PIGS MARKETING BOARD (NORTHERN IRELAND) v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judgment Date | 17 January 1945 |
| Date | 17 January 1945 |
| Court | King's Bench Division |
NO. 1309-HIGH COURT OF JUSTICE, NORTHERN IRELAND (KING'S BENCH DIVISION)-
Income Tax - Exemption - Charitable purposes - Income Tax Act, 1918 (8 & 9 Geo. V, c. 40), Section 37 (1) (b).
The Appellant Board was a statutory body corporate established by the Pigs Marketing Scheme (Northern Ireland), 1933, for regulating the marketing of pigs, a scheme framed by the Ministry of Agriculture for Northern Ireland pursuant to the Agricultural Marketing Act (Northern Ireland), 1933, which provides for the framing of such a scheme where necessary for the more efficient production and marketing of an agricultural product. The Board originally consisted of fourteen members, of whom three were appointed by the Minister of Agriculture and eleven were elected by registered producers, i.e., persons who bred pigs or kept them for the purpose of breeding from them or selling them in an improved condition, but in 1939 the elected members were reduced to two by an amending Order.
The Board had power to buy and sell pigs; to produce bacon and other pig products and to establish slaughter-houses for that purpose; to supply registered pig producers with anything required for the production of pigs, and to co-operate with others in the exercise of such powers. The Board was also empowered to borrow money and to levy contributions from producers. All moneys received were to be paid into a fund administered and controlled by the Board, and all moneys required by the Board for the operation of the scheme (including payments for research and educational work and grants to bodies rendering certain services to producers) were to be paid out of the fund. The Board might invest any moneys for the time being standing to the credit of the fund. Under the original scheme any surplus funds were to be distributed among producers in certain proportions, but the Bacon Industry Act (Northern Ireland), 1939, provided that they were to be applied for the benefit of the pig producing industry in such manner as the Ministry of Agriculture might direct. (The Board also originally had power to fix prices and terms of sale of pigs and a wide control over producers, but these functions were transferred to other bodies by the Agricultural Marketing (Pig Industry) Act (Northern Ireland), 1934, and the Bacon Industry Act (Northern Ireland), 1939, respectively.)
The Board claimed exemption from Income Tax in respect of the income from the investments of its fund for the seven years to 1941-42 inclusive, contending that it was a body of persons established for charitable purposes only, on the ground that its purposes were for the public benefit and for the advancement of agriculture. The claim was refused by the Commissioners of Inland Revenue, and the Special Commissioners, on application to them under Section 19 of the Finance Act, 1925, upheld the refusal.
Held, that the Appellant Board was not a body of persons established for charitable purposes only, and was not entitled to exemption.
Stated under the Finance Act, 1925, Section 19, and Income Tax Act, 1918, Section 149, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the King's Bench Division of the High Court of Justice in Northern Ireland.
1. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on 22nd February, 1944, the said Commissioners heard (under Section 19 of the Finance Act, 1925) a claim by the Pigs Marketing Board (Northern Ireland) (hereinafter called "the Appellant Board") for exemption from Income Tax in respect of its investment income for the seven years ending 5th April, 1942, on the ground that the Appellant Board was a body of persons or trust established for charitable purposes only, and was therefore entitled to exemption from tax under Section 37 of the Income Tax Act, 1918.
2. The Appellant Board is a statutory body corporate established in the year 1933 by a scheme framed by the Ministry of Agriculture for Northern Ireland, pursuant to the provisions of the Agricultural Marketing Act (Northern Ireland), 1933.
The statutory purpose of the Appellant Board is to regulate the marketing of pigs.
3. The main statutory provisions governing the establishment and functions of the Appellant Board are as follows:-
Agricultural Marketing Act (Northern Ireland), 1933
Section 1 enables the Ministry of Agriculture to frame a scheme regulating the marketing of an agricultural product for application to Northern Ireland, or to some part thereof, in any case where the Ministry is satisfied that such a scheme is necessary for the more efficient production and marketing of the said agricultural product.
The expression "agricultural product" is defined by Section 21 as including: "any product of agriculture or horticulture and any article of "food or drink wholly or partly manufactured or derived from any such "product, and fleeces and the skins of animals".
