Ha & Anor v NSW & Ors S45/1996 [1997] HCATrans 103 (18 March 1997)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S45 of 1996

B e t w e e n -

NGO NGO HA

First Plaintiff

SOKHIENG LIM

Second Plaintiff

and

STATE OF NEW SOUTH WALES

First Defendant

BRUCE BUCHANAN

Second Defendant

R. G. SMITH

Third Defendant

Office of the Registry

Sydney No S165 of 1996

B e t w e e n -

WALTER HAMMOND & ASSOCIATES PTY LIMITED

Plaintiff

and

STATE OF NEW SOUTH WALES

First Defendant

BRUCE BUCHANAN

Second Defendant

I.P. SMITH

Third Defendant

Case Stated

BRENNAN CJ

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 18 MARCH 1997, AT 10.21 AM

(Continued from 13/3/97)

Copyright in the High Court of Australia

BRENNAN CJ: Yes, Mr Solicitor.

MR GRIFFITH: Your Honour, it is such a nice day out there this morning, I intended to start like Mr Langer and say, "G'day". Perhaps the day will degenerate from now on. I hope not.

Your Honours, to pull the threads together from the adjournment on Thursday, may I address a few remarks on what we mean in our submissions on a free trade area. Your Honour, perhaps I could preface - - -

GUMMOW J: Is there any succinct written statement in propositional form of what the Commonwealth's submission is on structure, Mr Solicitor?

MR GRIFFITH: Your Honour, if we were asked to state something succinct, we would pick up what is said in Capital Duplicators [No 2] at pages 275 to 278, particularly 277, 278.

GUMMOW J: That is what somebody else said. Is there any outline in written form from the Commonwealth outlining in succinct manner what is said to flow from structure?

MR GRIFFITH: Your Honour, yes. Your Honour, what flows from the structure is that which is set out in the first part of our submissions, paragraph 2 and, your Honour, I was to say as I entered into this area that our submissions before the Court today and on Thursday are built entirely on the structure of our written submissions which do seek to state in succinct form what it is that we state is the issue, firstly, with respect to the free trade area, and your Honours will see when you go on to page 10 of our submissions, we make the argument briefly in our written submissions that the conclusion is the same for the purpose of section 90, to safeguard Commonwealth tariff or trade policies.

GUMMOW J: That does not, as I see it, deal, for example, with section 95, does it?

MR GRIFFITH: I beg your pardon, your Honour?

GUMMOW J: Chapter 2, which goes from pages 4 to 13, a number of pages, does not deal with the significance you say should be placed, as a matter of structure, from section 95.

MR GRIFFITH: Yes, your Honour. I mentioned section 95 in our submissions on Thursday, your Honour, and I intend to return to it.

GUMMOW J: Yes, I know, but it is not in your written submission, that is what I am trying to get at.

MR GRIFFITH: Your Honour, when we have a 20 page limit, we cannot put everything in our written submissions.

GUMMOW J: Yes, all right.

MR GRIFFITH: Your Honour, I do not intend to evade your Honour's answer, I hope I have not, but, your Honour, we did rely on section 95 - - -

GUMMOW J: The longer these submissions are, the less they lack punch, to my mind.

MR GRIFFITH: The oral ones or the written ones, your Honour?

GUMMOW J: The written ones.

MR GRIFFITH: Your Honour, therefore, they have a lot of punch, in our submission, in their 23 pages.

GUMMOW J: All right.

MR GRIFFITH: There comes a time, your Honour, in which they might get too short and you have not got enough room to load the ammunition.

GUMMOW J: Yes.

MR GRIFFITH: Our submission is that the structure is in our written submissions, your Honour, but it is necessary to deal with the six diverse arguments and the some 20 centimetres of written material which has been filed against us. Your Honour, your reference to section 95 excites me to respond, that we refer to as supporting the construction we make, not establishing it in itself. Your Honour, our source for the authority for reference to free trade area is Chapter IV itself, in its entirety. Your Honour, we say that this concept of free trade area, which is established by this chapter in particular, sections 90 and 92, is something which, of course, is uncontroversial. It is one - - -

DAWSON J: It is if it is established by section 90. Section 90 has nothing to do with it, section 92 is the section.

MR GRIFFITH: Your Honour, we are dealing here with the imposition of border duties, and our submission is that, if I may be permitted to refer to someone sitting on the cross-benches behind me, Professor Zines, in his fourth edition at page 145 says:

It has always been accepted that section 92 prevented the imposition of any border duties in so far as this object was not accomplished by section 90.

DAWSON J: I did not catch the last part, "in so far as"?

MR GRIFFITH:

this object was not accomplished by section 90.

So, your Honour, we submit that Professor Zines is right to identify section 90 as the principal provision on the border duties issues.

DAWSON J: But he does not explain how it does it. How does it do it?

MR GRIFFITH: Your Honour, in our submission, it does it in the way that we adumbrated in our written submissions and in - - -

DAWSON J: What you get, when you have a uniform excise duty in the State that is imposed upon goods, whether they are imported or whether they are produced in the State, is a raised price.

MR GRIFFITH: Yes, your Honour.

DAWSON J: A raised price does not constitute a barrier at the border.

MR GRIFFITH: Your Honour, in our submission, that is exactly what it does constitute.

DAWSON J: It does not.

MR GRIFFITH: Your Honour, that is where we differ.

DAWSON J: We just disagree then. You get raised prices all the time. There are separate economies, there are various taxes, there are various impositions, there are various assistances. There are various ways in which the State can alter the cost of producing goods or selling goods quite legitimately. Once you say that, what you are suggesting is that you have an integrated economy produced by sections 90 and 92 which do not see separate economies in the States. You do not.

MR GRIFFITH: Your Honour, we rely on the submissions we made on Thursday.

DAWSON J: If you say that the opposite is the case, I listen to you, but it simply is just not the case.

MR GRIFFITH: Your Honour, our submission remains that "integral" in Chapter IV is the mandated requirement that there not be imposts on goods effectively coming into the State and - - -

DAWSON J: That is top-down reasoning and you have no basis on which to support it except the assumption that Sir Owen Dixon made.

MR GRIFFITH: Your Honour, our submission is it is not top-down reasoning. It is based on the words of the Constitution itself.

DAWSON J: That is to make an assumption as to their meaning.

MR GRIFFITH: Your Honour, meaning must be given to them and we seek to give direct meaning.

DAWSON J: Very well.

MR GRIFFITH: Your Honour, our exchanges have identified our differences on this point and perhaps I should lose heart and realise that it seems our submissions on this aspect are unlikely to in the end attract your Honour, but that is - - -

DAWSON J: Well, unless you can give some reasons.

MR GRIFFITH: Your Honour, with respect, we have sought to give reasons in our submissions to date and we will seek to enlarge on that.

DAWSON J: Yes.

MR GRIFFITH: The importance of the guarantees by section 90 to achieving this internal free market is something one sees referred to by Justice Windeyer, if I may make a passing reference, in Western Australia v Chamberlain Industries Pty Ltd [1970] HCA 5; 121 CLR 1, particularly at pages 26 and 27, where his Honour referred to section 90. On page 27, referring to what he says is the "purpose manifestly behind particular provisions", he said:

The Constitution is obviously designed to ensure the powers and position of the States as political elements of a federation. It is equally designed to ensure the power and position, and to promote the unity, of the new nation called into being.

In many countries national unity has flourished with the removal of trade barriers enabling a free flow of trade and commerce across internal boundaries.

Then he refers to section 51(i) and goes on to say:

and that legislative competence in ways which would make for commercial disunity should be denied to the States, hence s 90; and that freedom of movement of trade and commerce across State boundaries should be guaranteed by law, hence s 92.

Your Honours, we will seek to make in our submissions that the effect of an impost on goods at the time of sale when they are brought into the State from other States, and also when they are brought directly into the State from overseas, does have the effect, in our submission, of imposing an impost in substance on the good as it comes into the State. As we mentioned on Thursday, in our submission, there can be no attachment of a State impost on a good not in a State unless and until it does come into the State.

So, your Honours, we say irrespective of the conclusion which one might reach as to the extent of free trade areas created by Chapter IV - and we refer again to the majority in Duplicators [No 2] - at its lowest, the free trade zone was intended to secure, in our submission, free trade in the sense of trade without frontiers; that we say goods should not become the subject of State taxes simply because they have crossed a boundary. It is our submission that by reading section 90 narrowly, as the Court is now being invited to do, is to allow the States to impose taxes upon the sale of distribution of goods and it would, in effect, permit the States to re-erect those trade barriers which were dismantled at Federation - we say is the substantial matter to be attended to at Federation.

Your Honours, some confirmation of that is found by the fact that in the 97 years since Federation, no State impost has sought to do that. It is not the case that any of the protagonists here can say that the States have acted on the basis that they have any capacity to impose the sort of imposts which they seek the Court to give them authority to do so. States, in 97 years, just have not attempted to impose a sales tax on goods indiscriminately of whether they are manufactured in the State or Territory, elsewhere in the Commonwealth, or whether they are imported goods.

States do not do it, and the reason why they do not do it is, until 1997, it has been recognised by the States, by the Territories and by the Commonwealth, and we say by this Court, that there is no power to do so because such an impost would constitute an excise which is prohibited by section 90. Now, if it is the case that the point is now made that, well, the impost on goods brought into the State, whether it be imported from overseas under the uniform tariff ring - nowadays it is a free trade ring, or moving in that direction -or whether or not it is the case that they are manufactured and produced in other States and Territories and brought into the State, in our submission, if taxes are imposed on the goods at the point of sale that, in substance, amounts to the same thing as a duty of customs at the border.

Your Honours, that is the advantage, in our submission, of the reference to section 95 because we there have a clear expression of the intention of the Constitution as to how such imposts should be regarded. Section 95 is directed, not to goods which are imported into Australia, the other parts of the Federation from overseas, were directed solely to the issue of goods being brought into a State after Federation when they were produced and manufactured in one of those other States - there were not Territories then - and then brought into the State for consumption.

What section 95 does, perhaps it is somewhat archaic and no doubt appropriate at the time, to refer to that State impost as being a duty of customs because when section 95 was drafted that is exactly what it was for the colonies. A duty of customs was not an impost on goods brought into Australia. The ring did not exist then. In 1900 when the Constitution was in its final form and during the decade previously when it was being drafted a duty of customs was an impost imposed by each colony on goods which came into that colony, whether they came from overseas or whether they came from within Australia from other of the colonies.

McHUGH J: But, Mr Solicitor, perhaps one way of reconciling the two extreme positions is to take the economists' view of what constitutes an excise and say that when taxable commodities are individually enumerated under the law then depending at the point where they are taxed it will be a customs or an excise, but if you have a general law which can be regarded as a sales tax which does not enumerate goods then it is neither a tax nor a customs, except in very special circumstances.

MR GRIFFITH: Your Honours, we would wholly disagree with that suggestion.

McHUGH J: I am sure you would.

MR GRIFFITH: We submit that it is not for a modern day economist to impose their definition on what they regard as sales tax. Your Honour, in 1900 GST and BST were not thought of. In 1900 sales tax was not thought of. There was merely an impost, within Australia at any event, on production and manufacture of a few goods, mostly those relating to the sin of alcohol and tobacco.

DAWSON J: Perhaps that shows up the limited nature of the tax which was referred to in the Constitution. For instance, would you say that a value added tax was an excise?

MR GRIFFITH: On goods, yes.

DAWSON J: Not on goods because it is on services as well.

MR GRIFFITH: Your Honour, a value added tax may be on goods and services. If it is imposed on goods - - -

DAWSON J: It is. By hypothesis I am putting it.

MR GRIFFITH: It is proscribed to the States.

DAWSON J: Why?

MR GRIFFITH: Your Honour, because it is an impost on goods in Australia.

DAWSON J: You assert that but if that is so, why is not a payroll tax an excise?

MR GRIFFITH: It is not an impost on goods, your Honour.

DAWSON J: But it is. It is just as much adding to the cost of goods manufactured when it is imposed upon the manufacturer.

MR GRIFFITH: Your Honour, in effect, we have once more the authority of the Court that that is not so. No one seeks to argue - - -

DAWSON J: Let us just talk about the theory for the moment. The authority of the Court is in a somewhat muddled state. Just look at it. How do you distinguish payroll tax in those circumstances?

MR GRIFFITH: Your Honour, we submit that it is not an impost on goods either by applying criteria of liability or with the additional aspects of the substantive test.

DAWSON J: Why is it not? It enters into the price of goods just as much as a VAT does.

MR GRIFFITH: Your Honour, we say because it does not have the characterisation of being imposed on goods.

DAWSON J: Why has it not any more than or any less than the payroll tax imposed on a factory manufacturing goods?

MR GRIFFITH: Your Honour, because it is not imposed on the goods that are manufactured.

DAWSON J: It is imposed on those goods just as much as the VAT is imposed on goods when it falls on goods.

MR GRIFFITH: Your Honour, in our submission, in 97 years a distinction has been able to be made with clarity that this really - - -

DAWSON J: There is no clarity in the distinction there in my mind.

MR GRIFFITH: Your Honour, I have referred already to the payroll tax.

DAWSON J: The point is that the VAT applies to goods and services alike. A payroll tax may be imposed on people who produce goods and on people who do not produce goods.

MR GRIFFITH: Your Honour, in our submission, the Commonwealth may impose the GST/VAT on goods.

DAWSON J: I know that but I am talking about a State VAT.

MR GRIFFITH: You cannot do it, your Honour; cannot impose it on goods, in our submission.

DAWSON J: But what is the difference between a VAT imposed on goods and a VAT imposed upon services?

MR GRIFFITH: The impost on goods is proscribed by section 90 in Chapter IV of the Constitution.

DAWSON J: You see, we go round in circles. It is merely an assertion. You have not one test that can identify what is exclusively a tax on goods in those circumstances.

MR GRIFFITH: If your Honour will refuse to accept my test - - -

DAWSON J: What is the test?

MR GRIFFITH: - - -that the inquiry is whether there is an impost on goods, your Honour.

DAWSON J: Yes, but that is merely begging the question. Goods do not pay taxes, people pay taxes, and it is the relationship between the person who pays the tax and the goods which determines its character. What is the difference in character between the relationship of a person who has, say, a payroll tax imposed on him when he produces goods and a person who has VAT imposed on him in relation to this?

MR GRIFFITH: Yes. Your Honour, I was intending to refer to something your Honour said with respect to taxes on property - - -

DAWSON J: You can take that on board.

MR GRIFFITH: - - - but may I take that in order, your Honour?

DAWSON J: Yes.

MR GRIFFITH: We do seek to address your Honour's problems, I should add in parenthesis, "as best we may", your Honour, but I do understand with clarity how your Honour sees it, but perhaps I should return to answer Justice McHugh's question and, your Honour, what we say is that a sales tax was not an impost which was understood in 1900, there were not sales tax in Australia, but in our submission, your Honour, a sales tax indiscriminately on all goods, or all goods of a particular type, is full fair and square an excise - - -

McHUGH J: But there may not have been a sales tax in 1900, I accept that there was not, at least I do not know of any, but nevertheless, were not duties of excise and duties of customs taxes on commodities which were individually enumerated?

MR GRIFFITH: Your Honour, if one has regard to the position in 1800, it is even more narrow. Your Honour, we do have a table which has now being settled in its final form, and I will hand it up, to indicate what were the corresponding duties of customs on the very same goods which were made subject to duties of excise. I will not hand it up yet, your Honour, because - it has been cross-checked, your Honour, so perhaps I could hand that table up, and what that indicates generally, as one might expect, the very few items of spirits, beers, tobacco and cigars which were made subject to duties of excise at Federation, were also - - -

McHUGH J: If you talk about being a tax on production or manufacture, it tends to reduce the constitutional protection to formal significance. Perhaps the same argument can be said about individual enumerations, although I do not think so.

MR GRIFFITH: We would, with enthusiasm, your Honour, we would say to no significance because, your Honours, it might have been at Federation there was concern about the aspect of tariff barrier, bounty, protection, promote local industry by bounties or tariff protection both for the colonies individually and, after Federation, for the country as a whole, but nowadays, your Honour, this whole aspect of protection of trade by tariff or encouragement by bounty is all economically passe. There are international obligations arising from VAT. One saw it recently in the attempt by the Australian Government to maintain a bounty for its production of leather for car seats to be sold to the United States, whereby the sanction of a threat of WHO action was enough to cause Australia to back down. It is not just legal obligation of Australia. It becomes a matter of international threat. The President of the United States comes out and deals with it.

This is how these matters are nowadays, your Honours. We are not talking about the issue of tariff encouragement, bounty encouragement and protection. We are talking about straight revenue raising imposts and, in our submission, your Honour, the heart of the modern revenue raising impost on goods is the indiscriminate tax on all goods which, we say, is a sales tax or, as Justice Dawson points out, in its modern form the GST/VAT.

McHUGH J: Yes, what you have just said about current economic doctrine and international obligations means that what you assert is the historic purpose of the Constitution is spent and, although there was always a revenue raising aspect to customs and excise, on the whole, I think, they did have more fundamental objects.

MR GRIFFITH: Your Honour, I hope the way you are putting it that we say it is not the way that the whole Court regards the same because we wish to make it clear, your Honour, our principal submission is on the free trade aspect, but we deal also separately, as we do on part C page 10 and following of our written submissions and also in our oral submissions, with the narrow argument put on the tariff issue and say even on that narrow issue, in our submission, the answer is quite clear, but the free trade issue, your Honour, is something which we say stands principally entirely alone and our submission is it establishes to the hilt the proposition which we make that what is foreclosed to the States is the capacity, in effect, to impose imposts on the border and to impose imposts on all goods. We say any goods and all goods.

If it is done by the modern shorthand of all goods, it is revenue raising. Of course, that is what excise is for. It was, as we know from the table attached to our written submissions, the principal tax in the colonies at federation and, your Honours, to say that there is any difference between item by item, the vegemite/marmite approach and having in globo sales tax, in our submission, your Honour, is as much to abrogate the constitutional prohibition as if it were entirely repealed.

McHUGH J: Not necessarily. It just may give effect to its terms. The real question is what is a customs and what is an excise.

MR GRIFFITH: Yes. Your Honour, we submit there is no difficulty about customs because customs is an impost on entry and, notwithstanding Mr Selway's submissions about that, that remains our submission. Our submission, your Honour, is that an impost on goods, once they are in Australia, whether they are imported or manufactured in Australia and whether they are produced in the State imposing the impost for State reference purposes or come in from another State, that all such imposts on goods, in our submission, once they are characterised as being an impost on goods, in our submission, are an excise and that it matters not that they are imposed generally as a sales tax.

Your Honour, our submission is that sales tax, for example, as imposed by, I think, the 15 Acts of the 1930 Commonwealth legislation or by the three application Acts of the current scheme, all impose on goods within Australia duties of excise, all Sales Tax Acts, your Honour, apart from those which impose separately as required by section 55 duties of customs.

The scheme of the three Acts nowadays, of course, is to ensure, whatever the content in the difference, that the application does comply with section 55. In 1930, it was a little bit more uncertain, so there was something like 15 application Acts to get the same result. Your Honours, I have handed this chart to the Court to indicate that, as one might expect, the customs duty on these goods was somewhat higher that the local impost at Federation because, of course, all States, except New South Wales, were firmly protectionist.

One will see in New South Wales, in fact - perhaps it is harking back to Rum Rebellion days - the impost on spirits, imported and local, was the same. But by and large, for the other States, the imposts on spirits - be it tobacco, cigars, cigarettes - is higher in respect of the colonies for customs duties than for the local excise. In fact, Victoria obviously took a strong view about imported cigars. I see they are six shillings a pound, whereas, local cigars - they are ninepence a pound. Who would smoke a local cigar?

Your Honours, so, in our submissions, section 95 is useful to indicate this point we desire to make that, in essence, a sales tax on goods which are imported into the State for sale is an impost of the same sort which obviously was proscribed by Chapter IV of the Constitution, because section 95 had to create a limited exception to operate on a declining basis for the special case of New South Wales, presumably as an inducement for Western Australia to come into the Federation. Now, the other aspect, of course, section 92 does have work to do, but that only operates to protect discriminatory taxes for a protectionist reason. So, for a start, if there is no local industry, then section 92, one would expect ex facie would have no work to do.

BRENNAN CJ: Mr Solicitor, you are referring to taxes on goods, and perhaps that is the term that needs definition.

MR GRIFFITH: Yes. I was going to do that next, your Honour.

BRENNAN CJ: Yes.

MR GRIFFITH: I hope there will not be gaps by the finish, your Honour, but we entirely agree that that is so. But, your Honour, just to make an example on my point about what if a State does not produce the good - I think your Honour referred to South Australia imposing a tax on tobacco products. If it has no local tobacco industry, and does not produce substitute products, well then, whatever the tax is doing, section 92 will not affect it.

We say, your Honours, on such an approach an impost by South Australia on tobacco products coming into the State, as they must - that is the only way to get there - for sale - let us assume they are produced elsewhere in the Commonwealth or overseas and brought in from other States and Territories, we say in all cases, your Honour, the impost on sale is, in effect, an impost on bringing the good into the State and, your Honour, we say in all such cases the impost would be a duty of excise proscribed by section 90.

Turning to your Honour the Chief Justice's inquiry, although I appreciate your Honour Justice Dawson told me I could not say it, it remains our submission that a duty of excise is an impost upon goods in Australia whether imported or not and whether imposed at the stage of production, manufacture, distribution or sale. Your Honour, we say in the normal case, whether an impost is a duty of excise or not will readily be determined by the criterion of liability, by the terms of the legislation itself, if it is levied in terms upon sale. We say that is why, since Federation, the States have not imposed direct sales taxes on goods, either individually - each jar of marmite or vegemite - or comprehensively by an impost on all sales of goods or retail sales of a particular good - food or whatever, cars, manufactured products, none of them. The States have been as clear, in our submission, as the Commonwealth as to where the line lies in those cases.

