$1 Australia Bank Note

Banknotes generally aren't "cancelled" by banks. They might get withdrawn if they are obsolete or damaged, but such withdrawn notes would not receive a stamp, they'd just get bagged up and sent to the RBA.

Bank branches did used to have ink-stamps in them, for stamping deposit forms and such. I suspect such a stamp was used on your note, either deliberately or accidentally, but against normal bank practice.

to the Community!

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I used to work in a Bank back in the 1970's and it looks like a ordinary Bank Branch stamp used for cancelling cheques etc.
Probably a bored Teller, we never touched Mutes,they were just put in a bag to be returned to a cental Branch where they were returned to the RBA.

Yes,Teller with too much time on his hands,looks like a standard bank branch stamp,used to stamp cheques and when you made a deposit in the old passbook accounts.
It seems to be from the National Australia Bank in Shepparton Vict., I couldn't see a date.