INLAND REVENUE COMMISSIONERS Vs. BUTTERLEY CO. LTD.

JUDGEMENT

(1.) THIS case is concerned with the claim by the Crown to profits tax in respect of sums, now admittedly income for income -tax purposes, received by the Butterley Co. Ltd. in the years 1947, and following, from the Minister of Fuel of three kinds, namely, (1) revenue payments in respect of the years 1947 and 1948 under section 22(3) of the Coal Industry Nationalization Act, 1946 (which I shall hereafter sometimes call the Coal Act, 1946); (2) revenue payments in respect of the years 1949 and 1950 under section 1 of the Coal Industry (No. 2) Act, 1949 (which I shall hereafter sometimes call the Coal Act, 1949); and (3) other sums paid under section 22(2) of the Coal Act, 1946; in satisfaction or part satisfaction of the right to interim income conferred by section 19(2) of the last -mentioned Act. Although the payments are of the three kinds I have indicated, all of them were in respect of the right to interim income under section 19(2) of the Coal Act, 1946. So far as class (3) above is concerned, these were expressly paid towards satisfaction of that right. The revenue payments, on the other hand, are expressed in the statute to be 'in substitution for' what may be called the primary right under the Act of 1946. The revenue payments under the Act of 1949 also differed from those under the Act of 1946 in that, if the former were found to exceed what would be payable strictly by way of interim income under section 19(2) of the Act of 1946 for the given year, the recipient would be liable to be made to recoup.

(2.) NOTWITHSTANDING the above difference, it is to my mind, clear that the Crowns claim to tax should wholly fail or wholly succeed. there is, in my judgment, no sensible distinction between any of the three types of payment for present purposes, and no suggestion to that effect was made in the course of the argument on either side.

(3.) THE scheme of the Coal Act, 1946, is well known and I shall not take time in describing its general nature. It provided for the transfer, on what was called the primary vesting date - a date which was later fixed as January 1, 1947 - to the National Coal Board of the business assets, and other assets called overhead expenses increases, of the component parts then existing of the coal industry. For the assets so transferred compensation was provided under the Act to the components in the industry, of which the Butterley Co. was one. I can, with that introduction, turn at once to section 19 of the Coal Act, 1946, which, by sub -section (1), provides : 'Compensation in respect of a transfer of transferred interests or of an overhead expenses increase shall be due on the primary vesting date' - that is January 1, 1947 -'subject to determination of the amount thereof.' I pause to state that the method of determining the amount was of a complex nature, and made it clear that a considerable time would elapse before it was, in fact, finally determined.