The grey areas - and we submitted on Thursday there have not been all that many of them before the Court - have been cases where the States have either set out to test the limits of section 90 or possibly, in a case such as Gosford Meats, have not been quite forensic enough in its apprehension of what might be the position so far as an excise is concerned. It might have been, for example, that in Cole v Whitfield an argument could have been made based on the excise power. It was not, but these things are possible. So, on any construction, it must be admitted there will always be grey areas, although we have made the point that for the purpose of excise it has not been all that difficult since Federation.

DAWSON J: But, you see, that is the point. It is not just a matter of grey areas. It probably is obvious that a sales tax on your test is a tax on goods because there is a necessary relationship between the payer of the tax and the goods, but that does not answer any questions as you get further and further down the line because there are other relationships with goods which could be employed to show that the particular tax was an excise duty on your approach. No one test is conclusive. You have not done it, but the Court has abandoned volume or quantity, it has abandoned the fact that it is on a step between production and distribution and it has left the thing up in the air.

Now, that in itself does not matter so much except that it suggests that what you conceive to be an excise cannot be correct because the Constitution never conceived of an ever-widening and widening notion of excise duty. Therefore, one has to look for something else because one thing the Constitution did presuppose was that it was contained. The answer is then to be found in what the notion of an excise was at the time the Constitution was enacted. That is the point.

MR GRIFFITH: Can I say two things about that. One, your Honour, in as much as your Honour postulates it must be possible to say whether an impost is an excise or not, we would entirely agree with that, your Honour, and we would, in contrast, refer to the ambulatory propositions made by Mr Spigelman, Mr Selway and others of the States, indicating that it may be necessary to have a case-by-case example on whether or not there are imports of the same nature, imports of a substitute good, whether there is inelasticities of demand. Our submission is, your Honour, those postulations from the States as to what is an excise, even by reference to the paragraph 2 of New South Wales written submissions' definitions, your Honour, is something which is flatly contradicted by your Honour's point to me, that I understood to be that - - -

DAWSON J: It is not that the test that they posed may be difficult to apply in some marginal circumstances, but it is perfectly test. The one you - you do not pose a test at all. All that you say is, "You will know an excise when you see it."

MR GRIFFITH: Your Honour, could I say that we do pose a test - - -

DAWSON J: I am not blaming you, the Court says that, it is the majority do.

MR GRIFFITH: Your Honour, could I say, firstly - and this is your Honour's first point to me - that we say the inquiry here is a lot easier than, for example, under section 92 to identify whether something is discriminatory and whether it is protectionist. I mean, Castlemaine Brewery show the sort of difficulties that may happen in that sort of inquiry. The point can be made, that is an area of uncertainty but in argument it has been put that there has not been much difficulty in practice. We have not had many section 92 cases since Cole v Whitfield. Your Honours, what we say is that in the ordinary case this criterion of liability provides the answer, but as Chief Justice Barwick said in Anderson's v Victoria 111 CLR 365, there may be other considerations which are taken into account.

DAWSON J: Limitless

MR GRIFFITH: Your Honour, relevant considerations; they are not limitless.

DAWSON J: He does not say what is a relevant consideration, he just says there are any number.

MR GRIFFITH: Your Honour, what we say is that one can derive from the majority in Duplicators [No 2] at page 583 that we can accept that the criterion of liability test applied in Bolton v Madsen and Dennis Hotels is rejected as a sole test. So that, your Honour, one does not say that gives the answer which I think your Honour is looking for, "Apply the test, this is the answer." Your Honour, it in effect did not reject the criterion of liability, in our submission, it rejected it as the exclusive determinant of whether a levy is an excise. At page 583 their Honours said:

Instead, in determining whether an exaction is or not an excise, the Court has regard to matters of substance rather than form. That approach, which looks to the practical and substantial operation of the statute as well as to its legal operation, requires that a variety of factors be taken into account. The rejection of the criterion of liability as an exclusive test has not disturbed general acceptance of the proposition that a tax in respect of goods at any step in the production or distribution to the point of consumption is an excise.

So, your Honour, we say that - - -

DAWSON J: But you can only have regard to substance over form if you know what you are looking for. It does not answer the question to say you are looking for a tax on goods.

MR GRIFFITH: Your Honour, it does indicate that that is the primary inquiry but you might, as the Court indicates, we submit, your Honour, not get the correct result in some cases and you may have to - as I think your Honour Justice McHugh pointed out on Thursday - look, for example, at the relationship between the amount of the levy and the quantity or value of the goods. Your Honours, we would accept, with respect, what your Honour the Chief Justice put to me at page 256 of the transcript. So that what you say is you are not limited to the statutory text, you look at the reality of the matter.

So, your Honour, we say ultimately all the substantive test is seeking to determine is beyond the strict terms of the legislation, with the assistance of criteria of the sort set out by Chief Justice Barwick, whether the person upon whom the tax is imposed is liable to pay the tax by reason of or by reference to the fact that the person has taken a step in relation to the goods at some point between production and sale. Your Honour, pausing there, I appreciate that that is not sufficient for your Honour Justice Dawson, but we submit - - -

DAWSON J: It is not sufficient for anyone because it does not tell you in the end. It is just a factor to be taken into account.

MR GRIFFITH: Your Honour, we submit it has told the States well enough for 97 years for the purpose of enacting their impost and, your Honour, it has, by and large, told those who have to pay them. There have not been difficulties, your Honour, and even an area where a State obviously went full into it, the Hematite case, your Honour, in the end we got a result from the Court's decision that none of the States or Territories were even minded to challenge on their new - - -

DAWSON J: What the States have been told over the years is that there has been an ever widening conception of an excise duty, the limits of which cannot be seen and it would be very dangerous to attempt to base legislation upon some particular notion of what an excise duty was or was not.

MR GRIFFITH: Your Honour, we submit the States have got correct advice, we would suppose, namely, that an impost on goods whether locally manufactured or whether they come in the State from overseas or other States, will be an impost on goods if the impost satisfies the criterion of liability test or if one goes beyond the particular terms of the statute, your Honour, what is embraced by reference to the substantive test. They know with clarity where they are, your Honour. That is why - - -

DAWSON J: They certainly do not know with clarity.

BRENNAN CJ: Would it not be a better formula to adopt the words that are used at the end of 583 and to say that the test is whether it is a tax in respect of goods at any step in the production or distribution to the point of consumption and that is to be ascertained, either as a matter of form or as a matter of substance?

MR GRIFFITH: Your Honour, I am sorry, I thought that is what I was saying but I - - -

BRENNAN CJ: I thought you were putting the emphasis on the substance and form notion as though that was all we were looking for.

MR GRIFFITH: No, your Honour, I did not intend it.

BRENNAN CJ: What we are looking for is whether or not there is a tax upon a step. If the tax is upon a step then, as a matter of either substance or form, that can be ascertained. Is that the proposition?

MR GRIFFITH: Yes, your Honour, I thought I had made that. I am sorry I was been unintentionally elliptical if your Honours did not perceive it as such. That was the point of my reference, your Honours, to that page but I should have made sure I just read the words rather than putting in exegesis.

BRENNAN CJ: Is that not the notion that you have in relation to tax on goods. If the tax is imposed by reference to a criterion, which is either an act done with respect to or possession of goods, then that is a tax on goods. Is that a legal or an economic conception?

MR GRIFFITH: Your Honour, we say it is a legal - - -

DAWSON J: That was that very thing that was rejected, the legal formula. Why is not a tax upon the act of producing goods, that is, a payroll tax, on that test an excise?

MR GRIFFITH: Your Honour, we say it is not a step on the act of producing goods.

DAWSON J: It is. It is taxing the very label which produces the goods.

MR GRIFFITH: Your Honour, we say it is not a tax with respect to the good.

DAWSON J: Your answer to me is always an assertion. If you could say in economic terms there was some reason, I would understand that, but the economic which are employed and have been employed in the cases suggest that it is an excise because it finds its way into the price of goods and affects the production.

MR GRIFFITH: With respect, your Honour, I prefer legal terms. Ever since I practiced in the trade practices area, I have some suspicion about economists.

DAWSON J: That is the trouble. That was the trouble with section 92, but the Court attempted, in Dixonian terms, with greatest of respect, to find a legal answer, an answer in terms of the legal formula, to what was a problem with economic aspects, and that is what has been the trouble with section 90.

MR GRIFFITH: Your Honour, with respect, we would say that if there has been a problem en passant, as it were, once we get to the Capital Duplications [No. 2] point, it is with utmost clarity we know where we are. It is not Dixonian, with respect, your Honours. In our submission, it just directly vindicates a requirement that there not be impost on the borders.

DAWSON J: That has got nothing to do with it.

MR GRIFFITH: I beg your pardon, your Honour?

DAWSON J: It is not imposts on the border. A tax on goods imposed across the board is not at the border. Section 92 is concerned with that. No one ever thought that section 90 could improve upon the words "absolutely free". That was intended to do all the work in that respect.

MR GRIFFITH: Your Honour understands I make the proposition saying it is, in effect, as if it were imposed on the border because it cannot operate on the good until it comes into the State.

DAWSON J: I understand thae submission.

MR GRIFFITH: That is how we put it, your Honour. Your Honours, perhaps I could illustrate the point we make by saying Western Australia v Chamberlain [1970] HCA 5; 121 CLR 1 was an example of the area where one says, well, looking at this approach, for example, Chief Justice Barwick at 16 or Justice Menzies at 25, the requirement that the receipt be issued for all moneys received for the payment on sale of the goods did constitute an excise. Your Honours, we would contrast the example Justice Gaudron made to me on Friday of having a credit charge on the use of a credit card, a State impost, because there, your Honours, it is merely a tax upon whatever use someone might make of their credit card dealing with the gross sum, however it is made up, of the transactions which they make over the month. There may be no goods there whatsoever, usual use as to services such as hotels, restaurants and that sort of thing, plane fares.

So that, your Honours, in a different situation, then one might have a Chamberlain result, and we submit that that is the inquiry, not a difficult one, and we have made the point firmly that we say, your Honours, that if there is a State GST on all goods and services, in so far as on goods, in our submission, your Honour, then it would be across what we postulate as the line, I had better not say "bright". Your Honour, I was intending, and I hope it does not cause difficulties, your Honour, to refer to - - -

McHUGH J: Sorry, Mr Solicitor, but I take it you reject the proposition that excises are selective taxes on goods imposed at any stage from production to distribution?

MR GRIFFITH: Yes, your Honour. Your Honour, it is a question of perhaps bottom up from the person who is paying it, your Honour, in the end and what we say is that perhaps if we could use the customs example, that if one has a general impost of all goods coming into the State bear a certain levy, in our submission, all such imposts are a customs duty.

McHUGH J: That may be, but that is because they are payable as at the border.

MR GRIFFITH: Yes. Your Honour, we say applying the criterion of liability as modified substantive tests, if they are an impost on goods, applying that test, then they are an excise, whether they are identified or whether it is indiscriminate as to what they are if it is applied to goods. I think we have made our point high on the hill clear on that, your Honour. Your Honours, appreciating it is dangerous territory to refer to authority of a Judge of this Court for a proposition one wishes to make, can I refer just in passing to what your Honour Justice Dawson said in South Australia v The Commonwealth [1992] HCA 7; 174 CLR 235 and, in particular, at pages 258 and 259. There we were dealing with the issue of what was a tax on property and your Honour made the point, which I entirely agree with, at page 258 that:

"tax on property" cannot be interpreted literally. A tax on property is a tax upon a taxpayer in relation to property. It is the relationship between the tax and property which will, if it is sufficiently direct and substantial, characterize the tax as a tax on property.

So, your Honours, we make the obvious adaptation to that and say that, in our submission, that does give an answer, if not for all your Honours a satisfactory one, on the, "Well, what about a payroll tax example?"

DAWSON J: I will be quiet after this, Mr Solicitor, but obviously an excise duty embraces taxes on goods in that sense, the sense in which you have been talking. My point is only this, that you cannot upon the approach which you take say what the outer limits are and that being so it is suggested that a much tighter definition than you are prepared to give an excise is needed. You look around and you find the obvious definition, the meaning of excise in its history, in the text of the Constitution and that is sufficient. You look for something which will provide the limits because obviously it was used with definite limits. It is not to be supposed that in section 90 the term "excise" was used as an imprecise term and the only way you can define precision is in the way in which I have suggested by the States, I would say, but that is the point. There is no doubt that an excise is a tax on goods, but that does not tell you where the outer limits are.

MR GRIFFITH: Your Honour, I was going to say something about this, having regard to what was the limit in 1900, and I was going to make the obvious reference to Lansell v Lansell where various of their Honours - your Honour made the view that one is not stuck with the denotation of 1900, et cetera, in the logical result of building an argument on merely the historical position without having regard to the American or the United Kingdom definitions, the practice in Australia. I will enlarge on that, your Honour, but - - -

DAWSON J: It is only that when one gets to that position, one has to find an answer and one finds it in the text, in economics and in history.

MR GRIFFITH: Your Honour, with respect, just as in South Australia v The Commonwealth it was necessary for the Court, including your Honour, to do that with respect to a tax on property, in our submission, the same answer may be given. It remains our point to the Court in this regard that the tests which we postulate, which we say is to say no more than what the Court has already held in its decisions, is one that does mark the limits and that, when one has a particular case, we say it is easy enough to find, such as Hematite. In the end it is conceded that was easy enough. It involves $6 million or $7 million per annum but it was not a difficult case.

Your Honours, if I could make that same point that I was seeking to make with respect to what your Honour said in South Australia v The Commonwealth, at page 259 your Honour said something which we would apply here at about point 8:

The phrase "tax on goods" is elliptical, as is the phrase "tax on property", but the distinction between a tax on property as such and a tax upon a transaction involving property is a real one.

We say in answer to the point that your Honour Justice Dawson just put to me that - not proposed by us, your Honour, but our submission, we say, reflects the authority of this Court - it does give the result. Merely because one can then produce an example does not mean that the proposal that we say reflects the authority of this Court does not adequately identify and define excise. In our submission, it does and it does work and it has worked.

DAWSON J: It does not underpin the franchise cases very satisfactorily.

MR GRIFFITH: Your Honour, I was going to return to the franchise cases. May I do that, because I thought firstly I made my position clear as to where we stood on that. But I was seeking to make, and I will make, a point from the franchise cases, namely, that what we submit is that the - perhaps I had better come to it in order, but we submit that the franchise cases are answered by whether or not this Court maintains its position as to whether a tax on a licence to trade is an impost on goods or not. We know how the Court got to that position. So the answer of the franchise cases depends on whether the Court maintains its position or not. In our submission, your Honour, that is not baggage for us to carry before the Court. It is part of the difficulty of the States, as it were, put by Mr Selway, on the horns of a dilemma.

BRENNAN CJ: But if you put it in those terms, a tax on a licence to carry on a business simpliciter, then it falls outside your definition of "excise".

MR GRIFFITH: Yes, your Honour, but one can then say let us look at - I do not want to make the argument because I am not making - - -

BRENNAN CJ: No, it would then go into other aspects. But all I am saying is, if you put it that way, it is self-answering that question.

MR GRIFFITH: Yes. Well, that is the point we want to make, your Honour. But I was wanting to later - and I will pick up the exchange I had with Justice Gaudron on Thursday as to what one can build from this position - but I wanted to do that by analogy, if I could do that as I come to it in order.

Now, your Honours, having made it quite clear that we say that the principal answer is the free trade route, and we identify the capacity of goods to cross the State border without bearing an impost either then imposed, or upon sale, your Honour, looking at the submission we made in part 2(c) at page 10 and following, and taking issue with the way in which the case is put against us, we say, your Honour, that even if the view is that the purpose of section 90 is only to secure the Commonwealth's tariff policy, we say that leads to the same result.

Your Honour, it seems accepted that the Commonwealth's power to levy duties of excise, so limited to effectuating the Commonwealth's tax policy, is to ensure that there is an intended relativity between taxes on local goods and taxes upon imported goods, that that is maintained. The earliest example, at 1900, is on this chart which we have given to the Court. Your Honours, of course, the Commonwealth had to have that power from the point of view of ensuring the result of the free trade protectionist debate. We say there is no point in the Commonwealth having this power if it does not have an exclusive grant of duties of excise.

Now, your Honour, Mr Spigelman criticised Justice Dixon's reasons in Parton for holding that section 90:

was intended to give the Parliament a real control of the taxation of commodities and to ensure the execution of whatever policy it adopted should not be hampered or defeated by State action.

This is at page 260. Now, Justice Dixon's reasoning on this aspect we say is only one of the paths by which you reach the settled construction. But we take issue with Mr Spigelman when he says that Justice Dixon's reasoning is circular. We say it is not the case that the conclusion assumes what has to be proven. What Mr Spigelman overlooks, in our submission, is the Commonwealth's power to impose a uniform external tariff is given to the Commonwealth precisely so that it may, to the extent permitted by section 90, control the taxation of commodities and, in that way, have control over the internal economy, whether to protect it, whether to encourage local industries, or whether to make local industries, as is now the fashion, more efficient and competitive by abstaining from imposing protective customs duties.

On any view we say, your Honours, the purpose of section 90 is to give the Commonwealth the control of the taxation of commodities even if that control was exercised by entirely lifting external tariffs so that local industry is exposed to offshore competition without protection. So the question then is what is the degree of capacity control, whether the Commonwealth exercises the power or not, because we say it is an exercise of the power even if the Commonwealth choose, for example, not to impose any duties or customs.

Justice Dixon says effectively in answer to that question that it must be assumed that control over taxation of commodities was intended to be effective. One should not read section 90 as if that capacity should be readily circumvented. If section 90 is read as simply a provision enabling a Commonwealth to impose external tariff in a uniform way and to control the taxation of commodities only in order to maintain the relativity between imported and local goods, even that humble purpose can only be achieved if the Commonwealth's exclusive power to levy duties of excise extends to imposts upon the sale or distribution of goods. We say, your Honours, that is the point of our examples in paragraph 2.17 with which my learned friend, Mr Spigelman, had some difficulty.

We say it is inherently difficult to accept that it was intended that the Commonwealth be given an exclusive power and it is one of the select and very few, and very significant exclusive powers, if that power can be so readily circumvented as to allow the States to undermine Commonwealth policy simply by imposing a tax further down the line.

Your Honours, the proposition that duties of excise are limited to taxes falling selectively upon goods produced or manufactured locally, whatever that means, rests largely on the proposition that section 90 was simply intended to safeguard the Commonwealth's tariff policy. Your Honours ought to safeguard the Commonwealth's overseas trade policy generally. We say this approach which we see reflected in the judgments of your Honour Justice Toohey and Justice Gaudron, particularly in Capital Duplicators is, we would submit, premised upon the proposition that because the State tax is imposed equally upon locally - we will leave aside for the moment what locally means - and imported goods of any class, increases a relative prices of the goods to the same extent, such taxes cannot impair tariff or trade policy.

Your Honours, we sought by our examples in paragraph 2.17 and also in examples I gave with respect to sugar and cars on Thursday, to show that that is not so. These examples in paragraph 2.17 are directed only to this point and not to the free trade point although, as we understood his comments, Mr Spigelman seemed to direct some of his criticisms as if they were directed to the internal free trade argument.

Your Honours, what we now say is that the economic effect may constitute an excise. We say, your Honours, that even taking this narrow view that section 90 was intended to safeguard the Commonwealth's tariff policy, our examples show that it is essential for the Commonwealth to maintain the exclusive power to impose impost on goods including the case where the impost is sought to be imposed by the State indiscriminately of whether they are imported into the State or not.

If I could go back to the six-cylinder car example again, your Honours? I think it was suggested by Justice Gaudron to me that such a tax may have the effect of being struck down by section 92. If we postulate, your Honour, that New South Wales did not have its own car industry at all, in our submission, your Honour, section 92 would have no effect. Further, your Honour, one could postulate that an environmentally minded State might take the view, as is the case, for example, throughout Europe and also it is increasingly the case in the State of California and other States of the United States, that a State legislature might take the view that it is environmentally correct to encourage small capacity motors from the point of view of protection of the environment.

Your Honour, that may well be the case, but if then, your Honour, a State, for the best of reasons, seeks to impose an impost which has the effect of raising a high liability on a six cylinder car being the only cars produced basically by the Australian car industry, in our submission, your Honour, such an impost, as we said on Thursday, could have the effect of wiping out the car industry in the Australian manufacturing industry which may be, as is known, completely situated in Victoria and South Australia.

In our submission, the State of New South Wales has no power to do so, even for the best of reasons, environmental reasons, for other policy reasons, to encourage small cars on the road because it has no power because, we submit, your Honours, taking this tariff view of the reason for the prohibition of section 90 with respect to excise, such purported impost must, on any view, constitute an excise, a duty of excise. Your Honours, we say it is beyond the capacity of a State to impose impost which have the effect of that example which I postulate.

Your Honours, we dealt with previously when Mr Spigelman was dealing with the examples if you had a different sort of levy instead of a levy which was limited to, say, six-cylinder cars, our submissions also postulated New South Wales, for example, had a non ad valorem State tax on all cars imported in Australia and made of, say, a flat tax of $2,000 per car. The effect of such a tax would be to increase the cost of Australian made cars.

The effect might be that residents in New South Wales might keep their cars for a longer period than otherwise, and it might be the case, your Honour, that imported cars which could have been, for example, 20 per cent more expensive might have a different relativity; they might only be 10 per cent more expensive after bearing the like impost and that might cause consumers to choose the imported car over the Australian, but in either way, your Honour, we would say that the impost must be regarded as destructive of even that narrow purpose of, we say, the prohibitions of section 90.

Your Honours, looking at our example, paragraph (d) on page 11, we say that a good which could be regarded as coming within that description is the case of a computer chip. It might be that the Commonwealth Government wished to encourage the manufacture of computers in Australia by having no import duty imposed on computer chips which are not manufactured in Australia to encourage competitive industry in Australia with the capacity to export. If one State was able to impose an impost on the sale of computer chips within the State, that might have the effect of eliminating the Australian industry to be competitive in its exports, it may have the effect of eliminating the Australian industry. In our submission, your Honour, it comes within the ambit of our example (d).

