Commissioners of Inland Revenue v Forth Conservancy Board
| Jurisdiction | UK Non-devolved |
| Judge | Lord Buckmaster,Viscount Dunedin,Lord Warrington of Clyffe,Lord Thankerton,Lord Russell of Killowen,. |
| Judgment Date | 11 May 1931 |
| Judgment citation (vLex) | [1928] UKHL J1122-1 |
| Docket Number | No. 1.,No. 9. |
| Court | House of Lords |
| Date | 11 May 1931 |
[1928] UKHL J1122-1
House of Lords
Lord Buckmaster.
Viscount Dunedin.
Lord Phillimore.
After hearing Counsel, as well on Thursday the 28th, as on Friday the 29th, days of June last, upon the Petition and Appeal of The Commissioners of Inland Revenue of Somerset House, Strand, in the County of London, 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 22d of December, 1927, might be reviewed before His Majesty the King, in His 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 His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the Forth Conservancy Board 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 His Majesty the King assembled, That the said Interlocutor of the 22d day of December, 1927, 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 parties 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 Lord Ordinary officiating on the Bills during the Vacation, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary.
My Lords,
The only question on this Appeal is whether the Respondents, the Forth Conservancy Board, have been lawfully assessed to Income Tax under Schedule A, No. III, Rule 3 of the Income Tax Act, 1918. The Commissioners of Inland Revenue have deliberately elected to base their claim on this narrow foundation, and the matter for determination is whether the foundation is broad enough to support the claim.
The Special Commissioners found that the Respondents were not so assessable and their Lordships of the First Division dismissed the Appeal to them against this decision. The Commissioners of Inland Revenue have accordingly appealed to your Lordships' House.
The Respondent Board was constituted by The Forth Conservancy Confirmation Act, 1921, and by this Act there was transferred to them the undertaking of the Commissioners of the Forth Navigation constituted by the Forth Navigation Act, 1843. The main purpose of this Act was to improve the navigation of the river from Alloa to Stirling so as to facilitate vessels reaching and using the quay and harbour of the Royal Burgh of Stirling and by it power was given to levy rates and dues on ships, goods and passengers above the island of Alloa, such dues to be in lieu of the charges formerly made by the Provost, Magistrates and Town Council of Stirling, powers were also given to purchase land, construct works and place lights and tugs within the limit of the Commissioners' jurisdiction.
The powers of the Commissioners were extended by the Forth Navigation Order Confirmation Act of 1903, and a new schedule of rates provided. The provisions of this Act need no special examination. Under the Act of 1921, the limits of the original jurisdiction were extended down the river and more extensive powers were conferred upon the Respondent Board than those formerly possessed by the Commissioners. Power was given to purchase land, to construct works, to dredge the river, to alter and improve the Channel, to make and maintain sea walls and embankments, to provide tugs, to acquire quarries for use in connection with the authorised work, and other similar matters, and authority was also conferred to levy rates and dues in respect of vessels entering and using the river and in respect of goods and passengers conveyed upon or shipped or unshipped within defined limits. An extended area of jurisdiction was conferred and within that area rates were authorised only upon vessels. The application of the revenue is unnecessary for the purposes of this Appeal; it was in respect of the balances of income derived by the Respondent Board under these powers that assessments were made upon them under Schedule A. Schedule A provides that "tax shall be charged in respect "of the property in all lands tenements hereditaments and heritages in the United Kingdom for every twenty shillings of the annual value thereof," and rules are laid down for estimating the annual value of the lands etc. to be so charged.
Rules 1 and 2 are not important. It is under Rule 3 that the difficulty arises. This is headed:
"Rules for estimating the annual value of certain other Lands, Tenements, Hereditaments, or Heritages which are not to be charged according to the preceding General Rule,"
and Sub-head 3 of that Rule is in the following terms:
"In the case of ironworks, gasworks, salt springs or works, alum mines or works, water works, streams of water, canals, inland navigations, docks, drains or levels, fishings, rights of markets and fairs, tolls, railways and other ways, bridges, ferries, and other concerns of the like nature having profits from or arising out of any lands, tenements, hereditaments or heritages, the annual value shall be understood to be the profits of the preceding year."
The argument for the Appellants is that according to the true interpretation of Rule 3 there are to be included profits arising from property, most notably tolls, and ferries, which are not necessarily within the strict meaning of the words "property in lands, tenements, hereditaments or heritages," and that therefore the controlling words must be so extended as to cover this meaning and thereby to embrace the money arising from the dues and rates which the Respondent Board are entitled to levy.
I have omitted from consideration the other classes of property such as "streams of water, canals, etc." since for the reasons given by the Lord President they are all easily capable of being made referable to property in lands and heritages and the word tolls is the one most favourable to the Appellants.
Before however examining what is the nature of the property in respect of which the income to the Respondent Board arises, it is important to determine strictly the construction of the heading of Schedule A itself. It must be remembered that it is simply one schedule in a general taxing Act. It does not follow because property is not included under this Rule that it is exempt from taxation. It may well be included under other Rules and there is no particular reason why an extended interpretation should be given to the illustration of properties subject to the charge contained in the third sub-head. Further the rule itself shows that all the property included in subhead 3 is assumed to be such examples of the enumerated items as have "profits arising out of lands, tenements, hereditaments and heritages," for otherwise there would be introduced into the middle of the rule a class of property outside the description of the special subject of taxation and contrary to the general words which embrace properties omitted from the specific enumeration but unite them together by the provision that they come within the declared objects of the tax. The primary and governing consideration of the Schedule is that taxes should be levied "in respect of the property in lands, tenements, hereditaments or heritages," and tolls may well arise in connection with such property as, for example, in connection with a harbour. So also with regard to a ferry. If the landing stages on each side are owned, as in almost every case they would be, by the proprietor of the ferry, the income arising from the ferry would be properly referable to a property in the land. But if tolls or any other income arise from property not within the limitation imposed by the words of the schedule itself they cannot be taxed under its provisions. In the present case, it is found that Stirling Harbour, which was transferred to the Board, was practically derelict at the time of its transfer, and there is little prospect of its use for shipping, and, further, that with the exception of the Stirling Harbour, the Respondents did not own any heritable subjects apart from a portion of the foreshore, purchased for possible future reclamation.
The sole revenues of the Company arise from the shipping dues and the dues on passengers. Now these dues are not monies arising from any of the property specified in Sehedule A and unless, therefore, a series of judicial decisions have caused the interpretation of these words to be extended, on principle I think that the Appellants must fail.
Turning now to the authorities, it is, I think, important to notice that in no case has the actual question arisen winch arises here. In the Attorney-General v. Black L.R. 6, Ex Cases page 78, and page 308 the point was whether monies accruing to the Improvement Commissioners of Brighton from a duty of 6d. on every chaldron of coal landed on the beach or brought into the town was liable to tax; the real defence being that it was in the nature of a district rate payable by the inhabitants. In the Court of Exchequer Kelly C.B. decided against the Commissioners on the general ground that the monies received would be income in the...
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