[2] Some of the laws were justified under the defence power, but the scheme was not dismantled after the end of wartime conflict.

The decision in the First Uniform Tax case was overruled in relation to section 221 of the Income Assessment Act 1942.

The majority (Dixon CJ, McTiernan, Kitto and Taylor JJ) thought that it was not pursuant to the taxation power.

Dixon CJ held that it could only possibly be a valid exercise of the implied incidental taxation power.

Although this section was challenged and overturned, it was not important because in a practical sense the states could no longer impose income taxes.

The power to attach conditions to section 96 grants is broad but they must be within the state's constitutional competence to fulfil.