Now my learned friend, Mr Spigelman, seeks to deal with these examples which, in the end, we understand he must concede as having force with respect to the aspect of interference with the aspects of implementation of Commonwealth tariff policy to say, "Oh, well, the Commonwealth can deal with it in other ways." Now I will say in a moment why this is not an argument at all. If it is proscribed by the provisions of Chapter IV and section 90, that is it. You do not have to look for other ways in which the Commonwealth might exercise its power, but his basic proposition that the Commonwealth might have power, for example, under the taxation power or under section 109, in our submission, is just incorrect, although we admit it might be seen as drawing some support from what Justice Mason said in Hematite Petroleum v Victoria [1983] HCA 23; 151 CLR 599 at page 631. Now, your Honours, there Justice Mason suggested a bit over halfway down the page 631:

If the States had power to impose excise duties then the Commonwealth Parliament's power to protect and stimulate home production and influence domestic price levels might be compromised. It is possible that by an exercise of the taxation power the Commonwealth could effectively prevent the States from imposing excise duties. A law enacted under s. 51(ii) providing that no excise duties should be payable on designated goods would, by virtue of s. 109, prevail over any inconsistent State law.

Well, your Honours, with respect, we would submit that there is perhaps two errors in what his Honour there said. Firstly, we would not seek to submit that the exercise of the taxation power under section 52(i) enables the Commonwealth to do anything more than tax. We say it must be - perhaps we do not have to go beyond the Uniform Tax Cases, but whatever we do not have to go beyond, it must be that the Commonwealth could not legislate under the taxation power to say that whatever it is we are taxing bears the tax and there will be no other tax on it. It may be that one can provide for priority, but the other aspect is that we would submit that, if nothing else, Metwally 158 CLR 447 establishes that one cannot use section 109 as a sword of this sort to go around enacting, in a Commonwealth law, this or that State law is invalid.

What happens is that it becomes a matter for the operation of section 109 by reference to the terms of what otherwise is a valid Commonwealth law to construe its operation to say whether, to the extent that the operation of a State law is inconsistent, it is pro tanto of no operative effect, not even invalid. With respect, it is not the case that one can say, "Oh well, there's ample plenary power there". The Commonwealth, if there's a State impost, say of the cars example, the six-cylinder car example, 10,000 on each six-cylinder car, the Commonwealth merely passes a law saying, "In respect of trade and commerce we pass a law saying that our impost on the sale of cars is the only impost and that operates".

So, as a matter of constitutional operation, that solution is not possible but it is not possible for many other reasons. The Commonwealth cannot pass a taxation law directed merely to one State. That would be discriminatory and prohibited by section 52(ii) and (iii) and section 99 and of course, your Honour, in practice it would be impossible to enact a Commonwealth law just directed to a State tax. I have already made the point it is constitutionally impossible anyway. It cannot be suggested that the Commonwealth could restore its tariff policy by merely creating the customs duty. In the computer chip example, it is the absence of the customs duty which one postulates as being that which establishes the tariff policy. I have already made the point that in any event one may assume that by and large the Commonwealth has no power to impose protective tariffs any more, consistent with its international obligations as well as consistent with what might be regarded as modern economic theory.

Were there an increase in customs tariff which I postulated would be impossible, the Commonwealth would necessarily have to impose that tariff uniformly throughout Australia. The effect of that of course would be that one would distort the relativity any further in the other States which had not imposed the sales tax. So, in our submission, it is completely untenable to suggest there are other ways of doing this. Once my learned friend is at the point, as we say he must be, must concede on the narrowest view this was what is squarely embraced by the operation of the prohibitions, then the issue must be only the principal one of whether or not it falls within the area of prohibition. Your Honours, we make the point in our submissions and your Honours will see further paragraphs 2.19 and 2.20 on page 12 of our submissions, that to adopt the sort of approach which is suggested by my learned friends is to adopt the approach of a triumph of form over substance.

It seems conceded, your Honours, that if New South Wales levied a tax for, say, $10 upon the sale of all shoes produced in New South Wales, levied a tax for the same amount on all shoes produced in Australian and brought into New South Wales of the same amount and a tax on all imported shoes brought into New South Wales on the point of sale, whether they were brought directly into New South Wales from overseas or through the other States and Territories, your Honour, such separate laws must be regarded, in our submission, as invalid.

Your Honours, we say that it cannot be suggested that the prohibitions of section 90 which are thereby admitted are to be avoided merely by collapsing those separate laws into one generic law in imposing an impost of $10 upon the sale of all shoes, whether manufactured in the State, manufactured in Australia or imported or not, which are brought into the State and sold. Your Honours, we made it clear we go further and say that one cannot by adopting form prevail over substance by instead of taxing shoes or marmite or whatever, taxing all groceries or all clothing or, if you like, even all sales of goods. We say in that situation the result is exactly the same.

Your Honours, we say it must be incompatible with the constitutional mandate to seek to elevate form over substance. In effect, your Honours, the point we make in paragraphs 2.19 and 2.20, in our submission, really destroy, when one looks at the substance of what it is the States are supposing that they are able to do, any basis which they may have to avoid that which they admit, at least to a limited extent, on the tariff exception, is embraced by the structure of Chapter IV, particularly section 90.

Your Honours, we will not keep referring to it, but the States themselves do not merely stop on form, they accept that they must accept an impost on first sale, and it seems, your Honours, one must assume that they also accept the possibility that second and subsequent sales up to the point of sale to the consumer also may constitute, where one has an impost with respect of goods, an impost on production or manufacture within Australia in certain circumstances. Then, of course, your Honour, it is necessary for them to contemplate a situation of what I would refer to as "ambulatory proscription".

Examples of that, your Honour, are the difficulties my learned friend, Mr Bale, had with the question of tinned kangaroo, as to whether or not one can say if the fact is that all kangaroos which are slaughtered and killed and put into tins and sold are produced and manufactured in Australia, my learned friend would have to concede an impost on the sale of that tin of kangaroo meat would be an excise; but if one breeds two or three kangaroos in New Guinea, as your Honour the Chief Justice postulated, and bring back two or three pounds in a tin, my learned friend would say that is different because it is indiscriminate, it is not a commodity as such.

Your Honours, indeed, the example here of the impost here - if I am running the risk of saying, well, this is a franchise case and it is different - but were we to assume the impost here was that it is on all tobacco products which are sold, rather than on the licence fee referable to an earlier period, the States would put it that if the impost is made on all tobacco products sold, they would say, well, that cannot be an excise on their postulation. That is their principal submission here.

Your Honours, we know from the case stated that 10 per cent or so of tobacco products are imported. Now, it might be put, if that is the inquiry, one might say, well, in substance is it an impost on local production or manufacture, or is it enough that you say this 10 per cent of imported product, if you like - that there is a kilo of kangaroo meat imported. Now, in our submission, one reaches the same result in any case. It is the impost on the good which is prohibited, not having a case by case inquiry as to whether or not, if one has an indiscriminate impost on goods sold in Australia, as a matter of fact that good is a good only produced and manufactured in Australia. If there was an impost on, say, koala skins, one might say, well, pretty obviously that would have to be, on the States' view, a duty of excise because one would expect koala skins to only be produced in Australia.

But, your Honour, we say it is an irrelevant inquiry, and the difficulties my learned friend, Mr Selway, got in with his marmite - ignoring for a moment that marmite is a meat extract and vegemite is a vegetable extract, your Honour - would leave the shop keeper not knowing what his liability was, and not knowing whether or not he was lawfully obliged to pay the tax without having the advantage of Professor Officer and other economists to advise him, and also the Bureau of Statistics, as to what are the imports and exports into Australia.

Your Honour, whatever is the result, the definition of "excise" must operate so that those who are liable for the impost must know what their legal position is. Your Honour, that is something which is made clear by the extract from the Capital Duplicators [No 1] judgment, which I read on Thursday. Of course, your Honours, it is made abundantly clear by section 55 itself in that it is necessary to know what is an excise or not for the point of view of when the Commonwealth comes to pass a law which may be imposing a duty of excise, as distinct from a duty of customs.

One must know at the time of enactment. It must be, your Honours, that this ambulatory test, which seems to be embraced by all my learned friends who refer to it - we have paragraph 3.3 of the Queensland written submissions, the brown coal example, which seemed to embrace an ambulatory possibility depending upon what is the status of black coal and brown coal imports in Australia. We had Mr Spigelman's examples, we had Mr Bale's examples and we submit, your Honour, that is the antithesis of what must be required for the purpose of articulating the reach of the constitutional mandate.

So, your Honours, drawing the two threads together - the free trade, and then the issue of the narrower one of tariff protection, the one that the States seem to concentrate on - we say, your Honour, on either result one gets the position that an impost of the sort postulated - and I think it can be identified now, your Honour, fair square, that what the States are saying, that if they impose an impost on goods as commodities, and not differentiating between whether or not they are produced in a State, within Australia or imported, that is not an excise.

We say, your Honours, that is something which is struck down by either approach, and we say both are fully available as to what is the operation of section 90. Your Honours, if section 90 is to play an essential part in achieving these objects, we submit, your Honours, it is necessary for it to apply in the circumstance which we postulate. Your Honour Justice Dawson in Capital Duplicators [No 2] - and I am sorry, your Honour, to refer to what your Honour says yet again, but it does seem relevant for our purposes to deal with the issues which your Honour has raised with us - at page 609, you note near the top of the page:

Nor was it a matter of accident that the term "duties of excise" was chosen as an expression bearing a confined meaning. The particular problem confronting those responsible for the drafting of the relevant provisions arose from the desire to create a common external tariff which would bind the States together in a customs union while at the same time creating a free trade area amongst the States by the elimination of internal customs duties and other restrictions.

Then further down in the paragraph, your Honour says:

Thus, what I have called elsewhere the twin objectives of a common tariff and interstate freedom of trade were to be served by ss. 90 and 92 operating in conjunction.

Your Honours, of course, our principal submission, at first, is to concentrate on the second aspect as being the stronger, but we have made the point that the narrower aspect, in our submission, makes the same point.

Your Honours, we notice that your Honour did go on in that judgment to make the point that:

The protectionist effect of a common external tariff, which was the necessary feature of a customs union, could be undermined by the imposition, State by State, of differing duties of excise upon locally produced goods. The imposition of excise duties would diminish or extinguish the protection on which customs duties were intended to confer upon locally produced goods.

Then at page 611, your Honour Justice Dawson said:

The relevant constitutional provisions are clearly designed to achieve a customs union coupled with an internal free trade area and those objectives reflect the desire of those framing the Constitution to overcome two besetting problems of the time, namely, lack of uniformity in external tariffs and internal barriers to trade and commerce.

And, your Honours, perhaps where we make the exegesis from your Honour's remarks is to say it is our submission that there must be a lack of internal free trade if States are able to differentiate differentially taxed goods, whether or not that impost expressed by reference to goods manufactured or produced was in a State within Australia or apply comprehensively to all goods which are imported into the State and sold.

So I think, your Honour, where we do part company to say in that case also, in our submission, one does raise an internal barrier to free trade which we identify the purpose of section 90 to avoid. Your Honour, we would say that when one says there is to be an internal free trade area, we say that it is inconsistent to accept the possibility that it will not have differential imposts of goods in the course of distribution to a point of private sale in one State which does not apply equally and without discrimination in all States. For that reason, your Honours, we say that must be regarded as being reserved to the exclusive province of the Commonwealth which, of course, can only exercise the power with respect to impost on goods without discrimination. We say there was not a requirement for no discrimination in the States to reflect this, to mirror a requirement because the position with the States was quite clear, they had no such power at all so it was not necessary to say any such power must be exercised with discrimination.

Your Honours, what we do, in referring to this, we say that the second of the two aims is something which deserves its proper emphasis and for the line of argument we have made, your Honour, we say is recognised in that way. It is our submission that, in effect, one would abrogate also section 92 if one adopted this approach. State taxes would completely contradict the constitutional requirement. There would be no differences between States and the subject matter of taxation of goods. The point about the six-cylinder cars is perhaps quite a good example. Those States manufacturing six-cylinder cars, whether the prohibition was based on an environmental reason or any other, would get nowhere with section 92 because there was no competing State product. One could not say that it was possibly protectionist. One does not have to go to that anomaly because one says you have already answered it in the principal provision dealing with impost on goods as Professor Zines puts it by implication, by going to section 90 first. You do not have to go to section 92 when you are dealing with imposts on goods.

Your Honours, may I return now to the issue of specific textual support and particularly deal with the submissions which have been made building on the occasional constitutional references to production or manufacture or just production. What we say, your Honours, is that where the Constitution has need to make reference to production or manufacture or export in the Constitution, it makes it specifically. So, for example, in section 90 there is an express reference to "bounties on the production or export of goods". "Section 51(iii), "Bounties on the production or export of goods" Section 91, "aid to or bounty on.....production or export of goods", and section 93, "excise paid on goods produced or manufactured in a State."

Where the Constitution, your Honours, is meant to limit a tax or benefit to a particular stage of trade, we say it says so in plain terms, for example, section 93. Where it did not seek to say limit a tax, it made that clear, we submit, not by plain terms but by plain omission, for example, in section 90. Section 90 does not have this qualification with respect to excise, therefore it is not there. The Constitution could not be clearer on this point.

Your Honours, we deal specifically with the rather long - we were then dealing with the written propositions put by New South Wales in its further submissions on section 93 in paragraphs 2.26 to 2.34 of our Commonwealth submissions. I will just merely refer and adopt them, but we would wish to make one further point about section 93. If my learned friend is not out of Court, as it were, on what we put in our written submissions, we submit that this must put him so. That is, we say there is a further and obvious reason why section 93 would make the reference to "goods produced or manufactured in a State" and goods sold for consumption in other States - in other words, the process of sale till it gets to the point of final sale to the consumer.

That is because the purpose of section 93, dealing with the allocation of the expected surplus which was going to arise in the five years of Federation - I will refer to that later - this is just an accountancy provision. It says that if you have the case of a good produced and manufactured in one State and sold down the chain for final sale - that is the crucial one, not the first wholesale sale because obviously in most cases the sale from the producer will be in the State of manufacture and it might be there are several wholesale sales in one State or the other State or both to the point of final sale. But section 93 picks the final sale for consumption as the point where the credit will be taken by a State for the purpose of the division of the surplus during the first five years.

Your Honours, this is, we submit, quite significant. Firstly, it makes with the utmost clarity an explanation as to why there should be a reference to "goods produced or manufactured in a State" because in the same paragraph the contradiction is made with those same goods when they are

sold for consumption in another. That is to identify the subject matter and to identify what is the difference. If you have manufacture in one State, if you have final sale in another, who gets the credit? This is the extra point we seek to make, and that is the constitutional choice is to not give the credit of the State imposing the impost on production or manufacture, and that is where you would expect it on the State argument saying excise 1900, everyone knew it was only on production or manufacture of these few goods that are listed in our table. That is where you would see, if the States and Territories are right in their submissions, the credit being taken, but where is the credit taken under the Constitution? These draftsmen of our Constitution must have been more modern economists than we thought because they do the obvious thing and take the credit to the State where the consumer buys it, the point of last sale.

Your Honours, so that not only is section 93 not anything against us, the first point I make orally is that in fact it is, at the very worst for the States, for us, because it confirms the point we make when the Constitution means production or manufacture it says so, but we do get the additional and, I do not whether it is superlative support or better than section 95, but we say it is heavy support to show that those who framed the Constitution were perfectly aware that the aspects of imposts on goods was something as a duty of excise which arose when one has regard to the final sale to the consumer.

Now, we submit, your Honours, it is not just the coincidence that section 93 reflects the very same result that the authorities of this Court have given to the meaning of duties of excise in section 90. It is fully reflective of that to take the view, yes, we are talking about duties of excise for constitutional purposes when we are talking about the liability which goes through to the point of last sale.

So, your Honours, what section 93 says, that if the Commonwealth passes an impost - and I mentioned to your Honours that the only current examples of impost on manufacture and production in Australia are by and large those of the traditional ones: spirits, beer, tobacco and I also add energy, particularly coal and petroleum - if the Commonwealth imposed such an impost - let us assume that it was within the first five years of Federation, those imposts and, indeed, they were imposed by the Commonwealth up to the point of energy, your Honours, the effect of section 93 is to say, for the point of view of the Commonwealth applying the service revenue, those imposts which might be expressed by criteria of liability to be on production and manufacture are to be regarded as going to a credit of the State which had the consumer who bought at the point of final sale.

Now, your Honours, in our submission, that squares away entirely with the submissions which we make. It squares away entirely with the approach of the Court dealing with the extension of the definition of excise as being limited to imposts on production or manufacture, production and manufacture at first sale and dealing with impost down to the point of final sale and I have already made the submissions we desire to make as to Justice Dawson in Parton pulling back from that which he may, if he wished to, have sustained from what we said in Hematite on consumption, but just leaving that undisturbed at the moment, your Honours, we submit that it remains that there is a perfect fit. Now, your Honours, there is a theme, we submit, under the States' submissions - - -

GUMMOW J: Section 93 is odd, in a way, or maybe it is not odd, but it operates in a temporal sense by reference to "the imposition of uniformed duties of customs", but then it goes on to deal from the point of view of consumption with both customs and excise. Now, does that suggest something about the relation between the two in the constitutional structure?

MR GRIFFITH: Your Honour, if you are referring to the chapeau, the restriction coming into force, this whole thing, the whole structure of this chapter, did not have any force until the State impost was supplanted. So that logically should be a natural starting point, in our submission, to say that when the Commonwealth first starts to impose, if you like, imposts in the traditional sense on production or manufacture, then this is the consequence. Perhaps Your Honour's question is taking it a bit further than that.

Your Honours, we would make the point that section 95 is confirmatory of this construction of section 93 which we make. We say it is not a construction, it is just reading it in its plain meaning. That is what it provides, and section 95 complements it by indicating that imposts on goods coming into a State, manufactured in other States and not imported goods from outside Australia under the new common tariff barrier, are to be regarded as within the area of prohibition. Although, as I say, for obvious reasons, having a look from the colonial point of view, it is appropriate to refer to it as an impost of customs.

States could not have customs duties for goods coming into the former colony from other former colonies after 1900. That was prohibited by the Constitution, save in as much as section 95 enables such imposts to be made. We Say they would be properly characterised as imposts of excise, but perhaps it does not matter in the result. Your Honours, we seem to make another point and sub silentio, your Honour, we would submit - - -

BRENNAN CJ: What did you say about section 95 and the States imposing duties of customs?

MR GRIFFITH: Your Honour, section 95 provides that if a State - only one State, Western Australia, imports a good made in another State of Australia, if there is an impost on the importation, that is called a duty of customs. Your Honour, our point is that it should be more characterised as a duty of excise.

BRENNAN CJ: Perhaps that rather illustrates the point that what the States or the colonies had before Federation was a power to impose duties of customs and excise, those terms being understood by reference to their own borders.

MR GRIFFITH: Yes, your Honour, we accept that.

BRENNAN CJ: Once section 90 came into operation, the term had to be considered in terms of the Australia border.

MR GRIFFITH: Yes, your Honour. I do intend to say more about this, but we would agree with that, your Honour. Perhaps I have got enough out of section 95, in my submission, and now to move on. Enough is enough, your Honour. We say section 95 and 93 do give support.

Your Honour, sub silentio, we submit, in the States' submissions they are a driving force from their position of the fiscal imbalance which we say their tables, which I have handed to the Court, without being enlarged upon, intended to create, if nothing else, an atmosphere, your Honour, that if there is a construction - perhaps this is to reflect no more than what Justice Gibbs has said on occasion from the Bench, and I see that he has also given a paper to the Samuel Griffith Society in 1995 preceding the fifth conference called, "A Hateful Tax: Section 90 in the Constitution".

So, if one comes from the point of view of saying, "We should not make the Constitution work adversely to the States any further than we should because of the fiscal position exposed by their financial tables", your Honours, our answer to that is dealt with in our submissions at paragraph 2.22 to 2.25.

Your Honours, we do wish fully to rely on this, because what we say the transitional reimbursement provisions did was to show that those who drafted the Constitution, and the colonial governments, quite fully understood and accepted the consequence of the exclusive vesting of power to impose duties of customs, and duties of excise. The table attached to our submissions shows the extent of that revenue, particularly in the non-protectionist States, but even in New South Wales. Duties of excise were 11 per cent of total taxation in the State, and 52 per cent customs duties. In the case of other of the States, of course, in Australia one got up to 76.6 per cent in total. They lost a far greater percentage of their revenue, your Honour, than the States refer to now as being attributable to their licensing franchise incomes.

Your Honours, I do not seek to go into the detail of the financial material put by the States. I assume it is accurate, your Honours. But there is a bit of a slide in it, with respect, because it refers only to State-raised revenue; it does not, at all, state the percentages of the entire revenue of the State. In other words, it does not give the percentage against total revenue, including revenue by reason of payments from the Commonwealth to the States being normal payments, or section 96, or any other payments. So, we have no idea, your Honours, of the overall percentage of State revenue, but that is something for the States to make anything that they might make out of it. But the percentage shown on that table is really a percentage of an unknown, so that it does not do very much, in our respect, your Honours.

But be that as it may, your Honours, let it be accepted that the States say, "Well, the franchise cases are a significant percentage of our revenue." I do not know whether they go further than that. Your Honours, one can say that underneath it is a submission if the Court embraces the generality of their submissions here, then the States would put it they can impose a general sales tax on all goods, they do not have to worry about franchise cases.

GUMMOW J: But granted, as you are saying, that the States were giving up so much consideration, what was the understanding as to what could replace it?

MR GRIFFITH: Your Honour, with respect, we say the Constitution makes it abundantly clear that they understood exactly what they had done to get the lion out of the way on the path. What they did, your Honour - we will not worry about reference to the costs of a dog licence, your Honour - they knew they had to do this, give up this complete revenue of customs duty and imposts on goods, as there were imposts on goods in Australia at 1900, the complete taxation revenue of imported goods, duties of customs and the complete revenue of imposts on goods, whatever that means, and that is in dispute at the moment - they knew they were losing the lot.

