Commissioner of Taxation v Reliance Carpet Co Pty Ltd

HIGH COURT OF AUSTRALIAGLEESON CJGUMMOW, HEYDON, CRENNAN AND KIEFEL JJTHE COMMISSIONER OF TAXATION OF THECOMMONWEALTH OF AUSTRALIA  APPELLANTANDRELIANCE CARPET CO PTY LIMITED   RESPONDENTCommissioner of Taxation v Reliance Carpet Co Pty Limited [2008] HCA 2222 May 2008M163/2007ORDER1.        Appeal allowed.2.Set aside orders 1 and 2 of the orders of the Full Court of the Federal Court of Australia dated 5 July 2007 and, in their place, order that the appeal to that Court be dismissed.3.The appellant pay the costs of the respondent.On appeal from the Federal Court of AustraliaRepresentationA Robertson SC with J O Hmelnitsky for the appellant (instructed by Australian Government Solicitor)J J Batrouney SC with C M Sievers for the respondent (instructed by Ambry Legal)Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.CATCHWORDSCommissioner of Taxation v Reliance Carpet Co Pty LimitedTaxes and duties – Goods and services tax – Taxable supply – A New Tax System (Goods and Services Tax) Act 1999 (Cth) ("the Act"), s 9-10 – Contract for sale of land – Whether there is a taxable supply when a deposit held as security for the performance of a purchaser's obligations is forfeited for failure by the purchaser to perform its obligations.Vendor and purchaser – Deposit – Characteristics of deposit – Whether payment of deposit was "in connection with a supply" by vendor taxpayer for the purpose of s 9-15(1) of the Act – Whether forfeited deposit treated as consideration for a supply under s...