Section 2 (1) provides that every scheme shall constitute a board to administer the scheme, and that the board shall be composed of such number of members as the scheme may fix, of whom three shall be appointed by the Minister of Agriculture and the others shall be elected by registered producers, or chosen by a body or bodies elected by registered producers, in accordance with the scheme. (These provisions were subsequently amended by Section 16 of the Bacon Industry Act (Northern Ireland), 1939, referred to below.)
The expression "registered producer" is defined by Section 21 as meaning in relation to any scheme, a producer registered under the scheme. "Producer" is there defined as meaning, in relation to any scheme, any person who produces the regulated product. "Regulated product" is defined as meaning, in relation to any scheme, any product the marketing of which is regulated by the scheme, but does not include any product in so far as it is produced outside the area to which the scheme is applicable.
Section 2 (5) makes applicable the provisions contained in the Second Schedule, and Paragraph 1 of that Schedule provides that the board shall be constituted by the scheme as a body corporate with a common seal and power to hold land without licence in mortmain.
Section 3 enacts that every scheme shall provide for the registration of any producer of the regulated product who makes application for that purpose.
Section 4, 5, 6 and 7 (1) and (2) authorise or require a scheme to make provision for the respective matters therein mentioned. These matters (in relation to the Appellant Board) are set out in the Scheme mentioned below.
Section 7 (3) empowers the Ministry to require the board administering a scheme to impose a special levy or levies (a) for the purpose of securing that the provisions of the scheme operate equitably as between all classes of producers, or (b) for the purpose of covering any loss which the board have experienced in trading under the scheme.
Section 8 contains provisions regarding contracts and imposes upon the board the duty to register certain contracts. The relevant provisions of the scheme in relation to contracts are contained in the print of the Scheme referred to below.
Agricultural Marketing Act (Northern Ireland), 1934
This Act (inter alia) makes further provision with respect to the financial powers of boards administering schemes under the Agricultural Marketing Act (Northern Ireland), 1933. In particular, Section 1 enacts that a scheme may provide for empowering the board, in such class of cases as may be specified in the scheme, to pay compensation to registered producers in respect of any loss which, in the opinion of the board, has been occasioned to such producers by the operation of any scheme, whether administered by that board or not.
Agricultural Marketing (Pig Industry) Act (Northern Ireland), 1934
This Act was passed to provide for the regulation of the production of bacon and hams and to make further provision with respect to the licensing of bacon-curers; to provide for the establishment of a "Pig Industry "Council"; to amend the enactments with respect to the marketing of agricultural products in their application to pigs, bacon and hams.
The only provisions affecting the Appellant Board are Section 5 (1), 6, 8 and 14.
Section 5 (1) provides that it shall be the duty of the Pig Industry Council to determine the prices at, below or above which, and the terms on which, pigs or any description of pigs may be sold by any producer thereof, and that the powers of the Appellant Board relating to the determination of any such prices or terms or to the enforcement of such determination shall cease to have effect.
Section 6 provides that where any contribution is payable by pig producers to the fund administered by the Pigs Marketing Board, or any levy is imposed upon pig producers under Section 7 (3) of the Act of 1933 (above), a buyer of pigs who is a licensed bacon-curer shall deduct from the price the amount of the contribution or levy and pay it to the Ministry, who in turn shall pay it to the Board.
Section 8 (1) provides that, for the purpose of the enforcement of any determination of the Pigs Marketing Board, the powers of an officer under the Act of 1933 shall include power to enter any premises on which pigs are sold or offered for sale by an auctioneer and to examine and weigh pigs found on those premises.
Section 8 (2) provides that nothing in Section 5 or Section 7 of this Act shall operate so as to render it unlawful for the Appellant Board, acting under and in pursuance of the pig marketing scheme, to sell pigs or any description of pigs belonging to any grade at such prices and on such terms as the said Board may determine, or for any person to buy those pigs from the said Board.
Section 14 provides (inter alia) that there shall be paid into the Pig Industry Fund such contributions from the Pigs Marketing Board as may be...
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