They provided specifically in the Constitution that on the imposition of uniform duties they would lose their departments as well. They provided specifically that they lost this power. It was not a concurrent power, such as ordinary taxation power, it was one which become exclusive to the Commonwealth. It was a big trade. But as we know - we can rely upon the historical material to which Mr Meadows took us briefly - that was realised as something that had to be done to get the result to get the Federation.

We should thank those that are involved that they are prepared to give up matters of colonial self-interest and financial interest must be regarded as a principal interest from the point of the colonial governments to - - -

GUMMOW J: Yes, but these people were not all that high minded. How were they going to supply their budgetary requirements?

MR GRIFFITH: Your Honour, they made provision to say, firstly, the Commonwealth will determine external tariff, whether it be protection or free trade. Then they contemplated, your Honour, the detailed scheme of sections 87, 89, 93 to 96, that the States nonetheless intended to retain a share of the revenue raised by the Commonwealth on imposts of duties of customs and imposts of goods.

GUMMOW J: Yes, but that was for limited periods of time.

MR GRIFFITH: Your Honour, one cannot - - -

GUMMOW J: Did not they think beyond that?

MR GRIFFITH: Your Honours, the provisions of the Constitution indicated that they did not, because what they did, they first of all contemplated the Commonwealth be in substantial surplus, and that was contemplated as being a continual state of affairs, not just one for the first five years. Your Honour, they had the foresight to realise that it was inappropriate to have a dead hand provision to say that three-quarters of Commonwealth revenues will be returned to the State, three-quarters of gross revenue. But they did make a provision for the return in the first five years which contemplated that there would be a return on that basis and, as I mentioned, section 93 provides for the division of such moneys between the States on the appropriate - - -

GUMMOW J: Section 94 says, "the Parliament may provide".

MR GRIFFITH: Yes, your Honour, I was coming to that of course. After five years - and we submit it was a very sensible thing to do, your Honour -they contemplated that one would review where you are fiscally and Parliament might make provision of it. Your Honour, they could really seek to do no more. As things turned out, of course, the surplus was not something to eventuate and after five years, if you were expecting to get three-quarters of your money back, you would be disappointed, but that is the operation of the constitutional terms themselves.

Your Honours, the States did have their other revenue sources; we mentioned on Thursday that some States had already imposed income tax. Your Honour, whatever was the case, the new States were content with the position, that they appreciated that this whole bundle of impost, those referred to in our table attached to our submissions, were going, on the imposition of uniform duties of customs and excise completely, exclusively, permanently to the Commonwealth and that the provision they made to deal with that are the limited provisions I have referred to, sections 87, 89, 93 and 96, perfect or imperfect as they may be.

What they do indicate, your Honour, with clarity is that this was realised, that this was the price to be paid to get around this lion on the path, to push him out of the way, to continue on the golden road to Federation. These matters had to be vested exclusively in the Commonwealth to make the Commonwealth work.

DAWSON J: There is not one word in any historical account which suggests that the States realised that this was excise applied to a tax upon goods across the board.

MR GRIFFITH: Your Honour, can I get to that point, but what I am making the point - - -

DAWSON J: Well, you are asserting that they knew this and that they did it with their eyes open. There is not one jot or tittle which supports that.

MR GRIFFITH: Your Honour, can I narrow the submission to a narrow basis? What the States realised that at Federation they had the percentage of revenue shown as duties of customs, which was more than half their revenue for all but one State, that they had a significant percentage of revenue which was imposts of duties of excise with respect to the production or manufacture of a limited class of goods of spirits, beer and tobacco products and what I submit, your Honour, is that they realised that all that revenue was going to the Commonwealth, the whole lot.

DAWSON J: Yes, but if you told them what a sales tax was and, "Do you mean that?", there is nothing to support the proposition that the States would have said, "Yes, we mean that too."

MR GRIFFITH: With respect, your Honour, we submit that is an entirely different inquiry to say - - -

DAWSON J: It is, but you are suggesting that history supports the view that they knew that they were giving away the total power to tax goods, not just excise, and nothing supports that.

MR GRIFFITH: Your Honour, they gave away the power over duties of excise, whatever that means.

DAWSON J: And they understood "excise" to mean what it meant in 1901 undoubtedly.

MR GRIFFITH: Your Honour, for the purposes of my submission it is sufficient to they gave away all excise, whatever that means, and that had a particular meaning at the time, namely, all the revenue that they derived from imposts on goods manufactured in the States at Federation, being beer, spirits and tobacco products. Now, your Honour, we make that submission on the structure on that situation. We say it is an entirely different submission to say what is the content of duties of excise as we now look at it with the evolution of new mechanisms of taxation, with constant connotation but new denotation and, whatever that is, your Honour, we submit it would be, to use Justice Deane's expression, to devitalise the Constitution to say that that meaning is something fixed and immovable - - -

DAWSON J: It is another top-down reason. It does not devitalise the Constitution at all. That is some concept that may be in someone's mind, but there are others who would say it devitalises the Constitution to do what you are suggesting.

MR GRIFFITH: Your Honour, to keep me moving, can I make this proposition on the narrow point that your Honour postulates it: however narrow excise was, our submission is that the colonies realised that all their revenue from that source was going irreversibly exclusively to the Commonwealth. That is the point we wish to make.

DAWSON J: And the question is, "What source?"

MR GRIFFITH: That is the next question, your Honour, but what we say is that it was quite clear that they realised that they were handing over all power on imposts on goods as they understood it at the time. That is the only point we wish to make and although, as Justice Gummow makes the point, they did not fix it up until 1997, they showed great foresight as they did in many things in the Constitution. They realised that these were issues which would necessarily evolve and as they have. They were a bit optimistic thinking they were going to get much back in the first five years. They were more optimistic to think they were getting anything out of section 94, but that is the way they dealt with it.

The colonies revenues were perfectly adequate for the first five years of Federation. One could submit they were perfectly adequate in the last five years of this millennium. If they are not one can say there is plenty of revenue mechanisms outside imposts on goods available. You have still got income tax; you have got VAT on goods; you have got death duties, whatever you like; financial transactions duties; payroll tax, if you want to. The jury is still out and whether payroll tax is economically regressive or not I think the tide has turned and it is now thought it is progressive rather than regressive, but whether that be the case or not, that is a matter for the States to draw on such revenue sources as they may have available to them, including such moneys as they may receive from the Commonwealth either directly or by section 96 grants or the like.

Actually I was going to make a reference to section 96 grants but Mr Spigelman seemed to take the view that if the Commonwealth had indirect ways of coercing the States, for example, section 56 grant, that was a reason to read down the operation of section 90. We submit that cannot be so. He cannot rely upon the operation of other constitutional or political mechanisms saying the Commonwealth can do something indirectly by using the grants power, for example, with conditions and that means the Court can be quite relaxed about whether or not it continues to vindicate what has been identified as the meaning of excise.

Your Honours, I will turn to your Honour Justice Dawson's point to say we still have to decide what excise was for that purpose of inquiry. We say, by and large, that the customs duties were protectionist but also revenue raising. Taxing local production basically must be regarded as simply revenue raising. One finds in the convention debates references to the origin of goods in the course of discussing duties of excise and customs in the debates on section 55 or section 90. It does not mean that this was intended to be a distinguishing feature. It was just showing that they were looking at the issue of where were we going to get revenue. On Federation the situation became a little bit more complicated because the status of the bounties between the former colonies changed. There were no longer foreign borders except for some anachronistic reason such as choice of law. Duties of customs became those imposed on goods imported from outside the whole body politic, the Commonwealth. On their crossing that boundary, they became goods which had access, we say, to the entire market within Australia.

>From the point of view of each of the former colonies, there was still the dichotomy between goods manufactured in the colony and those coming into the colony because all goods, whether imported or not, had to come into the colony if they were to take their place for sale with goods manufactured there. So one can say that a new class of good was created. One had imported goods which were imported into Australia which came into a former colony either directly or indirectly through another State or we had this third and hybrid class of goods which are now being relied upon and referred to, those goods that are not manufactured in the particular State but manufactured in another State, in other words, the goods of the sort referred to and identified in section 95.

Your Honours, we will pick up in our submissions whether or not one can then construct from this new hybrid good either a new definition of "excise" which embraces the point of manufacture, not manufacture within each of the States, the former colonies, but manufacture throughout Australia as the reference point to what makes out a duty of excise within the proscribed area. I have already indicated to your Honours that our submission is that the fact that Australia was created, in our submission, cannot be relied upon to slide from saying that excise on goods in Australia and for each of the States means imposts on production or manufacture on that good throughout Australia rather than throughout that former colony, now State.

We say that there is an impermissible slide there because, from a revenue point of view, the position remains exactly the same. There is a choice of imposts on goods manufactured in the State or imposts on goods which come into the State or, if one likes, imposts on both goods. We say the inquiry is whether or not there is an impost on goods once they are in the State, whether they are imported or whether they come into existence by manufacture which is what makes out excise, the prohibited area, rather than saying it is a question of production and manufacture which at 1900 must be limited to the State for the purpose of restriction, but after 1900 is one that slides somehow into the whole Commonwealth, even though it must be admitted by the States that they have no power to impose imposts manufactured in other States which do not come into their own State for the purpose of sale in some way or another.

What we would submit, your Honours, is that if there is a narrow view of "excise" to be derived by those who seek to derive it by reference to 1900 - and we make it clear that we set our submissions firmly against that - in our submission, it is to be articulated only by reference to the impost of production or manufacture within the State as it was in 1900, and the mere fact that after Federation there became six States and later the Territories, in our submission, cannot then be used as a vehicle to say the equivalent after Federation is to say an excise is an impost directed specifically to goods produced or manufactured within Australia.

Your Honours, looking first at the question of whether a State would wish to impost goods produced or manufactured within that State, we say that is to mark out an area of exclusionary prohibition which is almost pointless to contemplate marking out, because once you have an integrated economy in Australia and you have - - -

DAWSON J: But you do not. I keeping telling you this.

MR GRIFFITH: Even accepting your Honour's, points of "don't" I think I think I can still make - - -

DAWSON J: No one other than - I have never heard it suggested before that there was an integrated economy.

MR GRIFFITH: Your Honour, may I talk about the competitive position of the States with each other under the uniform customs umbrella, if I put it like that, whatever one says about their individual markets. Let us assume, your Honour, that each State has its own vigorous economy seeking to compete for the market throughout Australia in any product you like, cars, sugar, anything, your Honour, what we say is, unless a State has a monopoly on the product, such as only one State makes cars or only one State produces sugar and there is a customs barrier around Australia which means that persons in other States have to buy that product or go without, it would be each State wishing to compete for a market throughout Australia, which at the very least was intended at Federation, under the protection of whatever common tariff barrier there would be for external passing and repassing of goods, your Honour, we would say it would be economic folly after Federation for a State to seek to impose an impost limited only to goods produced and manufactured in that State.

DAWSON J: That may be so now but it was not so when you had a great debate as to whether Australia should be free trade or protectionist, because what you would get if a State took a view which was not the view of the Commonwealth, the Commonwealth being protectionist, would simply to impose - as New South Wales did when you look at the table you have handed up - an excise duty equal to the customs duty. In that State that would mean that the State achieved free trade contrary to the policy. That was what it was about. That has disappeared, admittedly, but that is what it was about.

MR GRIFFITH: Your Honour, can it not be about something else, in my submission, and that is, with respect, what we say is that at the start of Federation, 1901, upon the imposition on 6 October, your Honour, a State that which wished its produce and manufacturers to compete throughout Australia, if they were goods which could be sold throughout Australia, under whatever external tariff, protectionist or not, your Honour - let us assume a completely protectionist one, so the only market is products produced in Australia - would not seek to impose an impost on the goods imposed by reference to goods manufactured and produced within that State, because that would put them at an economic disadvantage of goods in other States. The only way that that disadvantage would be eliminated would be if all State imposed the same impost on that good manufactured in each of the States. What we are postulating here, your Honour, is - - -

DAWSON J: But, you see - I should not interrupt again because we are going over the same ground - a State can increase the cost of goods in the State in a variety of ways. Indeed, it has been forced to do so by ridiculous things such as payroll tax because of the view that has been taken of excise. In other words, States can of course make goods more expensive in one State than another. It is not dependent on any view of excise.

MR GRIFFITH: The point I wish to make, your Honour, that if a State wishes its economy to prosper and sell its products produced and manufactured in a State in other States - - -

DAWSON J: It may or may not, but what you are doing is recognising that a State's economy is its own affair, subject to such restrictions as are imposed by the Constitution.

MR GRIFFITH: Your Honour, that might one thing that I am doing, but what I am seeking to do in this example is to indicate that this is the very sort of impost, if it is identified as the area of prohibition which we say is the principal area if one goes to 1900, if you have a State which is imposing duties on beer, spirits and tobacco products, your Honours, and they wish to sell those beers, spirits and tobacco products in other States, my submission is unless the other States impose an equal impost, the State imposing will put their own product at a competitive disadvantage in trying to sell it interstate, they will not get the market.

Our submission, your Honour, is if one then says, "Well, this is what we mean at the heart of excise which the States mean" - perhaps it is dangerous to use the expression that has been used by your Honour Justice Gaudron - we say it is economically perverse to define the prohibition to be that very sort of tax that no sensible State would seek to impose. Your Honour, apart from exceptional examples, and it is very hard to think of any of them, one that I think might be an example is Gosford Meats, another might be the attempt of a State to impose an impost on a good produced in Victoria because basically, at that stage, Victoria had a monopoly of the Australian production in Hematite, Your Honour, our submission is that one just cannot expect any sensible State to impose an impost on goods by reference to the discrimination that it is on a good manufactured or produced in the State, because it must put them at a competitive disadvantage. It is not the sort of impost any State wants to impose.

DAWSON J: But if you are pursuing a policy of free trade, that would be a reason for doing it, and that was the debate at the time.

MR GRIFFITH: Your Honour, the point I wish to make is to say it is incorrect, in our submission, to make that out as the area or prohibition, that that was all you had to do to get the lion out of the path. We just submit, your Honour, that that is not what you had to do to get the lion out of the path. What you had to do is to agree that it was open season on all goods produced anywhere in Australia to come into the State. Your Honours, the way that was done is because the Commonwealth was required to impose impost on goods only on the basis they applied throughout Australia without discrimination.

DAWSON J: What you are really saying is that what was intended was an integrated economy when, as was said in one of the cases, the borders for economic purposes of the States disappeared. That just is not so.

MR GRIFFITH: Your Honour, we add a rider to what your Honour said in the - - -

DAWSON J: You cannot have that in separate State Parliaments, pursuing policies which are separate policies.

MR GRIFFITH: Your Honour, what we say is that when one has an impost on goods coming in from the other States into a State, which are then assimilated with goods, whether or not there are goods manufactured in that State of the same description, if they bear an impost on sale, we say in both cases, your Honour, it is an excise. But what we do say, your Honour, if one marks out the prohibited area as only being an impost on goods manufactured or produced within that State, and that is what the States seek to do, subject to their slide and saying, "We go throughout Australia", we say, your Honours, that that is something completely without support. It has no logical support, because it identifies an area of proscription which no reasonable State would wish to enter into, because it is economic folly if a State wishes to have markets throughout Australia for its products.

Every State must wish to do that, unless they have some magic tree that just has golden eggs that you pluck, rather than worrying about having a healthy economy. Now, your Honours, then to deal with that issue - and we say, your Honour, those who affixed in 1900 - that point just is something which just stops them having a rational basis for their submission. We have what we submit is the impermissible slide to say, "You rearticulate what you mean by `excise' for a State purpose." Not for a Commonwealth purposes. The Commonwealth purpose - there is no doubt; it is a uniform impost on goods throughout Australia. You cannot discriminate, the Constitution mandates it.

But for the States, in our submission, the inquiry must still be from the point of view of the State. Now, your Honour Justice Dawson in Philip Morris 178 CLR 617 discussed this issue of whether or not - I think in other parts of that judgment, and other of your Honour's judgments - whether or not - perhaps I am not doing your Honour's words justice - but whether or not one should fix upon production or manufacture in the State, as Justice Murphy did in Logan Downs, or whether or not one should say, well, let us, after Federation, look at it from the point of saying an excise, once one has the Commonwealth, must be a tax intentionally and specifically limited to goods produced or manufactured throughout Australia.

I think your Honour Justice Dawson in Capital Duplicators at page 617 said words to the effect that this is not a question "practically speaking, likely to arise". If your Honour said that, we would agree because we would say that one just cannot expect a State to impose imposts directed specifically on products produced or manufactured in the State and throughout Australia outside the State. We say it is hard to postulate an example. Your Honour Justice Brennan's example of tinned kangaroo meat, if there is no imports of tinned kangaroo meat, is probably an example if one was applying, not a criterion of operation but a substantive test, I suppose. But what we submit is that one just cannot expect a State to seek to enter the area of taxation of goods by reference to the discrimen of saying, "We impose an impost on all goods sold in our State, whether they are produced and manufactured in this State or whether they come in from other States being produced and manufactured there".

It is just not a mechanism that any State logically or economically could be expected to adopt. In our submission, it is as illogical to suggest that that is, after 1 January 1901 or, if you like, 6 October 1901, the limitation on excise which is proscribed on the powers of the States by section 90. It is not the sort of impost which any government entity would seek to apply unless it was doing it for a particular reason, namely, to avoid or evade or to move around some constitutional prohibition. But here it is not put on that basis. What is put is that is how we articulate the prohibition in post-1900 terms. It certainly was not how it was articulated at 1900 and, if we articulate it that way, then there is no problem for the States because "Don't worry about the franchise cases. We'll fix them up by imposing an impost on all sales in the State indiscriminately of whether the goods are produced or manufactured in the State, in other States or imported either directly or indirectly into the State of impost".

So the point we wish to make is that that is to construct an artificial area of immunity that has no actual content. It has no real content at all. It is not an area of taxation which existed in 1900. It is not one that can be constructed as an area for taxation of goods after 1900 and we submit that it cannot be the area of limitation.

Now, the extra point that we have also made, of course, is that we submit that a State cannot impose a tax effectively on goods manufactured outside a State. We say a State does not have power to do that, that the reach of its tax only starts to apply once it comes in the State and we have made our submission that to apply that impost on sale within the State, even indiscriminately with other goods manufactured in the State, is in substance to tax the importation into the State, even if it is not levied until after that, and we say that is something which the Constitution entirely prohibits because it would be the equivalent of customs at the State level and I do not think it is necessary for me to refer again to the examples we have made as to that.

Now, your Honours, could I give the reference to Justice Murphy in Logan Downs 137 CLR at page 84 and there are other citations by your Honour Justice Dawson in Capital Duplicators 178 CLR at page 603 footnote 86 and also Justices Toohey and Gaudron in Philip Morris 167 CLR at page 479 and we would accept what is there put as referring to the argument, if there is one, as being limited to imposts on goods manufactured within the State and we submit that the extension to that concept which seems to be embraced by your Honours Justices Toohey and Gaudron in Philip Morris at 479 and 480 and as referred to by your Honour Justice Dawson at 616 point 9 to 617 point 8 in Capital Duplicators is, in our submission, respectfully to rearticulate that which is a proposition which, if it is to be embraced, is one which conceptually can only be embraced in its original form limited to States.

So that, your Honours, when one goes to Capital Duplicators 178 CLR 567, one saw the defendants argue that on the historical argument:

The production or manufacture

to have any credence

must be within the jurisdiction of the imposer of the tax.

We say, your Honours, that a limitation so confined destroys entirely the function and purpose of fiscal prohibitions of the Constitution to establish a single free trade area within Australia and is prohibited by the Constitution. We note that this narrow view is not embraced by any of the States appearing before the Court today as distinct from Capital Duplicators where at least one of the States did embrace it.

It is alleged by the States that the constitutional prohibition of duties of excise refers to a sort of tax, apart from the historical areas of impost and the production of wines, spirit, tobacco, and nowadays we would say energy, petroleum and coal, which just do not exist nowadays as impost on goods in Australia. At Federation there was a limited category of goods but what is now postulated by the States is that one should turn around what was the area of limitation, which they confined historically to this narrow area of products where the production and manufacture in Australia was imposed, and to re- articulate what they say is the proscribed area by reference to whether or not goods are taxed by reference to their production or manufacture through the new entity which came about at Federation.

Your Honours, what we say is that it just cannot be the case that - I am dealing with goods in the course of distribution after production - one determines whether or not there is an excise because of whether or not the goods are locally produced.

Your Honours, quite apart from the issue of is the limitation Australia or is the limitation the State of production, we submit there are almost no examples of any such taxes imposed over the last 97 years by the States. States do not seek to impose imposts on production within the State and we say they do not seek to impose imposts by reference to the taxation of goods manufactured in other States. They have not attempted to impose such taxes because we say we recognised they are entirely prohibited.

Your Honours, one exception to this is, of course, is the ACT attempted to impose such a taxation with respect to goods produced in the Australian Capital Territory, not because it was perceived that section 90 might not apply to it if it applied, it was seen - one assumes, your Honour, that the section 90 problem was one which was seen as not arising. Because of the issue which was argued in Capital Duplicators [No 1] section 90 did not apply to the Territory. Your Honours, really it is only an impost of the sort that came from a Territory law where one got to a modern example of any attempt by a State to impose imposts of the sort which the States now say is the limited aspect of their operation.

BRENNAN CJ: Mr Solicitor, I have noticed the time and I note your comments at the end of the last day's hearing. Mr Jackson has indicated that the plaintiff wishes to have two hours to deal with this matter. When would you expect your submissions to finish?

