Commissioners of Inland Revenue v Saxone, Lilley & Skinner (Holdings) Ltd

JurisdictionEngland & Wales
JudgeLord Reid,Lord Morris of Borth-y-Gest,Lord Hodson,Lord Pearce,Lord Upjohn
Judgment Date16 February 1967
Judgment citation (vLex)[1967] UKHL J0216-2
CourtHouse of Lords
Docket NumberNo. 1.
Date16 February 1967
Commissioners of Inland Revenue
and
Saxone, Lilley & Skinner (Holdings) Limited

[1967] UKHL J0216-2

Lord Reid

Lord Morris of Borth-y-Gest

Lord Hodson

Lord Pearce

Lord Upjohn

House of Lords

After hearing Counsel on Wednesday the 11th day of January last, upon the Petition and Appeal of the Commissioners of Inland Revenue, of Somerset House, Strand, London, W.C.2, praying, That the matter of the Interlocutor set forth in the Schedule thereto, namely, an Interlocutor of the Lords of Session in Scotland of the First Division, sitting as the Court of Exchequer, of the 17th of February 1966, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutor might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Saxone, Lilley & Skinner (Holdings) Ltd., lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Interlocutor of the Lords of Session in Scotland of the First Division, sitting as the Court of Exchequer, of the 17th day of February 1966, complained of in the said Appeal, be, and the same is, hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the party entitled to the same within one calendar month from the date of the Certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Judge acting as Vacation Judge, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary.

Lord Reid

My Lords,

1

The Respondents have a number of subsidiary companies which manufacture and retail shoes. This group of companies have a large number of retail shops in various parts of Britain which sell both shoes made by one of the group at Kilmarnock and shoes bought from manufacturers outside the group. The Respondents have found it convenient to have a single large warehouse in Leeds to which all their shoes are brought. They are then stored there until sent out to the retail shops. The question in this case is whether that warehouse in an industrial building within the meaning of section 271 of the Income Tax Act 1952. If it is the Respondents are entitled to initial allowances, investment allowances, and annual allowances under that Act. The Special Commissioners rejected claims for these allowances, but the First Division on 17th February 1966 allowed an appeal against this decision.

2

The relevant parts of section 271 are:

"271(1) Subject to the provisions of this section, in this Chapter, 'industrial building or structure ' means a building or structure in use—

( a) for the purposes of a trade carried on in a mill, factory or other similar premises; or

( b) for the purposes of a transport, dock, inland navigation, water, electricity hydraulic power, tunnel or bridge undertaking; or

( c) for the purposes of a trade which consists in the manufacture of goods or materials or the subjection of goods or materials to any process; or

( d) for the purposes of a trade which consists in the storage—

(i) of goods or materials which are to be used in the manufacture of other goods or materials; or

(ii) of goods or materials which are to be subjected, in the course of a trade, to any process; or

(iii) of goods or materials which, having been manufactured or produced or subjected, in the course of a trade, to any process, have not yet been delivered to any purchaser; or

(iv) of goods or materials on their arrival by sea or air into any part of the United Kingdom; or

( e) for the purposes of a trade which consists in the working of any mine, oil well or other source of mineral deposits, or of a foreign plantation; or

( f) for the purposes of a trade consisting in all or any of the following activities, that is to say, ploughing or cultivating land (other than land in the occupation of the person carrying on the...

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