint exercised her power “in a way that is so unreasonable that no reasonable person could have exercised the power”, The Star alleges.
The Star says Saint’s decision not to entirely remit the general interest charge was “invalid, void and of no effect” and seeks an order setting it aside and cancelling entirely the charge for one or more of the shortfall periods.
The ATO has declined to comment.
The Star is represented by King & Wood Mallesons.
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