MR GRIFFITH: Your Honour, I was intending to be shorter than my expectation on Thursday because, your Honour, if I may explain our position, that the States have filed some 20 centimetres or so of information on the convention debates, historic material and writers, and what we have done, your Honour, is that we have reduced our response to that to a 10-page written submission which, if the Court would grant me leave, I would intend to hand up to the Court rather than to address in oral argument, and that would have the effect, your Honour, that I would hope that I could be well finished in under an hour.

BRENNAN CJ: Yes. That is acceptable, Mr Solicitor, and on that basis, I should indicate that for an equal distribution of time, if my calculations are right, your argument should be completed by 3 o'clock this afternoon.

MR GRIFFITH: Your Honour, I will do that, but I hope I did have my foot in the door to say that there is a different view of equality, in our submission, which now will not arise on that ruling, your Honour, but we say that - - -

BRENNAN CJ: You may have had a different view about equality but, if so, we will entertain whatever submissions Mr Spigelman will have to make on that subject.

MR GRIFFITH: I will not make them but, your Honour, I say I have had 9 hours 5 minutes of pleading from six sets of pleaders, and that is what I am answering, but 3 o'clock, I expect to be finished before that if your Honour, when I come to the point, will accept my written submissions which, otherwise, would have taken an hour or so, your Honour. Your Honour, thank you for interrupting me because I could apprehend your Honours were becoming restless and I was getting agitated that perhaps my argument was not reaching you rather than - - -

BRENNAN CJ: It was not a question of restlessness. It was a question of ensuring that the times were equally distributed.

MR GRIFFITH: Yes, your Honour. We worked hard over the weekend to meet what we can probably say in the proper sense the word "anticipate" the restlessness from the Bench, your Honours. If I could now move into what might be an area of some risk but, your Honour Justice Gaudron, may I return to your suggestion of the view that if Parton is correct, the franchise cases might be regarded as a perversion of the Constitution. I hope we have made our position clear as to how we regard the franchise cases, merely to accept the characterisation made. If the Court changes its mind about that, then the franchise cases will not be supported within the definition of "excise" which we postulate.

But I come back to this reference because we say if one thing is clear, it is that it was intended that the existing excises at 1900, the production of spirits, beer and tobacco, which were all the imposts which would be imposed, would pass exclusively to the Commonwealth on Federation and that the power to impose duties of customs with respect to all goods, including those goods if imported, and the imposts of duties of excise on those goods at the very least should be exclusive. Your Honours, we have handed up our chart which indicates that by and large all colonies had somewhat higher imposts of customs on imports of these products, which were all the products which were subject to duties of excise at Federation, than were imposed by the local and admitted duties of excise.

We say it must follow that it is beyond argument that the Constitution intended that the power to impose all imposts on these products, whether imported or produced by the States after Federation, pass to the Commonwealth. That must be the narrowest ambit of what past exclusively. Now, the States submit, and agree, that they cannot impose an impost on importation into Australia. Now, your Honour, that is agreed. Your Honour, we would say that there would, in effect, be - I hope I use the term advisedly - a perversion of the Constitution if one were to adopt what the States now submit, to say that that is the very thing that was proscribed to the States. They cannot impose imposts on, say, spirits and beers and tobacco products imported into Australia after Federation; they cannot impose an impost on those goods on production and manufacture in Australia.

To accepts the States' postulation that, if by passing a single law, which they could not pass individually, because if it was passed individually it would either be a duty of excise or a duty of customs with respect to locally manufactured - they say throughout Australia - or imported good respectively, that they nonetheless, by a comprehensive law expressed by reference to being a sales tax on goods as goods sold within the State, impose a composite impost which has the result that goods manufactured in the State, goods manufactured throughout Australia, and goods imported, bear an impost.

Now, in our submission, your Honours, that is to give back to the States, if their submission is correct, the very fiscal power which is that specifically and openly surrendered by the constitutional compact. So we say the result, and not just in a practical sense, but the actual result of the.....article of commerce test is not merely to abrogate what was the limitation with respect to the loss of capacity to impose a duty of excise on these very goods, it would be to abrogate, in effect, the other aspect of prohibition on the capacity to impose a duty of customs.

Now, your Honours, we would say that in this context the only relevance of the franchise cases is whether the Court will stand by its decision that the licensing cases do not constitute an impost on the goods and we would merely make a formal submission on that, but we do not intend to do that in any way to undermine our principal argument that we submit what the States seek to do by imposing their impost indiscriminately on sales of goods imported or manufactured in Australia is to wholly subvert, we say, the constitutional compact, the crucial aspect of Federation, that which has more sections devoted to it than any part of the Constitution, to obtain what was a clear and intended result, which one sufficiently derives, we say, from the terms of the Constitution itself.

Your Honours, the point was made by Justice Gummow in an interjection with me on Thursday that section 90, as we understood the way he made the point, is a guarantee to the people of Australia and I will not read again the citation from Capital Duplicators [No 1] at page 279 which I read into the transcript at pages 274 to 275, but we do say that the State argument, not only is it something which might be regarded as affected with the reserve powers doctrine, in our submission, it ignores the fact that section 90 is there not just for the benefit of the States' or the Commonwealth's political entities, it is there to provide, we submit, a guarantee to the people of the Commonwealth that Federation means an elimination of customs duties between the States and that there will be trade between the States which is free in the relevant sense to which I have referred to.

So that we say that that requires that persons engaging in trade and commerce in business in Australia would not be advantaged or disadvantaged by discriminatory taxes on goods depending on where they live and where they have their businesses and where they seek to send their products to for eventual sale. We say that there is also the aspect that the constitutional compact is the people of the Commonwealth will bear equally the burden of taxation on goods and also, if one likes it, to have benefit on equal basis of benefit of any bounties but they are not really in the economic ring at the moment - bounties on production and manufacture.

Your Honours, we accept that that is not a universal guarantee because it is only, so far as section 90 is concerned, one which applies as to goods. Now, that might be for historical reasons because in 1900 trade was regarded as trade in goods. But whatever that historical and physical limitation to leave out the intangible and the fungible which is so much a matter of contemporary trade, in our submission, section 90 does establish that as something to provide the parameters with which the people of Australia conduct their affairs and conduct their businesses and engage in a competitive way being entitled, we submit, to manufacture, produce and distribute their product when they be goods throughout Australia.

Your Honours, could we also make passing reference to the Allders decision which we make in paragraph 3.4, 3.5 in that, your Honour, what we submit is that if one seeks to exclude the operation of section 90 from its obvious meaning, then one at the same time has a reciprocal effect of reducing the Commonwealth's area of exclusive power with respect to duties of excise under section 52(iii).

We say, your Honour, this is a power to be construed as a plenary power, with the same level of generality as other powers, but that is not enough, your Honour, we say that on this power, of course, for the reasons we have referred to, constitutional, structural, contextual, historical, is even more reason that this power be given its proper breadth.

Your Honours, could I then make a reference to my learned friend Mr Spigelman's opening point on bounties. I have already passed quickly past his mirrors. Your Honour, to return to that briefly, it is our submission that in effect there is no logic in the argument my learned friend put. I have already noted that it is also something that the Court has considered previously in Duplicators [No 2]. Your Honours, clearly enough section 90 reads perfectly happily with the words "limitation, production or manufacture" is attached to "bounty". Your Honour, it is only attached to bounty, it is clearly not attached to excise, and we refer back to submissions we made a short time ago as to the Constitution stating that which it meant as the production and manufacture.

That works quite happily, your Honours. If my learned friend says, "Yes, but the States have other ways of making payments by way of bounty or benefits by way of bounty further down the line, then that might have the same result." So be it. These are the sort of aspects of State activity that Justice Dawson and I have identified in our exchanges which are not proscribed by the Constitution, so that that is the parameters of economic activity in the State.

As your Honour the Chief Justice pointed out, there might be perfectly appropriate reasons why a State might choose to have some freight payment or equalisation payment or fuel subsidy, distribution fee, whatever it might be, having regard to the geographical spread of activities, particularly in those geographically large States. The Constitution does not prohibit that. That just says, "You can't have the bounty if you want to engage in these sort of things in production manufacture".

Bounties are not a big issue economically any more in production or manufacture. States may make payments by subsidy, freight support or anything they like down the distribution line, and that is not proscribed by the Constitution but, in our submission, the fact that that is so cannot be used to build a structure that my learned friend seeks to do, namely, to say that bounties for the constitutional mandate are to be regarded as coextensive and reflective of duties of customs and duties of excise, just a matter of mirrors. At the moment, of course, in a practical sense, bounties are not at that level of production or manufacture an issue at all in an economic sense but, even if they were, it is only those bounties that deal with production manufacture; that is what section 90 says and that is why it is only as far as it does say.

So that, your Honours, we would submit that my learned friend's first point in his oral submissions, one that did not have any attraction in the two versions of the written submissions, is not one that gives any relevant colour to the proper construction.

Your Honours, may I refer now to section 55? This was the principal argument in the States' written submissions. We submit, your Honours, that there is no real difficulty at all about section 65. If the purpose of giving exclusive power to levy duties of excise to the Commonwealth was simply to protect the Commonwealth's tariff policy as a mirror image of customs duties, as my learned friend submits, logically, sections 53 go 55 should require the government to put the two classes and measures in one Bill so one can have a tariff policy that is either rejected or accepted by the Senate in toto.

This is something which, of course, specifically did not happen in the Constitution. It was a suggestion at one time, and the distinctions are maintained. So that, your Honours, clear enough there is an acceptance from the point of view of the distinction in section 55 that the purpose of the exclusive power of excise in the Commonwealth is a different, and we say a wider one, than the reference to the issue of duties of customs and of bounties.

We say excise does not have a limited meaning to it being an impost levied as complementing an external tariff. Now, in paragraphs 3 to 7 of its submissions New South Wales put as their foremost proposition that there is an inconsistency between the settled construction of excise in section 90 and the meaning in section 55 and I will not read that assertion, but we say, your Honours, that a duty imposed on both goods which are of outside production and after they have crossed the border in each case may satisfy the requirements of section 55 that deal with one subject only.

Your Honours, we say the meaning of duties of excise and duties of customs should be the same in both sections 90 and 95. So we say that it must be a tax upon goods which is imposed equally upon imported and local goods. It is something which cannot be postulated as something neither a duty of customs or of excise. It quite obviously can be one. If it is imposed on the act of entry, it is usually of customs. If it is imposed on the good once it is in Australia, whether it is imported or not, we submit, it is to be regarded as a duty of excise.

We seek to deal with this point in paragraphs 2.37 to 2.39 of our submissions, and we would refer to what your Honour the Chief Justice and Justice McHugh with the then Chief Justice Sir Anthony Mason said in Mutual Pools [1992] HCA 4; (1992) 173 CLR 450, where the three of your Honours were agreed that it was at the stage at which the goods were sought to be taxed and not the origin of the goods which determined whether a tax was to be a duty of customs or excise. I should add that your Honours in doing that at page 452 were not entirely joined by your Honours Justice Dawson, Toohey and Gaudron, who seemed to leave the question open at page 467.

In the context of section 90 we say the same conclusion was reached by the majority in Duplicators [No 2], particularly at page 589 to page 590. We give reasons as to this in paragraphs 4.1 and 4.2 of our written submissions. At pages 589 and 590, your Honour said:

Once it is accepted that the duties of excise are not limited to duties on production or manufacture, we think that it should be accepted that the preferable view is to regard the distinction between duties of customs and duties of excise as dependent on the step which attracts the tax: importation or exportation in the case of customs duties; production, manufacture, sale or distribution - inland taxes - in the case of excise duties.

We say, your Honours, this view accords with the historical concept of duties of customs being duties levied at the border. Any other view creates an artificial distinction which was not made prior to Federation which would lead to anomalous results, paragraph 2.19 of our submissions. It would also mean that the validity of a Commonwealth law under section 55 and the validity of a State law under section 90 might vary according to where goods happened to be manufactured from time to time. We deal with this in paragraph 2.20 of our submissions. We say, your Honours, that cannot be right because there must be certainty.

Your Honours, would it assist if I distribute our 10-page written submission on the historical materials, being the convention debates, the economic literature and the other material filed by the States?

BRENNAN CJ: Yes, thank you, Mr Solicitor.

MR GRIFFITH: Your Honour, I could indicate that I would expect to be finished comfortably before 3.

BRENNAN CJ: Yes, thank you, Mr Solicitor. The Court will then adjourn until 2.15.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

BRENNAN CJ: Yes, Mr Solicitor.

MR GRIFFITH: Your Honours, if I may firstly correct an injustice to Sir Anthony Mason. I referred to his statement in Hematite 151 CLR 631 and assay the criticism of his assertion as to the reach of the taxation power in section 109. Your Honours, if I may again be permitted to refer to Mr Jackson's argument in the transcript, in Capital Duplicators [No 2] on 21 April 1993. There was an exchange that perhaps I could read into the transcript on this point expressing Sir Anthony Mason's views on the extract at page 631.

McHUGH J: He resiled from it, did he not?

MR GRIFFITH: Your Honour precipitated it.

McHUGH J: Yes.

MR GRIFFITH: Because your Honour said to Mr Jackson:

I am sorry to interrupt you for the moment but I would like to hear you at some stage on the power of the Commonwealth to set aside state taxes which interfere -

I know that in Hematite two Justices said:

The Commonwealth has the power, speaking for myself, I have grave doubts about it.

The Chief Justice said:

I would like to hear you on that as well.

Then Mr Jackson made his submission which I can leave him to support. The Chief Justice said:

That, I think, was the view the Chief Justice Gibbs and I expressed in Hematite. On reflection I doubt, myself, whether it is correct.

So that his Honour there showed the same engaging openness of mind that your Honour Justice McHugh sometimes exhibits, if I may say so. If I could call that statement in aid to support the submissions I made, not remembering that exchange.

Your Honours, may I say something shortly about the legislative structure of the Commonwealth in respect to duties of excise and customs before leaving section 55? In the case of imposts of customs, your Honours, the whole structure of the Customs Administration Act 1921 is concerned with control of goods at the barrier, not at all with subsequent transactions within a country. So, for customs duty no issue of providence arises; it is just the question of entry. Your Honours, once goods are imported and have been entered, that is the end of the reach of the customs power.

So, under the Customs Act provisions, goods are under the control of Customs until entered for home consumption or transhipped and, under section 132 of the 1901 Act, customs duties are payable when the goods are entered for home consumption. So far as excise is concerned, your Honours, I indicated that excise tariffs have been imposed on those traditional goods including petroleum, and also coal, and the relevant legislation is Excise Tariff Act, Excise Act 1901 , Coal Excise Act 1949 , Petroleum Revenue Act 1985 and Petroleum Excise Act 1987 .

The items subject to excise are set out in schedule 1 to the Excise Tariff Act 1979 but, in summary, the principal articles are alcohol, beer and spirits, tobacco, cigarettes, cigars - the traditional 1900 items - petroleum, including various fuels, oils and condensators, and also coal. Wine is not taxed under the general excise law, but under a separate Act; the Wine Grapes Levy Act, which imposes a levy on the quantity of fresh grapes, dried grapes and grape juice used in a winery in manufacture, so it is a tax on the ingredients used in the manufacture of wine.

Apart from that, your Honours, the scheme of the Commonwealth law is implemented, so far as imposts on goods are concerned, by the sales tax legislation, so the Commonwealth sales tax legislation also constitutes duties of excise on the settled construction as levies by way of taxes on the sale of goods, and sales taxes under Commonwealth law are imposed, regardless of origin, whether the goods are local or imported, under the Sales Tax (Exemptions and Classifications) Act 1992 and the Sales Tax Assessment Act 1992 .

I mentioned in argument on Thursday that the 1930 Sales Tax Act 1992 was spread across 13 separate Acts because of uncertainty as what was and what was not an excise. Because of residual uncertainty, the Commonwealth has enacted now three separate Acts; the Sales Tax Imposition (Excise) Act which imposes sales tax so far as it is a duty of excise within the meaning of the Constitution; the Sales Tax Imposition (Customs) Act 1992 imposing sales tax so far as it is a duty of customs; and just to make sure that everything is covered, the Sales Tax Imposition (General) Act 1992 imposes sales tax only so far as it is neither duty of customs or duty of excise within section 55. So that the section 55 problem is thereby avoided.

Your Honours, may I make a brief reference to the historical materials, the 10 page submissions which I handed to the Court on the adjournment? Firstly, to tell us a little story, your Honours, and secondly, to make a passing reference to Lansell v Lansell by reference to the citation which we make in paragraph 3.1 of the submissions to Lansell v Lansell.

Your Honour, the story I make is by reference to a proposition we make in 2.5 of what is improper and what is improper use of the convention debates and that is to pick up the anecdote of Justice Scalia which is to say on one occasion his Honour tells the story that he was reading the brief in support of a certiorari application and he was surprised to find the opening paragraph said, "Unfortunately, in the absence of any assistance from the extrinsic materials, it is necessary to have recourse to the words of the Act" and the way the Justice told it was far better than the way I told it, but that is the message, your Honours and we say - - -

KIRBY J: It sounds hypcrophal.

MR GRIFFITH: Yes, your Honour, but Justice Scalia's plain speaking as I also will refer to in what we say is the last word on the prospective overruling debate without taking views on whether or not he is expressing a conservative or radical view, in our submission, is wholly apposite as an approach to this issue, but we will let our submissions stand for themselves, but your Honours will see in paragraph 3.1 we refer to Justice Menzies in Lansell v Lansell dealing with the issue of how one should construe a grant of power by reference to meaning in 1900.

Now, your Honours, in addition to that reference, footnote 18 picks up citations to Justices Kitto, Taylor and Windeyer whereby remarks of equal effective effect are made. Now, I will not detain your Honours by reading each of those extracts other than to say each of their Honours there in Lansell v Lansell make the precise point which we seek to make as to the evolving denotation of the aspect of meaning of excise. We have sufficiently in our oral arguments made the point which we seek to make, namely, that one cannot certainly restrict the meaning of duty of excise to imposts on spirits, beer and tobacco products as it was in 1900 and we make the point that logically one cannot say, as the States do, that means, in effect, the same thing as saying that in 1900 the meaning of imposts of excise in Australia were limited to taxes on goods produced or manufactured within each separate colony.

That is an exegesis on the meaning of excise by reference to that historical fact just as much as it might be suggested by those opposing our submissions that whereby we say that it is much a duty of excise, having regards to the evolution of the concepts of indirect tax and taxation of goods. It is better to use the latter expression by reference to a tax imposed on the course of dealing in the goods to the point of final sale to the consumer by indiscriminately, we say, of whether or not the good is manufactured in the State or whether it is manufactured in another State or Territory or whether it was imported directly or indirectly into the State imposing the impost.

Your Honours, we do particularly have reference to the various Justices of the Court in Lansell v Lansell in the citations we made in footnote 18 of our written submissions. Your Honours, may I then pass to a brief reference to the United States' position, which was raised by Justice Gummow during the course of the hearing last week. As his Honour - - -

KIRBY J: I missed what we were supposed to do with this Harper v Virginia Department of Taxation.

MR GRIFFITH: I am coming to that on prospective overruling.

KIRBY J: I see.

MR GRIFFITH: I did not intend that to reach your Honours yet, but that is our last - - -

KIRBY J: I will just leave it to one side, then, until you - - -

MR GRIFFITH: Leave it to one side, yes. Your Honours will be able to look at that with fresh countenance, because when I come to that point I am in my last paragraph and I am finished. So if your Honours could look forward to that with enthusiasm, and it will only be a few minutes. Your Honours, turning to the question of the United States' position, section 8(1 )of the Constitution confers powers on Congress to lay and collect taxes, duties, imposts and excises. The Constitution contained a prohibition on direct taxes under section 9(4). In order to sustain taxes from being characterised as direct taxes, the Supreme Court generally advanced a broad view of what were duties, imposts and excises within the meaning of section 8(1). So that, for example, in Thomas v The US [1904] USSC 53; (1904) 192 US 363, the Chief Justice said these terms:

were used comprehensively to cover customs and excise duties imposed on importation, consumption, manufacture and sale of certain commodities, privileges, particular business transactions, vocations, occupations and the like.

In 1913 the Sixteenth Amendment removed the prohibition on direct taxes to the extent that it had been held to limit the taxation of income. Your Honours, we have a citation to Tribe "American Constitutional Law", second edition, pages 318 to 319. I will not delay by distributing that now but indicate that we have copies of that available for the Court.

In Flint v Stone Tracey Co [1911] USSC 40; (1910) 220 US 107 at 151, the court quoted from Cooley "Constitutional Limitations" 7th edition to the effect that excise is a tax:

laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges."

What one has discovered both before and since is that these United States cases confirm, despite a rather different taxation provisions, that "excise" is a term of wide import and demonstrate that this was understood to be so at the time the American Constitution was being drafted. His Honour Justice Gummow did refer to Story, in particular paragraph 940, and we have an extract from that which we will distribute to the Court as well, but that is to do no more than to pick up his Honour Justice Gummow's citation.

KIRBY J: What is the value that you make of the United States material, given that they took the direct/indirect tax distinction and the Canadians seem to have followed that and we took a completely different pattern?

MR GRIFFITH: Your Honour, we say that firstly there is nothing against us there. Secondly, the approach of the United States is to confirm the view that the term "excise" is a matter of wide import and not something which should be confined. But we would indicate that, as our written submissions show, we did not find any particular comfort from the United States provisions. That is why we did not include references in our written submissions but feel it is appropriate to respond to the fact that Justice Gummow in argument did inquire as to the position and that is our response to it. In a nutshell, your Honour, not all that much, but whatever is there would tend to endorse the view. We say when one is dealing with a power of the federal government, excise is regarded as having wide import but that does not really take us very far. If your Honour put it down as "nil return", that would be sufficient.

McHUGH J: Story in the 1891 edition of the commentaries certainly defined "excise" very widely. She said it was paid sometimes upon the consumption of a commodity or frequently upon the retail - - -

MR GRIFFITH: Your Honour, that is the paragraph identified by Justice Gummow which we have here for distribution. We are quite happy with that, yes, your Honour, as approach, but it is of course within the context of the American constitutional provision which I summarise, but that does indicate, in our submission, the appropriate view to the Court to consider which, in the case of the United States Constitution and the Australian Constitution, is a plenary power of the federal body. But in this case the Australian Constitution of course has the reflective restriction on State power, but that would be affected by it. Yes, your Honour, my submissions were in the context of Story's statement as referred to by Justice Gummow.

