Macquarie Bank's application for leave to appeal against the Federal Court decision in its offshore banking unit case has been dismissed.The decision clears the way for the Commissioner of Taxation to, in Macquarie's view, adopt a new method of determining tax liabilities flowing from the allocation of expenses in the company's offshore banking units.Macquarie had, since 2004, relied on a method approved by the Australian Taxation Office.In 2011, the ATO declared, in Practice Statement 2011-27, that the commissioner would not retrospectively change his acceptance of any method used by the industry.In 2012, the commissioner indicated that the ATO intended to assess Macquarie using a different method, and this would be retrospective to 2006.Macquarie believed this contradicted the 2011 Practice Statement.Brett Walker, counsel for Macquarie, had argued that the ATO proposed to assess the company using its new view of the law, both in future and retrospectively, without acting in accordance with the Practice Statement.The commissioner had the discretion to not reassess earlier tax treatments, and, Macquarie argued, the commissioner should have used that discretion not to reassess.Justices John Middleton, Tony Pagone and Jennifer Davies, found that the original decision made by Justice Richard Edmonds that the Practice Statement could not prevent the ATO applying its view of the law was correct.The justices said in their reasoning: "In our view, the learned primary judge was correct in his conclusion… dismissing Macquarie's application summarily under S31A of the Federal Court of Australia Act 1976 that 'in the light of the limited scope of operation' of the Practice Statement the final relief sought by Macquarie 'either does not lie or has no utility'." They said that, while it may be argued that the commissioner's power of general administration gives him some discretion, it does not give him the discretion to withhold an assessment when he believes there is a liability, even though, under an earlier view, there as none."His duty then is to apply the law as he understands it to be," the judges said.