Lincolnshire Sugar Company Ltd v Smart
| Jurisdiction | England & Wales |
| Judge | Lord Atkin,Lord Russell of Killowen,Lord Macmillan,Lord Roche |
| Judgment Date | 21 January 1937 |
| Judgment citation (vLex) | [1937] UKHL J0121-1 |
| Date | 21 January 1937 |
| Court | House of Lords |
[1937] UKHL J0121-1
House of Lords
Lord Atkin.
Lord Thankerton.
Lord Russell of Killowen.
Lord Macmillan.
Lord Roche.
My Lords,
I have had the opportunity of reading the Opinion which is about to be delivered by my noble and learned friend Lord Macmillan. I agree with it, and have nothing to add.
My Lords,
I, too, have had that advantage, and I concur in the conclusions which my noble and learned friend has reached and also in the grounds upon which those conclusions are based.
My Lords,
I am requested by my noble and learned friend Lord Thankerton to express his concurrence in the views which I have embodied in my Opinion about to be read.
My Lords,
During the period to which this Appeal relates the Appellants, the Lincolnshire Sugar Company Limited (now in liquidation) carried on at Bardney in Lincolnshire the business of manufacturing sugar from beet grown in Great Britain. Between 18th October, 1931, and 3rd January, 1932, the company received payment of sums amounting to £17,494 5s. 7d. under the British Sugar Industry (Assistance) Act, 1931, out of moneys provided by Parliament. The question for determination is whether those sums ought to be taken into account as trade receipts in computing the balance of profits and gains of the company for the year 1931–32, on which was based the assessment of their income for tax purposes for the year 1932–33 under Case I of Schedule D to the Income Tax Act, 1918.
By a previous Statute entitled the British Sugar (Subsidy) Act, 1925, it was provided that out of moneys provided by Parliament a subsidy at prescribed rates should be paid in respect of every hundredweight of sugar or molasses manufactured during a period of ten years beginning 1st October, 1924, from beet grown in Great Britain. It was made a condition of the payment of the subsidy that the price paid for the beet used in the manufacture should not be less than a minimum rate per ton prescribed by the Act. The rate of subsidy diminished by stages during the ten years period.
Under the Act of 1925 the company duly received payment of subsidies which were carried to the credit of their profit and loss accounts as trade receipts. These subsidies were included in the computation of the company's profits and gains for income tax purposes and it was conceded, for the purposes of the present case, that they were rightly so included.
In the year 1931, in view of the heavy fall in the price of sugar and the diminution in the rates of subsidy, further state-aid was afforded to certain of the companies (including the Appellants) engaged in the British sugar beet industry which would otherwise have experienced difficulty in paying the prices contracted to be paid to the growers of the beet. This further assistance did not take the form of increasing the subsidies payable under the Act of 1925, but was provided under a statutory scheme embodied in the British Sugar Industry (Assistance) Act, 1931, whereby "advances" were to be made to the named companies in respect of sugar manufactured by them from home grown beet during the period of one year from 1st October, 1931.
As the question whether the payments received by the company under the Act of 1931 were or were not trade receipts depends upon the character and incidents of these payments, it is necessary to examine the relative provisions of the Act.
The title of the Act of 1931 is in marked contrast with the title of the Act of 1925. Whereas the latter is entitled "An Act to provide for the payment of a subsidy in respect of sugar and molasses manufactured in Great Britain …," the former is entitled "An Act to provide for the making of advances to certain companies in respect of sugar manufactured by them in Great Britain during a period of one year beginning on the first day of October, nineteen hundred and thirty-one from beet grown in Great Britain; to provide for the recovery in certain events of the whole or some part of the advances so made, and for the remission of any balance thereof not so recovered." The preamble recites that His Majesty's Government have "offered to grant assistance by way of advances to the extent and subject to the conditions mentioned in this Act to such persons engaged in the manufacture in Great Britain of sugar from beet grown in Great Britain as might be prepared to accept those conditions," and that these conditions have been accepted by the companies specified in the First Schedule to the Act (among whom are the Appellants).
The first Section provides for the making of the advances. They are to be paid by the Minister of Agriculture and Fisheries out of moneys provided by Parliament. The maximum quantity of sugar in respect of which advances may be made to any one factory is fixed at 300,000 cwts., and the amount of the advance to be made in respect of each cwt. of sugar is to be calculated in the manner prescribed in the Third Schedule to the Act and is in no case to exceed 1s. 3d. per cwt. It is further provided that no advance is to be made unless the Minister is satisfied that the price paid to the grower of the beet is not less than the price per ton specified in the Second Schedule to the Act.
Having thus in Section 1 made provision for the payment of the advances, the Act proceeds in...
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Preliminary Sections
...235……………….490 Lewis v. Daily Telegraph (1964) A.C. 234……………….........................……..299 Lincolnshire Sugar Company Ltd. v. Smart (1937) A.C. 697, (1937) 1 All E.R. 413………….......................................................................................210, 212 Lingo (Nig.) Ltd. v......