Your Honour Justice McHugh, at the risk of seeming somewhat inflammatory to those who write rather than plead on constitutional law in this Court, referred to, in argument, the lack of support and academic writings for what might be put the Commonwealth's view of excise other than Mr Rose's writings. We must say something in response to that. What we say, that excepting present company on the instructing benches behind me, it is our experience, or perhaps I better take it personally and say mine, that except in almost all areas of current constitutional controversy, academic writings seem to follow in arrears the development of jurisprudence in this Court. I am just reflecting on this and a quick list I could mention proportionality; references to international law; political communication; section 92 - of course we had Coper but in the end they were not copious references to Coper in the pleading but Coper was there, that is admitted, in Cole v Whitfield; section 18; full faith and credit; almost nothing since Sir Zelman Cowan's seminal article in the late 50s; Commonwealth places, nothing at all; sections 56, 64, 79, 80, it is as if there is a blank page; Cigamatic, almost nothing that is any use, although there is a bit of - - -

McHUGH J: I do not know that Justice Gummow would agree with that.

MR GRIFFITH: Your Honour, I said present members of the Bench excepted for that. Perhaps I better leave Cigamatic out with the judgment on route. What we say is that it is not surprising, if one can generalise, and say in excise there is nothing much which gives assistance beyond judgments of the Courts. Coper regards the historical sources as equivocal. That much we are all agreed about. So that as in so many other matters the Court - - -

KIRBY J: But there is plenty of academic writing that is critical.

MR GRIFFITH: My friend has just mentioned the academic writing that is critical. I was going to be critical of it, your Honour.

KIRBY J: I hope you do.

MR GRIFFITH: What we say is this Court is the constitutional trail blazer - I will just be reading the Dambuster's book - in a way we come in as the mosquito and be the pathfinders and then the Court comes in with the heavy bombing and then the academics tend to make some comment more by descriptive than saying, look the Bench seems to be divided on this or that, rather than showing the philosophical route through any elements that a difference which might be turned up. We would prefer to rely upon the long string of cases, to use your Honour Justice McHugh's expression, but when we look at the academic writing on section 90 to be descriptive. They read to us, and we had to read them in preparation, as more as an exegesis on the text of the various judgments delivered by the Court; criticism of uncertainty and aspects of judicial disagreement which are obvious enough. Your Honours, when one looks to the comment or analysis, it seems to consist of little more than a plea for deference to the fiscal imbalance and not as we read the articles, any effective argument for some alternative conclusion based on demonstrated history, context or purpose.

The academics tend generally to acknowledge the paucity of history as an aide to the interpretation of section 90. Your Honours, if we could regard Professor Blackshield as an honorary Victorian because he has had some time in La Trobe University, for the most part, one sees the call for address of the fiscal imbalance as a trade particularly of Victorian academics, and we say, your Honours, they form no real assistance to this Court on the task of interpretation.

Really, apart from Professor Zines' works, particularly at page 450, your Honours, of his current edition, we say there has been relatively little academic debate. Caleo wrote an article some years ago, I do not know whether it was before or after he served as associate on this Bench, your Honours, but there is very little. It is listed, your Honours, in recent writings at page 643 to 644 to Blackshield, Williams and Fitzgerald's Australian Constitutional Law in Theory which lists contemporary writings and, with respect, your Honours, there is very little there and certainly there is nothing there which is of assistance, we submit, generally to the Court.

So the point of this reference, your Honours, is to accept your Honour Justice McHugh's point, but to say that does not really, in this context, take matters very much. We tend not, your Honours, to find the academic support is in advance of what we must plead or what the Court decides, and excise is a good example of that.

Your Honours, make I take the Court directly and specifically to page 23 of our written submissions, part 4, and if we could encapsulate what our submissions are, we say them there in two paragraphs. Your Honours, we say the extract from the majority Capital Duplicators [No 2] at 590, which we extract in paragraph 4.1, does make the point which is at the heart of our submissions for result. In paragraph 4.2, we submit that this is not a radical articulation of what are customs duties and what are excise duties. Customs duties are taxes on goods. We say excise duties are duties of inland tax.

If we could pick up the citation to Blackstone which is extracted footnote 73 on that page, your Honours, one sees just the sort of statement that we say embraces what is the correct position on this matter, and it seems consistent with what Stephen said and one can see in the discussion that Justice Dixon engages on in Matthews v Chicory 60 CLR 293 at 299, the thread of this authority. Your Honours, may I now turn briefly to prospective overruling?

BRENNAN CJ: May I have your answer to Justice Dawson's question as to the difference between a tax on goods and, for example, a payroll tax?

MR GRIFFITH: I thought I had answered it several times, your Honour, but perhaps Justice Dawson could indicate - - -

BRENNAN CJ: What I am asking you, really, is what do you define as a tax on goods?

MR GRIFFITH: Your Honour, we define a tax of goods when there is a tax on goods in the course of manufacture, production, distribution and final sale, by reference to their character and dealing with them as goods which, by application - perhaps it is a bit circular, I had better stop, your Honour - which constitutes an impost on those goods.

BRENNAN CJ: Paid by?

MR GRIFFITH: Well, your Honour, paid by the person dealing with the goods.

BRENNAN CJ: So, it is the dealing?

MR GRIFFITH: Your Honour, it is the dealing, yes.

BRENNAN CJ: So, is it a particular kind of dealing?

MR GRIFFITH: It is a dealing with goods, your Honour.

BRENNAN CJ: Is it any kind of dealing with goods?

MR GRIFFITH: I would not say any kind of dealing with goods, your Honour. It is dealing with goods from the process of production and manufacture to the point where they reach the consumer on final sale.

DAWSON J: What about, for instance, a tax on the carriage of goods?

MR GRIFFITH: Your Honour, that may be an excise in some situations.

DAWSON J: What if it is related to the weight of the vehicle?

MR GRIFFITH: Your Honour, it probably would not be.

DAWSON J: But if it were?

McHUGH J: As in Brown v Crupp - Crupp, was it?

DAWSON J: Yes.

MR GRIFFITH: Your Honour, it depends on the particular circumstance. If the way it is related to weight has the effect that one can say, in effect, you are taxing the good in the course of production, manufacture, distribution, private sale, well then, it may be - - -

DAWSON J: Why is it not a tax on goods?

MR GRIFFITH: Well, your Honour, in some circumstances it might be.

DAWSON J: But in all circumstances why would it not be?

MR GRIFFITH: Your Honour, because if it is equivalent to an impost of the sort that Justice Gaudron referred to - - -

DAWSON J: Well, it is. It is an impost on the distribution of goods.

MR GRIFFITH: Your Honour, but if it is just a registration fee for the vehicle, we submit that it would not be - - -

DAWSON J: No, if it is a tax.

MR GRIFFITH: That is a tax on the vehicle, your Honour. But we submit, your Honour, ordinarily that would not be an excise because it is not, in any way, an impost on - - -

DAWSON J: Why? It will be passed on in the price of the goods.

MR GRIFFITH: Your Honour, being passed on is not, in our submission, the necessary criteria.

DAWSON J: Well, what is the criterion there?

MR GRIFFITH: Your Honour the Chief Justice has opened up an issue which I thought we had covered in our principal submissions on Thursday and - - -

BRENNAN CJ: I understand you thought that you had. I must confess, although I had heard the words "tax upon goods from the first moment of production up to consumption" I had never understood quite what it was that you said made a tax upon goods into that character.

MR GRIFFITH: Your Honour, it is a matter, in our submission, of applying the criteria of operation as modified by the substantive test to see whether or not one says that the impost is, by reason of its relationship with the good and the dealing in the good, to be characterised as being imposed on the good. If that test does not produce the result that is imposed on the good, then it is not an excise. If the test produces a result that it does, your Honour, as we have indicated in our submissions, we say by and large the result is clear. For example, in a sales tax where it is by reason of volume or quantity and the sale of that good by volume or quantity, then it must follow.

In the areas of difficulty, your Honour, we say the area is resolved mostly by going no further than the criteria of application but also with that gloss that one does not have regard to the statutory term itself and has regard to the substance of the matter as that has been articulated to complete the inquiry. If on that inquiry, your Honour, one concludes that there has not been the requisite connection of the imposition of the tax on the production, manufacture or dealing of the good to ultimate sale to consumer, then it will not be an excise.

BRENNAN CJ: Yes, thank you.

MR GRIFFITH: I hope I have repeated it in a clear form, your Honour, but our written and our oral submissions to date were seeking to make the point in that way and with the comment that we submit that by and large 97 years of constitutional history have shown that there is no real difficulty in the application of the test of inquiry as to whether or not an impost made by reason of a State law does or does not cross the constitutional prohibition.

BRENNAN CJ: I think I understand what you are saying now in terms of the liability which is imposed by reference to the taxpayers dealing with goods, the dealing being of particular kind.

MR GRIFFITH: Yes, your Honour, and can I make it quite clear that includes production and manufacture and first wholesale sale in the State. For goods not manufactured in the State, all goods coming into the State whether Australian or foreign manufacture, whether they come directly or indirectly into the State, and includes, of course, all dealings in sale down to the point of reaching the consumer, where we accept for the moment, your Honour, the Court seems to accept the case that it stops, perhaps not logically, but in deference to the use of the judicial committee.

BRENNAN CJ: Thank you.

MR GRIFFITH: Your Honours, may I make some very brief submissions on prospective overruling. Of course this was a matter of some agitation when raised. We have filed separate written submissions, your Honours. If I could take the Court briefly to those submissions. In paragraph 2 we make the point that in our submission, contrary to what was put to your Honour the Chief Justice at the directions hearing by the then Acting Solicitor-General for New South Wales, we submit the question of whether or not the Court has capacity prospectively to overrule is quite irrelevant to the issue as to whether or not the Court should reopen and overrule either Parton and the line of cases said to flow from that or the Dennis Hotels line of cases.

So we take direct issue to the suggestion which was made to your Honour the Chief Justice leading to this element being regarded and a section 78B notice being given as an issue before the Court and could I, in addition to the direct comments we make in paragraphs 2.1 to 2.5 in those written submissions, take your Honours to the extract of the judgment of Justice Scalia which we have distributed to the Court - - -

TOOHEY J: Just before you do that, Mr Solicitor, you have characterised this as a question of jurisdiction. Is that what it is?

MR GRIFFITH: Jurisdiction prospectively to overrule?

TOOHEY J: Yes.

MR GRIFFITH: Yes, we say the Court has no power to do that.

TOOHEY J: Yes. Well, your answer is the Court has no power. My question was, is it a question of jurisdiction or are you running the two together?

MR GRIFFITH: Your Honour, I am making one point and then I seek to make the question of jurisdiction point quite separately.

TOOHEY J: In what sense is it a question of jurisdiction?

MR GRIFFITH: Your Honour, we say the Court just has no jurisdiction to consider it in respect of overruling at all, because there is no power to do it. Am I at cross-purposes with your Honour?

TOOHEY J: Assuming the Court is seized of the matter and the question arises as to whether earlier decisions should be respectively overruled.

MR GRIFFITH: Your Honour, I am sorry, I am influenced by the history of the way this matter came up in this litigation, your Honour, but it was our primary submission, your Honour, that for the purpose of considering whether or not there was a power prospectively to overrule, assuming an excise case situation, our submission was that the Court did not have to consider that as a matter of the proper order and consideration of the case until it had positively decided that it was going to overrule.

TOOHEY J: Yes, I understand that, but I was a little puzzled by your moving between jurisdiction and power. It appeared as if you were talking about the same thing.

MR GRIFFITH: No, I am not, your Honour. I am sorry, I should make myself clearer. Perhaps I am pushing at an open door because my learned friend, Mr Spigelman, seems to have adopted a different approach and that was apprehended when the matter was raised extensively in the written submissions of New South Wales and in the section 78B notice which was served. Our response was to the written pleading and to the section 78B notice.

TOOHEY J: Are you saying, in effect, that the Court has no power?

MR GRIFFITH: I am saying that, your Honour, but for the moment on this point I am saying, even if there is a power or the Court might have to consider whether it has a power, we say the Court should not consider that until it has decided to overrule.

TOOHEY J: I understand that.

MR GRIFFITH: Yes. Your Honour, I am sorry, I might have gone in a circle there, but that is the order, logically or not. Your Honours have an extract of the headnote in a judgment of Justice Scalia in Harper v Virginia Department of Taxation, a recent 1993 decision. Could I take your Honours to page 92 of the Lawyers' Edition, left-hand column from the top of the page, where once more in his usual elegant language of someone who is a son of a professor of romance languages may have imbued at a young age, his Honour says:

Prospective decisionmaking is the hand-maid of judicial activism, and the born enemy of stare decisis. It was formulated in the heyday of legal realism and promoted as a "techniqu[e] of judicial lawmaking" in general, and more specifically as a means of making it easier to overrule prior precedent.

The point we seek to make in part 2 of our written submission is, we say that it should not be used, if it exists at all, to make things easier. So that is the first proposition that we make, that the Court does not have to even consider whether it has a power prospectively to overrule from the point of view of approaching the requests made by the States and the Territories that the Court should overrule Parton and then, of course, in the alternative we have the fall-back position, that it should not overrule Dennis Hotels. Really, this is where prospective overruling really become germane, it seems, in the States' submissions. If the Court is minded to overrule Dennis Hotels - the franchise cases exceptions - and is minded to take what we submit - or maintain what we submit is the established view of excise, the Court should only, so far as disposing of the franchise cases, do that prospectively.

That is where it is seized to be raised by New South Wales. We say there is a very high threshold test for overruling Dennis Hotels and it is not reduced at all as far as the level at the bar is concerned by a submission that there is not a power prospectively to overrule. We say the strict inquiry is the same. That is our first proposition as a matter of argument. Your Honours, our other propositions are directed to the proposition, we submit, that the Court does not have the power at all and, on that, we are content for our submissions, much as Mr Spigelman seems to have rested on the written submissions of New South Wales, we make in paragraphs parts 3, 4, 5 and 6 of our submissions by reference to the table of contents on the first page, what are four separate arguments as to why we say the concept in respect of overruling is alien and incompatible with the exercise of Chapter III power.

So the Court cannot have the power to overrule with respective effect because it has no power to give effect to that which is void under the Constitution. We say it would trespass beyond Chapter III and we say that the consequence of invalidity are matters to be dealt with by the fashioning of application of appropriate remedies by the Court and by the exercise of the powers of the Parliament within constitutional limits.

The plaintiffs have pointed to the existence of legislation of I think all States and Territories to ameliorate by reference to limitation period and perhaps more with respect to the bringing of recovery actions, and we say that is the mechanism, your Honours, to deal with any difficulties which may happen in the event that the meaning of "excise" is confirmed, as it was stated in Capital Duplicators [No 2] by a decision of this Court, but in a situation where what your Honour Justice Gaudron refers to as "the perverse" franchise case exception is disposed of by overruling or whatever the process might be termed.

Your Honours, the reason why we have distributed the judgment of Justice Scalia is that it did seem to us that the written submissions of New South Wales - and they were not enlarged upon by Mr Spigelman in his oral submissions - obscure somewhat what we say is the effective demise of the doctrine in the United States. The New South Wales submissions make but a brief reference in paragraph 13(e), preparatory to an argument which is put by New South Wales, that nonetheless, this Court ought not to be deterred because it is suggested that the Court is not constitutionally required to treat similarly situated litigants in the same manner. I will not say that your Honour Justice Gummow's expression was quite as robust as some of Justice Scalia in this extract of judgment, but your Honour did say - - -

KIRBY J: Was Justice Scalia in the minority on this point?

MR GRIFFITH: No, he is in the majority on this point, your Honour.

KIRBY J: On the point of prospective overruling?

MR GRIFFITH: Yes. He is really savaging the justice in minority here, your Honour.

KIRBY J: "Savage" is not an appropriate word, I think.

MR GRIFFITH: Well, your Honour, it is not in this Court, but it is a bit hard to use the word otherwise in some of these - I know they are all friends, your Honour, but they certainly do use stronger language than we would think of submitting to the Court by reference to - and certainly we are not accustomed to members of this Court speaking of each other's judgments in that way. But it is fantastic language, your Honour. Look at the bottom of the first column, page 92, referring to the recent jurisprudence he says:

It is so un-ancient that one of the current members of this Court was sitting when it was invented -

and words of similar import. Your Honour, perhaps it is not the language, but it is the robustness of expression, your Honour, does make the point. But I was saying, your Honours, that perhaps Justice Gummow was more elegant when, at transcript page 123, he put to my learned friend, Mr Spigelman, the doctrine:

seems to be the last gasp of the legal realist movement in the United States in the 1930s; it seems to have arrived here after it has expired in the United States.

That, perhaps, can be regarded as fully descriptive, and we would agree with that as a description of the present position in the United States. Your Honours, it might be unfair to my learned friend, but it did seem somewhat to deflate his inclination to pursue oral submissions in support, and his response to Justice Gummow did not show much enthusiasm, as we understood it, to take his position much higher than was described by Justice Gummow. No intervener, other than Mr Roberts, seems interested, and all Mr Roberts says is that he does not support prospective overruling because that could have a detrimental effect on criminal liability for past actions.

GUMMOW J: Mr Spigelman says that he has got a smart statute that copes with any problem.

MR GRIFFITH: He has got a smart statute?

GUMMOW J: Yes.

MR GRIFFITH: Well, he can rely on his smart statute, your Honour, but he cannot rely on this Court.

GUMMOW J: No, but he does not need to.

MR GRIFFITH: Your Honour, in that case, if he withdraws entirely the written submissions, we will stop. If he does not, your Honour, we say the answer is here in our 19 pages, chapter and verse, four different grounds - and your Honour, we say that however attractive it may be, the Court has no constitutional power for the reasons stated. Your Honour, we do say that Mr Justice Scalia does give an up-to-date summary as to why the Court should not find it attractive. But, your Honour, there being such a short exchange in argument, it seems that we did perhaps miscue to expect that we required two days additional to the original three days fixed to deal with prospective overruling. But it seems fortunate, indeed, that at least one of them has been made available because in the result with the six States supported by two silent Territories concerned, it was necessary to devote our primary attention to the issue of excise. If the Court pleases.

BRENNAN CJ: Thank you, Mr Solicitor. Mr Jackson.

MR JACKSON: If the Court pleases, we do not have quite the same interest in establishing positions for the future as do the States and Territories on the one hand, and the Commonwealth on the other. Your Honours, without being melodramatic, or perhaps unduly melodramatic, we are simply the people who may be made bankrupt, or go into liquidation, or, in the case of Mr Robert's clients, into prison if the law is valid.

In those circumstances, your Honours, we propose to confine our submissions in relation to the Parton issue to a number of discrete, not necessarily brief, but discrete matters. The first is in relation to the States' contention that the view of the majority, as we would put it, in Capital Duplicators [No 2] should be overruled. Could we say in relation to that question that if one looks at the report of the arguments in Capital Duplicators 178 CLR, pages 566 to 574, there does not seem anything very much new in this case and that view will be reinforced by looking at the written submissions and if your Honours could bear to, the transcript of the oral argument in that case. Even, your Honours, the quite amusing triviality of the grammatical chiasmus is not having its first outing.

Your Honours, the short fact is, in our submission, that one does now have a situation where one of the central issues arising under section 90 has been, in our submission, decided by the Court. The issue is one on which different minds might well arrive at different views and the 4:3 division of views on the Court demonstrates that fact. What does remain, in our submission, is that the Court has decided that the term "duties of excise" in section 90 does include duties on steps after production or manufacture. I will come to the detail of the tests a little later, if I may. The Court has, in our submission, decided that and, in our submission, it should be left that way. We would submit, if I may say so with respect, it is not good for the nation or for the Court if issues such as the Parton issue on which minds may obviously differ constantly return to the Court to be decided afresh.

Your Honours, I realise, of course, in saying that that the States may attempt to turn those words back on me in relation to overruling the Dennis Hotels exception but, and I shall come to this later, the tenuous basis or perhaps bases on which the exception now rests - and if I may say so with respect, your Honours - its somewhat bizarre operation in historical terms are, in our submission, sufficient to bring about a different situation in relation to overruling.

That is the first aspect with which I wish to deal. The second concerns the role played by section 90 in the Constitution. The arguments on the larger issue, the Parton issue, which have been sought to be agitated by the States have concentrated on the so- called policy of section 90 in relation to tariff, if I could use that term, compendiously to indicate the matters of trade. In relation to tariff matters the States argue essentially that the origins of section 90 lie in a desire to establish a common external tariff for the new Commonwealth as a concomitant of freedom of interstate trade in commerce in the sense of freedom from discrimination of a protectionist kind.

It is said that a common tariff could be undermined by the imposition by States of differing duties of excise upon locally produced goods and that, consistently with the objectives of the common tariff and freedom of trade that one sees in sections 90 and 92, that section 90 is then to be read as if the term "duties of excise" were confined to taxes on goods locally produced or manufactured. Your Honours, that is the way in which the argument is put.

So to identify the role to be played by section 90, in our submission, does rather skew the interpretation to be placed on the provision because it tends to mute the fact that section 90 is not just concerned with matters of trading policy. It has another end. It is a provision which reflects the heading of Chapter IV, "Finance and Trade", and it has a revenue purpose as well. It was intended to make exclusive to the Commonwealth and to deny to the States part - a highly important part - of the Commonwealth's power to tax. It was a highly important part because, as the document which is attached to the Commonwealth's submissions demonstrates, revenues from duties of customs and duties of excise form the lion's share of the revenues of the colonies at the time of Federation. Your Honours, I should not have used the term "lion". I know it has been used a little. Perhaps the duty of excise is more the sphinx than the lion.

