Taylor swept by into the lead taking both Smiths in a single lap, before his gearbox problem again hampered his progress.
Setting a hot pace at the front, Smith fended off his namesake in the MARC Cars Australia entry before the recovering Taylor once again found a way into top spot.
The Audi then remained in contact with Taylor at the front until the flag making for an agonising final few minutes for the GT Motorsport ace.
Finally, after 31 laps of green flag racing, the pair were split by half a second with Jack Smith finishing third on road and first in the MARC Class after a sensational drive.
Taylor's two wins saw the Audi driver take out the round, while two consistent races from Stephen Grove saw the Grove Hire Porsche 911 GT3 Cup Car second and Rob Smith's superb Race 2 effort helping him secure third place for in Trophy Class for the round.
MARC Cars Australia team boss Ryan McLeod partnered with Keith Kassulke to record a fine third place, to duo having been locked in combat with team-mate Jake Camilleri for much of Race 2.
Camilleri claimed second for the round, Jack Smith dominating the class all weekend with the fastest time in qualifying and two class victories.
A stand out performance from Adrian Flack in the opening stint of Race 2 saw the Safe-T-Stop Porsche 911 GT3 Cup Car he shared with Richard Gartner embroiled in a four-way battle for third place in the opening stages.
Garnter crossed the line eighth at the flag, backing up the duo's seventh place in the opening race to seal victory in the Challenge Class.
Scott Hookey ended the weekend second in class in his Ferrari 458 Challenge while Brendan Cook and Ockert Fourie battled through to record a solid podium result.
The result sees Taylor extend his Trophy Series lead by 49-points over Rob Smith, while Jack Smith has made inroads into Jake Camilleri's heft advantage in the MARC Class with Ockert Fourie remaining in control of the Challenge class.
The CAMS Australian GT Trophy Series presented by Pirelli now heads to Queensland Raceway for Round 4 of the series on July 29-31.