Your Honours will see the figures referred to at the end of our learned friend's written submissions for the Commonwealth. Your Honours will also see a contemporary recognition of the position in Garran, "The Coming Commonwealth", 1897. Part of the extract I will give your Honours is already in the books but I wanted to refer to another part that is not there. May I give your Honours copies of that. There will be a couple of other documents I wanted to refer to. May I put them in this bundle to save having documents distributed more than once if I can avoid it.

What your Honours will see in the extract which commences at page 141 is - your Honours have already in the books page 142 but if one goes over to page 157, you will see the heading "Federal Finance". Then at the top of page 158 there are four questions referred to in the first paragraph and, amongst other things:

(2) what sources of revenue should be given to the federal government, and what kept by the state governments?

Your Honours will see in the next paragraph a discussion of the departments of the public service which would go over and so on, and then, about three-quarters of the way down the main text:

but that the power to raise revenue by customs and excise must be given exclusively to the federal government, and forbidden to the States. The importance of this last fact is obvious when we remember that in all the colonies at present - even in the most `freetrade' of them - customs and excise produce the greater part of the taxation revenue, and in some cases almost the whole of it.

Your Honours will then see on the right-hand page, 159, a table of the aggregate revenues. As that table shows under the "Expenditures" heading and as is discussed on page 160, some of the expenditure of the States would go away after Federation, for example, the Defence Force and so on and the other departments that were to be transferred to the Commonwealth, but not all of course. Your Honour Justice Gummow asked in the course of the argument this morning where were the States to get their money from after Federation. The answer is that the issue was rather unresolved.

That that is so, your Honours, appears from - if I can give your Honours two references in that regard. One is to an extract from Quick and Garran at page 188. Under the heading your Honours will see at page 188 of Quick and Garran, "The Financial Debate", it is discussed throughout, particularly through the first paragraph of that, where your Honours will see about a third of the way down the page:

The great central difficulty was to formulate.....some scheme of distributing the federal surplus which would not only be fair in itself, but would guarantee all the States against any dislocation of their finances.

That is elaborated upon through that paragraph. That illustrates, your Honours, if I may say so, the difficulty in arriving at a solution and such solution as was arrived at appears from an extract from Harrison Moore, "The Constitution of the Commonwealth of Australia", the second edition, at pages 530 to 531. Could I say, your Honours, that if one looks at page 530, the second new paragraph on that page, he discusses the financial problem and then halfway down page 531, says:

In the end, the course adopted was to make temporary provision in the Constitution and to leave the ultimate adjustment to the Commonwealth Parliament when the course of years had furnished the necessary experience.

So, your Honours, there does not seem a very conclusive answer to what was the position. In the end Federation came. Your Honours will see in the chapter which we have extracted from Harrison Moore that the actual course of events in the first 10 years is discussed and the great difficulties which arose between the Commonwealth and the various States. Could I move on from that to say this, that the terms of the Constitution itself in Chapter IV reflect the revenue purpose of the provisions of section 90 and make it apparent that the power to impose duties of customs and excise for revenue purposes only was of considerable significance.

Your Honours have seen that if one goes to section 69 first the colonial departments of customs and excise were the departments which were to go to the Commonwealth immediately, that is, upon Federation, and if one moves then to Chapter IV, as I said, headed "Finance and Trade", as soon as one gets past the general provisions of sections 81 to 85 one comes to customs and excise and section 87 makes it quite clear that the Commonwealth's power to tax by duties of customs and of excise was to be used for revenue purposes and instances of that happening may be seen in the materials.

Could I take your Honours for just a moment to the extract from Mills "Taxation in Australia" in the South Australian materials volume 2 at page 24. At the bottom of page 24 your Honours will see that at a very early point a resolution for the imposition of uniform duties of customs went to the House and then, if one goes to page 27, the first new paragraph:

The duties on tobacco, cigars, etc., were looked on as revenue duties only.

That is dealt with in that paragraph, and if your Honours go also to the bottom of page 25 you will see:

The Beer Duty was treated by both sides of the House as chiefly a revenue matter,

and then one sees on the next page, page 26, the first new paragraph references to, "The duties (and rebate) on sugar were" - and this is a matter to which I will come in just a moment - the imposition of a duty of excise was treated as something which could be used to implement a policy which itself was not a revenue-gathering policy nor one relating to any tariff or interstate trade or anything of that kind. Your Honours, the terms of section 90 would take away from the new States their largest source of revenue when colonies.

Your Honours will see if one goes to - and I will not take your Honours to the words of them at the moment - sections 89, 93, 94, 95, 96 and 97, that they are concerned more with revenue issues than with questions of trade. Your Honours, the point we seek to make out of all that is that one of the purposes of section 90 was to ensure that in the main revenue area used to that time, only the Commonwealth could impose duties of customs or duties of excise. There could not be and would not be similar State taxes.

Your Honours, that is the context in which one finds section 90 and, your Honours, one may see of course that the imposition of duties of customs or excise may be for revenue purposes I submitted a moment ago, but it also may be, your Honours, to raise money for other non- governmental purposes entirely unrelated to the promotion of any particular trade. Your Honours will recall, for example, post-budget headlines such as, "More money for pensions", "Beer and smokes up". Perhaps your Honours do not recall those, but there were such headlines I assure your Honours.

Your Honours, of course, the purpose of imposition of a duty of excise may not be to obtain revenue nor to do anything in relation to tariffs. It may be imposed to discourage dealings in particular types of goods or to encourage other forms of conduct. Your Honours, Fairfax v Commissioner of Taxation [1965] HCA 64; 114 CLR 1 demonstrates that the power to tax may be used to that end. Could I just give your Honours the reference to the relevant passages? They are in Justice Kitto at pages 11 to 12 and page 13; Justice Taylor at page 16; Justice Windeyer at page 18.

Your Honours, I should perhaps note in passing, there seems a slightly curious, with respect, qualification by Justice Menzies at pages 17 and 18 where he speaks about an income tax on the income of someone dealing in drugs as being somehow penal and not a tax, but that seems to be based on the nature of income tax. Your Honours, the observations in that case suggest that Barger's Case is incorrect and, indeed, if I could just add this, your Honours, in Murphyores Incorporated v The Commonwealth 136 CLR 1, at page 23, Justice Mason treated Barger as overruled; two other members of the Court agreed with him.

Your Honours, in our submission, if a State decided to allow the production, for example, of soft drugs or small arms and the Commonwealth was of the view that that should not occur, the Commonwealth could say, "Go ahead, but the excise duty on any dealing in them will be", for example, "1,000 per cent". Your Honours, the same situation obtains in relation to a customs duty. Your Honours, that may be imposed to encourage Australian production or manufacture, but it may also be imposed for no purpose of encouraging that but simply because the Commonwealth does not want the goods to come to Australia, it is not prepared to go so far as to prohibit them.

Your Honours, what we would submit is that if one looks at the various uses of the taxation power, bearing in mind the inhibition on the States brought about by section 90, it is the less likely view, in our submission, that the term "duties of customs and excise" should be construed narrowly, meaning by that as referring only to taxes of a certain form.

Your Honours, could I go back at this point to what was said by Justice Dixon in Parton 80 CLR 260, the passage to which considerable reference has been made. What your Honours will see is that if one looks at the actual words which his Honour used, what he said was not limited to tariff policy, what he spoke of was "a real control of the taxation of commodities". He was speaking of taxation policy, not tariff policy. Your Honours will see the words used:

In making the power of the Parliament of the Commonwealth to impose duties of customs and of excise -

GUMMOW J: Which page, Mr Jackson?

MR JACKSON: I am sorry, your Honour, page 260, about point 3:

In making the power of the Parliament of the Commonwealth to impose duties of customs and of excise exclusive it may be assumed that it was intended to give the Parliament a real control of the taxation of commodities and to ensure that the execution of whatever policy -

we would insert the words "in relation to the taxation of commodities" -

it adopted should not be hampered or defeated by State action.

Your Honours, there is not a word about tariff policy there.

DAWSON J: No, but there is a word about policy in the next sentence.

MR JACKSON: I am sorry, your Honour?

DAWSON J: It is the next sentence that is important as the justification.

MR JACKSON: Your Honour, yes, it is an observation made; but the point I am seeking to make, however - your Honour, I will come back to the passage because I want to way a few more things about it in a moment. What I am seeking to say about it, Your Honours, is that if one looks at this passage, if one looks at the passages that really lie behind it in Matthews, the observations made in relation to tariff policy are very few indeed. What one sees is that what is being dealt with is taxation and one sees only a few passing observations concerned with tariff policy, that seems to be really a later development.

DAWSON J: Yes, but that is because what his Honour seems to assume there is that there is something to be said for the fact that the taxation of commodities, so far as excise is concerned, cannot go past manufacture and production; but he says, "Having said what I have said that does not matter, because to tax it at another step, a later step, will have the same effect." That has been dispelled as being acceptable.

MR JACKSON: Yes, your Honour. What he is saying, however, is that - he says a tax on commodity, then he pointed to it. He is speaking about the - - -

DAWSON J: He was justifying what he said earlier by reference to that.

MR JACKSON: Your Honour, if he had put that sentence before, it would be exactly the same, in our submission.

DAWSON J: All I am saying is the justification for what he said is no longer a justification which is acceptable to most people.

MR JACKSON: Your Honour, may I come back to it. I do intend to come back to the passage. The point I am seeking to make at the moment, however, is that if one looks at what he said, he was talking about taxation policy.

DAWSON J: It is no longer a justification because the same can be said about any taxation, any imposition.

MR JACKSON: Your Honour, with respect, it cannot because, if you have a situation where - I am sorry, may I start again. What one has is the situation where by the operation of section 90 taxes of that kind - one has to, of course, define what the kind is to be - cannot be imposed by the States. It may be, of course - and Seamen's Union Case illustrates that perfectly clearly. It may be that many taxes which are imposed by States do have an effect in relation to the cost of goods. There is no doubt about that. One will accept that if one had a business that did nothing other than make goods of a particular kind, then a payroll tax in relation to the payroll of the persons who did that has a relationship to the cost of the goods. People would go broke in the end if things did not. At the same time what is denied to the States is taxes that are duties of excise and duties of customs, of course. It becomes a question in the end - - -

DAWSON J: You come back and you say what is the duty of excise? It is a tax on goods, and we go back into the old argument but you do not produce anything very satisfactory. It is open ended.

MR JACKSON: It is not really open ended, your Honour. It is a question in the end - - -

DAWSON J: It is if you take the justification that Justice Dixon posed. He said the reason why it is this way is because it finds its way back to manufacture and production and that must be because it is an indirect tax and finds its way back via the price. But that is not to confine it. It is to open it up to any number of taxes.

MR JACKSON: That takes one sentence of a judgment that is not a judgment that stands by itself because his Honour adopts the reasoning that he had in Matthews and Matthews goes through the history of it.

DAWSON J: Precisely, and what you get in the end is the criterion of liability test which then is found to be unsatisfactory, it is thrust to one side and you are into the wilderness again.

McHUGH J: Perhaps you are not necessarily. Is there any problem if you define an excise by saying it is a tax imposed in form or substance by reference to the volume, quantity, value or the nature of the goods?

MR JACKSON: Well, your Honour, it does not trouble me to do that, put it that way. What we say - - -

McHUGH J: If you talk about the nature of the goods, it covers a case like Hematite because it is imposed on the fact that - - -

MR JACKSON: Your Honour, Hematite is perhaps the case that - it is the blip in that, perhaps.

McHUGH J: Yes.

MR JACKSON: But what I was going to say was, what we say the test is is the test that was adopted one sees in Philip Morris at page 434, about three-quarters of the way down the page. Your Honour, I am going to come to that in a moment, or in a few moments, I should say, perhaps. But it is a test. It is a test perfectly capable of application, in our submission, and we will endeavour to demonstrate that. But, I have said, your Honours, not intending to be jocular, there are some paths through the wilderness, if there is a wilderness, and one can see that by working out what is a duty of excise. Now, your Honours, may I come to that a little later?

Your Honours, could I, before coming back to that passage in Parton, deal with one other feature which, in our submission, tells against the notion that section 90 is concerned only with tariff policy, and that is something that relates to bounties. Your Honours will see that the bounties of which section 90 speaks are not just bounties on the production of goods, but also bounties on the export of goods. Now, your Honours, no doubt a bounty on export of goods may be used to encourage production of those goods in the jurisdiction which grants the bounty, but bounties on export may be used to encourage other matters, for example, the use of the infrastructure of a State.

What I mean by this is this, your Honours; were it not for section 90, Queensland, for example, could say to the northern New South Wales sugar producers, "Export through the Brisbane Bulk Sugar Terminal and we will pay a bounty per tonne," the reason for the bounty being to improve the efficiency of the Brisbane terminal by giving it greater throughput - nothing to do with production of goods in Queensland. Again, if it were not for section 90, Queensland could offer bounties on export through Brisbane to the northern - could offer to the northern New South Wales beef and cotton producers bounties on export through Brisbane in order to obtain, for example, greater usage of the southern Queensland railway system.

Your Honours, those aspects of the operation of section 90 have nothing to do with tariff questions at all, nor with production. What we would submit is this, that if one looks at section 90 in the light of the matters to which we have referred, what one sees is a number of things. First, if I could put it shortly, to say that section 90 is there to enable tariff policy to be effective tells part but not all of the story. It leaves out of account that section 90 is there to give to the Commonwealth, unhampered by similar taxes by the States, access to a very significant revenue which was of course the principal source at Federation with income tax being, I suppose, a minor unpleasantness in four colonies and it did not exist in Queensland until 1902, New South Wales in 1907.

Your Honours, once World War I came of course, the scale of the conflict made reliance on customs and excise revenue inadequate - perhaps unreal in relation to customs - and other taxes had to be imposed, including dominantly the Commonwealth income tax in 1915. But your Honours will see, if one goes to the first volume of Commonwealth statutes, that Acts Nos 7, 8 and 9 of 1901 provided for excise on beer, spirits and tobacco, those substances which were said by two of the Justices in Philip Morris to be in a kind of special category, not appropriate to be regarded as the subjects of excise.

The second feature we would say is the one to which I have referred already. The exclusive power in relation to taxation by duties of customs and excise could be used to implement Commonwealth policies unrelated to tariff or free trade issues. Thirdly, the reference in section 90 to bounties on the export of goods indicates that the policies reflected in section 90 went beyond the prohibition of encouragement of production and manufacture in one State. Your Honours, I do not mean to convey at all that tariff and free trade or customs union considerations were irrelevant but, in our submission, they are not the only considerations. What we would submit is that the existence of those considerations suggests the substantial correctness of the dictum of Justice Dixon to which I referred a moment ago.

What may be seen - and I will come back to it in a second - from Matthews 60 CLR 263, at pages 291 to 303 in which the reasoning of Justice Dixon is set out is that there is only the most passing reference in that to questions of tariff rather than revenue policy. The relevant passage, your Honours, commences at page 291 and your Honours will see at the commencement of the last paragraph on 291 the commencement of the discussion about the meaning of "duties of excise".

Your Honours will then see that at page 292, and it is the first new paragraph, a reference to the provisions in the Constitution saying they are, in some respects, complementary or, at least, closely associated. Then, your Honours, 293, about point 6, he refers to the fact that the term "excise" had not produced any certain connotation. Your Honours will see then - - -

DAWSON J: Mr Jackson, at the risk of interrupting you unnecessarily, when you look at page 92, you see the way that his Honour was thinking, the penultimate paragraph. He really was relating excise to manufacture or production, but his view was then it had to be carried through because an imposition at a later stage had its effect on manufacture or production. That is the last sentence. That carries back to Parton again.

MR JACKSON: I am sorry, your Honour, page? Your Honour said the last sentence. I did not catch which page.

DAWSON J:

But these considerations scarcely supply a foundation for a logical inference that no duty is an excise unless it is levied immediately on the manufacture or production -

and what that is related to is the fact that an indirect tax finds its way back to the price of the goods and it is paid for by the consumer. He is all the time justifying it on this basis.

MR JACKSON: Your Honour, what he is really saying there is that the fact that the two have been treated as closely associated and the payment of excise on production and manufacture of goods is contemplated by the provisions, does not lead one to the view that nothing else is.

DAWSON J: Yes, because he is still talking about direct and indirect taxes.

MR JACKSON: Your Honour, I do not know, with respect, that at that point he is talking about that at all. What he had said - - -

DAWSON J: There would be no point in his reference to the fact that it was evidence:

that the payment of excise on the production and manufacture of goods is contemplated.

The point is that you now say, and it is not only you, others say, that, "Well, look, it's got nothing to do with production and manufacture. It's a tax on commodities". But that was not the way that Justice Dixon worked. He started at the point of it was a tax on production and manufacture and then extrapolated from that the reasons which are now discarded as being passant.

MR JACKSON: May I seek to persuade your Honour otherwise? What your Honour will see at page 291 where the discussion starts, is that he speaks - and this is the last paragraph on the page - he starts to deal with the meaning of the term "duties of excise". He had earlier been discussing the question whether there was a tax. Having got to that, it then became a question of characterisation of the nature of the imposition. In that regard, he proceeds, he says - and your Honour this is, if I may so submit with respect, an absolutely orthodox way to approach it - he says the term itself:

has caused some difficulty because of the very wide denotation of which it was capable.

The first place he goes, and the place your Honour has been urging upon my learned friends, is the Constitution; looks at the Constitution. Then on page 292 says, "Upon the face of these provisions", the passage to which - - -

DAWSON J: No, but read that sentence, Mr Jackson:

Upon the face of these provisions, it is evident that customs, excise and bounties on production and export are treated as complementary one to another, or, at least, closely associated, and that the payment of excise on the production and manufacture of goods is contemplated.

And then he goes on from there.

MR JACKSON: Yes, your Honour, indeed, but he is then posing the question in the last sentence of that paragraph and that is the question that he is posing which he then proceeds to arrive at an answer and, your Honour, in looking at the answer to that question, what he proceeds to do is to look at, if I may again so submit, in an absolutely orthodox way the type of things to which one would go to provide an answer to that question.

DAWSON J: Yes, but because of their effect on manufacture and production. Well, that is not the way you read it, but it is the way I read it.

McHUGH J: I think, Mr Jackson, you might get some support for your view at page 300 in the judgment.

MR JACKSON: Your Honour, may I say not just at page 300, with respect. Is your Honour referring to the part immediately under - - -

McHUGH J:

But I think that it should not be overlooked -

and then the reference:

What is decided is that to be an excise the tax must be imposed in respect of commodities.

MR JACKSON: Yes.

DAWSON J: You have got to read it in the light of the assumption which he made previously without any justification or any express justification, but perhaps there is not much point in going through it sentence by sentence.

McHUGH J: In a previous sentence, that long sentence, he says:

although it is levied not upon or in connection with production, manufacture or treatment of goods - - -

MR JACKSON: Your Honour, I do not intend to go through it sentence by sentence. What I am seeking to do is to demonstrate that it is not, if I may say so with respect, correct - - -

DAWSON J: No, it was I who was going through it sentence by sentence, not you.

MR JACKSON: Well, may I indicate, your Honour, where, in the passage that goes from page 291 through to page 303, one sees the few brief references to things that might be described as tariff questions. What your Honours will see, if I can just go back for a moment to page 292. I think I had gone from there to page 293. What I was seeking to do, your Honours, was to identify really in very much the outline the structure of the way in which his Honour went about it and what your Honours will see at about point 6 he refers to the absence of there being "any certain connotation" in relation to the word "excise". He then discusses the usages that there had been in England, then in the second half of page 294 Walpole's Excise Bill and your Honours will see then at page 295 about point 4, 34 year after Walpole's Excise Bill the reference in Lord Chesterfield "Miscellaneous Works" and there is at about point 6 on the page a definition of it:

"Directly opposite in its nature to this is the excise duty; which is an inland imposition, paid sometimes upon the consumption of the commodity, or frequently upon the retail sale, which is the last stage before the consumption.

Now, your Honours, if I could just pause in passing to say if that be the right view of the nature of excise that is used in the Constitution then, of course, the majority view in Capital Duplicators is supported by it. Your Honours, if one goes then to page 297, at the bottom of the page there is a reference to inland taxes being:

inland taxes directly levied upon goods, as opposed to customs duties upon imported goods.

There is the reference, your Honours, at page 298 about point 2 on the page to:

"Excise duties are charges upon commodities produced at home on their way to the consumer,

and then more to the point, the top of page 299 about the fourth or fifth line, his Honour refers to the fact that:

It was considered essential -

I think he is speaking of the economic material -

that the two correlative powers over customs and excise, properly so called, should run together and be exclusively vested in the Federal Parliament."

Your Honours, I am sorry, I am reading something, his Honour's quotation from part of Quick & Garran. Your Honours, then one sees, at page 301, point 2 on the page:

Customs and excise duties are, in their essence, trading taxes -

and so on.

GUMMOW J: It might be best to go to the bottom of page 302 to have a look at the destination.

MR JACKSON: Yes, as your Honour is correct in saying that is the conclusion that - - -

GUMMOW J: The reason why that that is the conclusion is that it is meeting the argument of Fullagar QC, the bottom of page 267, that this tax had "no reference to goods" and was not "a tax in respect of goods" because it was a tax on the amount of seed that was planted, not the product that was produced.

MR JACKSON: Yes, your Honour.

GUMMOW J: There it is. That is what Sir Owen Dixon is labouring to deny. "Labouring" might be an unfair word but - - -

MR JACKSON: Yes, your Honour. Your Honours will see - - -

GUMMOW J: That is his purpose.

MR JACKSON: Your Honour, that is the purpose in doing it. What he is looking at is something which is not really concerned with - if I could use the expression again shortly - any tariff question, but simply a question of what is the ambit of the power to tax exclusively given by section 90, and he adopts a perfectly traditional way of working it out.

GUMMOW J: No one was arguing anything about tariffs, from what I can see in Matthews.

MR JACKSON: There is nothing there, your Honour, no.

GUMMOW J: No.

MR JACKSON: Your Honours, if I could go then back to Parton 60 CLR 260 for just a moment, what your Honours will see is that what his Honour is talking about - if one looks at pages 258, 259 and 260, he is speaking about the power and control in relation to the taxation of commodities. Your Honours, the only reference, in effect, that one can find in relation to any kind of thing that might be brought into a tariff question is at page 259 when, at about point 6 on the page, he says:

it being a matter of indifference which of the parties ultimately bears the burden -

But, your Honours, that has really nothing to do with tariff as distinct from taxation.

May I say then a couple of other things in relation to the parts of Sir Owen Dixon's observations in that passage that have been the subject of particular comment, and they are, particularly, the reference to "it may be assumed" where he says that on the one hand, and on the other hand the reference to "formal significance". Your Honours, the reference to "it may be assumed", in our submission, is really no more than a reflection of the ordinary approach to the constitutional interpretation where his Honour is saying that in looking at the existence of section 90 in making the power of the Parliament to impose duties of customs and excise exclusive, it may be assumed what he is saying is that the provision, it may be assumed, is intended to have some effect, that is, intended to give it a real control of the taxation of commodities.

Your Honours, it is, in our submission, also a reflection of the notion that if one has a provision giving, by the Constitution, a power to a government, then that power is one which, if there is some doubt about it in the end, is to be interpreted,given the broader rather than narrower meaning. Your Honours, the relevant test in that regard can be seen in the judgment of the Court in Reg v Coldham Ex parte Australian Social Welfare Union [1983] HCA 19; (1983) 153 CLR 297, at page 314, where the passage from Justice O'Connor in Jumbunna is adopted. Your Honours will see the first new paragraph on the page:

The conclusion which we have reached is in conformity with the accepted canons of constitutional construction.

Your Honours, I will not read out the passage, of course, but we would refer particularly to the last paragraph of the passage quoted:

the Court should, in my opinion, always lean to the broader interpretation -

et cetera. That passage, of course, your Honours, has been referred to on a number of occasions including,if I can give your Honours just one reference, The Tasmanian Dams Case, The Commonwealth v Tasmania 158 CLR 1, at page 127 to 128 by Justice Mason, and pages 220 to 221 by your Honour the Chief Justice.

Your Honours, the second thing we would say, or the thing we would say in relation to the use of the expression "have only a formal significance" is this, that what that reflects, in our submission, or what his Honour's observation reflects, in our submission, is the notion that it is not permissible to do indirectly what is prohibited directly.

Could we, in that regard, your Honours, give your Honours two references; one is to the joint judgment of Chief Justice Mason and Justices Gaudron and McHugh in Caltex Oil (Aust) Pty Ltd v Best [1990] HCA 53; 170 CLR 516, at pages 522 to 523, the last paragraph on page 522:

The principle that it is not permissible to do indirectly what is prohibited directly, which is expressed in the maxim -

and, your Honours, I will not try to read it out -

is a more traditional general statement of the same proposition. It has been acknowledged that, in conformity with this principle, the adoption of a circuitous device with a view to avoiding the need to comply with a constitutional requirement will be of no avail.

A similar observation can be seen in the joint reasons of Chief Justice Mason and Justices Deane and Gaudron in Georgiadis v The Australian Overseas Telecommunications Corporation 179 CLR, at page 305. Your Honours, that, in our submission, is what is being reflected by the reference to "having only a formal significance" in his Honour's reasons.

Your Honours, if I could pause at this point, our submission is that the considerations to which I have referred are against the proposition that there should be either a very literal interpretation given to section 90 or that its terms should be restricted to the duties which were made exigible as duties of excise in the colonies prior to Federation.

Could I move from that to a matter concerning the Dennis Hotels line of cases. What we would say, your Honours, is that we have now arrived at a situation where at Federation excise duties on alcohol and tobacco formed the major part of the revenue of the colonies. The Constitution provided that the power to impose such duties would pass to the Commonwealth and that it would be exclusive to it. The States would have no such power. Yet 96 years on, what does one find? The States have, as one of their main sources of revenue from taxation, duties on alcohol and tobacco. The duties are calculated by reference to value and quantity. They are payable by the manufacturer unless the manufacturer sells to a person who becomes liable to pay but they are not duties of excise because they are described as licence fees and calculated by reference to past sales of a short time before.

Your Honours, that is an odd distinction in a constitutional setting, if I could use the expression of your Honours Justices Toohey and Gaudron in Philip Morris [1989] HCA 38; 167 CLR 399. To support that notion is the proposition in part that alcohol and tobacco are somehow in a different category. If one looks at what the taxes were immediately before Federation, what the excise duties were immediately after Federation or very closely after Federation, they were on alcohol and tobacco principally. It seems, if I say so with respect, a rather bizarre result that the view that alcohol and tobacco stand in some separate category now supports the notion for having duties on them which in any other respect, in our submission, would be a duty of excise. The time has come, if that is all the cases are supported by, to overrule the Dickenson's Arcade, Dennis Hotels line of cases.

Your Honours, if I could go then to a further question which arises, in our submission. One comes ultimately to endeavour to answer the question: what was the meaning of duties of excise at the time of Federation? To put it in another way, were such duties in Australia limited to duties upon production or manufacture in the jurisdiction?

Your Honours, if that issue had arisen at the time of Federation in the then self-governing colonies, as indeed it might have if there had been a constitutional provision in a State Constitution such as a no tacking provision like section 55, or if there had been a provision requiring an approval of the majority of votes for, say, a new duty of excise or a new tax, then if there had been such a provision and an issue had arisen in relation to compliance with it, it would have been necessary then to identify what was a duty of excise. It was clear, in our submission, at that time that the meaning of the term "excise" in Australia was not settled and that there were various sources to which one might go in order to gain some insight into the meaning.

First, one might go to the legislative practice that had been so far adopted. That would tell one that the duties on goods which had been so far imposed were duties on production or manufacture. It would tell you too that the duties which were imposed were imposed either completely or almost completely by reference to the volume or quantity produced. But it would not tell one any more than that. In particular it would not tell one what the States seek to derive from it, namely, that licence fees of the kind now sought to be imposed were then not treated as duties of excise but were rather treated as licence fees different in kind from duties of excise. It would not tell one that because, as we sought to demonstrate in the document which we handed up during argument in-chief, the present enactments combine two things that were provided for in colonial days. One, the licence fee which was usually a flat fee equivalent to $10 in this case and, secondly, excise duties in the ordinary sense of the term. Your Honours, it is quite wrong, in our submission, to treat the combination that one now sees as being the same as the old licence fee.

McHUGH J: But in any event, having regard to the English practice, it seems almost certain that if this sort of tax had been imposed in 1899 it would have been regarded as an excise. Even though it was regarded as a licence, it was still - - -

MR JACKSON: Indeed, your Honour, I am going to come on to that in just a moment. What I was seeking to say was that if you went to the first source, namely, what the legislative practice had been, what it would tell you would be that there had been excises imposed which were duties on production or manufacture. It would not tell you any more than that really. It would not exclude the negatives or exclude the other possibilities. It would just tell you that they were the duties imposed so far.

Your Honours, I mentioned that one could see the types of taxes imposed, and I will not take your Honours to it, but in the South Australian materials, in volume 3, at page 7, you will see the excise, on the one hand, followed by the licence fee. Now, your Honours, if one then sought to go further to identify what was a duty of excise, the next place one would go, in the ordinary course of events, in our submission, would be to the two great, in the view of the time, jurisdictions from which the colonies were drawing their inspiration. If one did, one could see that the concept of duties of excise was rather wider than that which had been so far adopted as legislative practice.

What one would see would be, if one went to that, that taxes described as "duties of excise" fell into two broad categories; first of all, duties imposed on persons producing or dealing in goods and, secondly, licence fees imposed on persons engaged in a miscellaneous range of occupations which might or might not have something to do with goods. Auctioneers presumably sell goods, but other people who are the subject of licences - treated as excise licences in England - did not.

Could I go, first, your Honours, to what one would see in the United Kingdom? If one goes to the usage in Blackstone's Commentary, Volume 1, pages 308 to 310 and, in particular, your Honours, the top of page 308, your Honours will see at the top of the page:

Directly opposite in it's nature to this is the excise duty; which is an inland imposition, paid sometimes upon the consumption of the commodity, or frequently upon the retail sale, which is the last stage before the consumption.

Now, your Honours, that is a reference to what is the excise duty, inland imposition paid sometimes upon the consumption, frequently upon the retail sale. Your Honours, if one went to Stephen's Commentaries - and I take your Honours to a slightly earlier edition than is in the materials that your Honours have. Your Honours have, in volume 4 of the South Australia materials, at page 29, a post-Federation Stephen's commentary. The one I have given your Honours is volume 2, the 1858 edition. I was going to take your Honours to page 573, at the bottom of the page, next to the No 3 it says:

The excise duty is an inland imposition upon commodities charged, in most cases, on the manufacturer.

Leaving open, of course, the possibility of it, in particular cases, being charged on other people. Your Honours, if I could just take your Honours to another source, one sees the Encyclopaedia Britannica and the Concise Oxford Dictionary referred to by Justice Dixon - and perhaps I could take your Honours to that as the quickest reference - in Matthews 60 CLR 298 at about point 3 on the page the quotation:

"Excise duties are charges upon commodities produced at home on their way to the consumer -

And then, halfway down the page, the extract from the Concise Oxford:

"Duty charged on home goods during manufacture, or before sale to home consumers."

Your Honours, that is what one would have seen. Really, if one goes to the extract to Quick and Garran, one sees something similar. Could I in that regard take your Honours to the reference which is in volume 4 of the South Australian materials at page 197. The point that I seek to make out of this, if I could just say something about it first, your Honours, is this, that what undoubtedly, in our submission, would not fall within the concept of duties of excise are the miscellany of licences that came to be ones for which licence fees were collected, a sort of grab-bag of things, in the United Kingdom by the Commissioners of Excise.

What your Honours will see from this passage is that there were three classes which are there referred to. What your Honours will see under the heading "Duties of Excise" is this. The second line under that heading indicates when the duties were first introduced in England. It says in the fourth line:

These duties consisted of charges on beer, ale, cider, cherry wine and tobacco -

Then it indicates the additional list then a few lines further on:

The basic principle of excise duties was that they were taxes on the production and manufacture of articles which could not be taxed through the customs house, and revenue derived from that source is called excise revenue proper.

Then comes the second class to which he refers:

In the course of time licenses were required from the makers of and the dealers in excisable commodities -

Your Honours will see the reference to "the dealers in excisable commodities":

and these license fees acquired the name of "duties of excise." The next step was to require persons to take out licenses -

And your Honours will then see what I inelegantly described as the "grab-bag" following. What one sees in Peterswald v Bartley is that the last group were the ones that were held not to fall within the concept of duties of excise and, your Honours, one can readily understand why that would be so.

Your Honours, if that is one of the jurisdictions one might have gone to at that time, if one had gone to the other jurisdiction that was providing some inspiration for Australians at the time, one might have gone to the United States - - -

DAWSON J: But, you see, you ignored the second sentence of the last paragraph. Be this as it may, the fundamental conception of an excise, the term, is that of a tax on articles produced or manufactured in the country.

MR JACKSON: Your Honour, that is not - - -

DAWSON J: That is a commentator at the time.

MR JACKSON: Yes, but if your Honour reads a little further on down the page, to the fifth-last line on the page, what he says is:

It was never intended to take from the States those miscellaneous sources of revenue, improperly designated as "excise licenses" in British legislation.

That is the third category, your Honours, not the second.

Your Honours, what I was going to say was that a similar situation would have appeared if one went to the United States, and that is demonstrated, your Honours, in our submission, by two decisions, one before and one after Federation. The one before is Pacific Insurance Company v Soule [1868] USSC 76; 74 US 433, at page 445 in the the judgment of the Court. Your Honours will see the first new paragraph on page 445, their Honours say:

The views expressed in this case are adopted by Chancellor Kent and Justice Story, in their examination of the subject.*

Your Honours will see the asterisk at the bottom of the page. Then the last paragraph on the page says this:

Excise is defined to be an inland imposition, sometimes upon the consumption of the commodity, and sometimes upon the retail sale; sometimes upon the manufacturer, and sometimes upon the vendor.

If one looks, your Honours, to see where all that came from, looks to the bottom of the page, amongst other things one sees Blackstone's Commentary, page 318, which is the reference I gave your Honours before.

Your Honours, the second case is Patton v Brady (1902) 184 US 605, and in the opinion of the Court, your Honours, at page 615, the second-last paragraph on the page, their Honours say:

We pass, therefore, to consider the merits of the case, and here the first question is, what is the nature of the tax? Obviously it was intended by Congress as an excise.

Then on the next page your Honours will see that halfway down the page, there is a reference to section 3 of the Act:

to provide ways and means to meet the expenditures of the Spanish- American War.

And section 3 was:

a tax of twelve cents per pound upon all tobacco and snuff, however prepared, manufactured and sold, for consumption or sale -

and there was an additional tax, which your Honours will see, set out in the last four lines of the next paragraph.

Your Honours, in coming to the reasoning of the Court on the question of excise, what your Honours will see at page 617 in the fifth line on the page, is that their Honours say that:

Ever since the early part of the civil war there has been a body of legislation, gathered in the statutes under the title Internal Revenue, by which, upon goods intended for consumption, excises have been imposed in different forms at some time intermediate the beginning of manufacture or production and the act of consumption.

They refer in the next line to that being liquors and tobacco, but then, your Honours, towards the end of that paragraph, about point 7 on page 617, they say:

It may be that all the taxes enumerated in these various statutes were not excises, but the great body of them, including the tax on tobacco, were plainly excises within any accepted definition of the term.

The first place they go: Blackstone, volume 1, page 318:

"An inland imposition, paid sometimes upon the consumption of the commodity, or frequently upon the retail sale, which is the last stage before the consumption."

They refer to the fact that Story accepted that in his work and then quote Cooley, in the last four lines on the page:

"an inland impost levied upon articles of manufacture or sale" -

then, your Honours, the top of the next page, a reference to Webster's International Dictionary. Then about point 2 on the page, the Century Dictionary, quoting from Andrews on Revenue Law were:

"generally used in contradistinction to imposts in its restricted sense, and is applied to internal or inland impositions, levied sometimes upon the consumption of a commodity, sometimes upon the retail sale of it, and sometimes upon the manufacture of it."

Then your Honours will see about point 5 on the page, they describe the operation of the tax in the particular case and say:

The tax on manufactured tobacco is a tax on an article manufactured for consumption, and imposed at a period intermediate the commencement of manufacture and the final consumption of the article.

It is practically conceded by one counsel for plaintiff in error that this is an excise tax.

Then they quote from some of the submissions referring to the Encyclopaedia Britannica and your Honours will see at page 619, about point 4 on the page, they say:

We conclude, therefore, that the tax which is levied by this act is an excise, properly so called,

and, your Honours, at page 623 about point 7 on the page they say:

Within the scope of the various definitions we have quoted there can be no doubt that the power to excise continues while the consumable articles are in the hands of the manufacturer or any intermediate dealer, and until they reach the consumer.

Now, your Honours - - -

BRENNAN CJ: What volume is that, Mr Jackson?

MR JACKSON: I am sorry, your Honour. It is 184 United States Reports, your Honour. Now, what one sees, in our submission, is that if one goes to those sources what they demonstrate is that there was an understanding of the term "excise" in both the United States and the United Kingdom which clearly included taxes of the kind presently in question.

DAWSON J: But there is no doubt about that and I wonder why you are labouring this point. Mr Isaacs pointed that out in the very convention debates.

MR JACKSON: Your Honour, if I could say - I am sorry, I do not mean to be facetious - I am about to come to that in just a moment, but what one sees when one looks at what happened in the convention debates is that it was recognised, as your Honour says, that the term was capable of having a number of meanings but what was done by the delegates at the convention was to accept ultimately in effect that the meaning would be the one that the Court attributed to it or the meaning that would be attributed to it when the issue no doubt in litigation in this Court and, your Honour, in dealing with that one looks to see what the sources would say.

Now, your Honours, could we also say that whilst the excises that had been duties of excise to that point had been imposed in the Australian colonies were duties on production or manufacture, there was nothing at that point to suggest that the usages to date would exhaust the concept. Your Honours, some of the colonies were very young and if one takes, for example, Queensland, it only achieved self-government in 1859 and less time had elapsed between then and the time of Federation than has elapsed since Parton.

Your Honours, could I move then to the materials, and I will do so very briefly, that were at the conventions and, as your Honour put to me, it was recognised that the term excise was inherently capable of a number of meanings, but the convention did not in the end choose one and could I take your Honours to the Western Australian large book and to tab 20. Your Honours will see at the page numbered 346 that Mr Adye Douglas in the right column said, rightly or wrongly, that:

In different colonies the word is interpreted in different ways.

Your Honours will also see, if one goes then to page 349, two pages over, about halfway down the page Mr Donaldson says:

suppose the parliament were to go a little further, it might possibly put an excise duty upon sugar -

well, events proved him correct -

and, as far as I know, there is only one colony in this group at the preset time which grows sugar.

Mr. GORDON: Excise would include licenses!

.....

Mr. DONALDSON: I believe an excise would also include a stamp duty. I should like to have this fully considered.

That resulted, your Honours, at page 361 in the bottom of the right- hand column to the proposition that there be some limitation on duties of - I am sorry, your Honours, that there be added the words:

"and duties of excise upon goods the subject of customs duties."

Your Honours, if one goes from there to page 367, bottom of page 367 to the top of page 368 there was an urging not to run away from the question but to try to resolve it. It did not happen, of course. Then from there, your Honours, one goes to the 1897 connection. That is tab 22 in the same book at page 1065. Your Honours will see in the right column the observation of Sir Isaac Isaacs that:

At the present day -

this is at about point 3 on the day:

the word "excise" has a very much wider meaning than we intend in this bill -

and he referred to the various licences, the last category, and then a little further down the page he says:

The word is variously defined in standard dictionaries. We should give attention to this matter so as not to be carried further than we intend to go. In modern times, excise is used as a very wide term.

Then there is a reference at the bottom of the page by Sir Edmund Barton to the word "excise" being used and the way in which it was used in the United States. Then there is a reference your Honours will see. I will not go through it, in the left column on page 1066. A further discussion about it. Your Honours will see then at page 1067, towards the top of the page there was a discussion in the right-hand column, a discussion by Sir Edmund Barton of the question whether - he said:

I think we may promise that we will see if there is any necessity to give any definition of the meaning of the word "excise".

Your Honours will see then a discussion of that which goes through to the end of the page and particularly about point 9 on the page:

I am rather of the opinion that the use of the word as it occurs in this bill will be held to carry with it the same meaning.

No definition ever came. Nothing to indicate that the word was not to be used in the sense that the Court ultimately gave it apart from the view of Sir Isaac Isaacs as a delegate at the convention.

Your Honours, it is hardly surprising in those circumstances, in our submission, that when the issue came before the Court in the Commonwealth v South Australia 38 CLR the possibility of the wider view was recognised.

Your Honours, I say when it came before the Court on that occasion, because what your Honours will recall was that the legislation that was in question in Peterswald v Bartley was not legislation of the kind presently in question, nor was it legislation which did more than impose a licence fee, a licence fee in a flat sum, and it was in fact nothing to do with any kind of - sorry, I will start again. It was not a licence fee which could be described as being in any way itself based on quantities of production or anything of that kind.

The issue which is closer to the one with which the Court is presently concerned really first arose when The Commonwealth v South Australia was before the Court in 38 CLR. It is on that occasion, your Honours, that the possibility of the wider view was recognised judicially, and your Honours will see that in Justice Higgins at page 435. Your Honours will see it goes through the whole page, but may I refer particularly to about point 4 where he says:

I take it that, whatever may be the differences in English and in American usage -

and the passage goes through that paragraph. Your Honours will see the reference, amongst other things, to Patton v Brady, and also Justice Rich at page 437, about halfway down the page and a little further on. One sees it again in John Fairfax & Sons v New South Wales in [1927] HCA 3; 39 CLR 139 at page 143 through to page 144, and it is again Justice Higgins. It is really the whole of his Honour's reasons for judgment, and your Honours will see particularly the reference, about halfway down page 144.

Your Honours, at page 146, again Justice Rich, in his short reasons where he said, about point 7 on the page:

I considered that the expression was not restricted in its denotation to duties upon or in respect of goods of local production but comprised inland duties upon or in respect of goods wherever produced.

He describes the nature of an excise duty as including an inland imposition sometimes on the retail sale. A growing number of references to the wider view can be seen, if one goes then to the Attorney-General v Homebush Flour Mills Case [1937] HCA 3; 56 CLR 390. At page 401 about point 2 on the page he there refers to:

But a tax payable on the occasion of the sale of goods is also an internal revenue duty by way of indirect taxation amounting to an excise duty.

Your Honours, at page 402 about point 9 to about point 6 on page 403, Justice Rich, and at page 408 Justice Starke, having referred to Peterswald v Bartley about point 4, then proceeded to say about point 6 or 7 on the page:

But upon the true construction of the legislation there involved, the court held that it did not impose any liability -

et cetera. What your Honours will see is that he regarded the imposition in the particular case as being a duty of excise and your Honours will see particularly that he - perhaps I have the wrong reference in relation to that. Perhaps I can give it to your Honours tomorrow. If your Honours go to page 421, at the bottom of that page Justice McTiernan said:

The occasion for levying the liability created by the Act on a miller or any person exercising the power to sell any flour is the sale of such flour. In my opinion the liability is therefore an excise tax on flour.

Your Honours will see particularly that he referred to a miller or any person exercising the power to sell is the sale of such flour. So that was an excise. Your Honours, it is really from there that one would go to Matthews v Chicory Marketing Board. Your Honours, would this be a convenient time? I expect to be about half an hour.

BRENNAN CJ: Thank you, Mr Jackson. The Court will adjourn until 10.00 o'clock tomorrow.

AT 4.16 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 19 MARCH 1997