[IN THE COURT OF APPEAL.]

THE QUEEN v. THE COMMISSIONERS FOR SPECIAL PURPOSES OF THE INCOME TAX.

Revenue - Income Tax - Repayment of Income Tax - Computation of Profits - Time within which Overpayment must be proved - Jurisdiction of Income Tax Commissioners - 5 & 6 Vict. c. 35, s. 133 - "At the end of the year" - Mandamus.

By 5 & 6 Vict. c. 35, s. 133, "if within or at the end of the year" of assessment any person charged with income tax under Schedule D. "shall find and shall prove to the satisfaction of the Commissioners by whom the assessment was made that his profits during such year for which the computation was made fell short of the sum so computed," &c., it shall be lawful for the said Commissioners to cause the assessment to be amended as the case shall require and, in case the sum assessed shall have been paid, to certify under their hands to the Commissioners for Special Purposes the amount of the sum overpaid upon such first assessment, and thereupon the last-mentioned Commissioners shall issue an order for the repayment of such sum as shall have been so overpaid, &c.

An English company, working mines abroad, made, in March, 1887, an application under the above section for certificates in respect of overpayments of income tax assessed on profits for the years ending respectively April 5, 1884, and April 5, 1885, and the Commissioners by whom the assessments were made having inquired into the case gave them certificates under the section. The Commissioners for Special Purposes refused to issue orders for repayment on such certificates on the ground that they were made without jurisdiction, the company not having found and proved "within or at the end of the year" as required by the section that their profits in the respective years fell short of the sum computed:-

Held, that the certificates given were valid; and that mandamus lay to

compel the Commissioners for Special Purposes to issue orders for repayment of the amounts certified to be overpaid.

The expression "at the end of the year" in the above section does not mean at any time after the end of the year, or, on the other hand, within any limit of time generally applicable, but as soon after the end of the year as, having regard to the circumstances of the particular case, is practicable by the use of due exertions.

By LORD ESHER, M.R. The Commissioners by whom the assessment was made are given by the section jurisdiction finally to determine whether the discovery and proof of the profits having fallen short of the sum computed has been made within the period specified in the section as above interpreted.

By LINDLEY, L.J. The Commissioners by whom the assessment was made having granted the certificate under the section, the onus of shewing that such discovery and proof were not made within the period above mentioned, and that the certificate was therefore invalid, rested on the Commissioners for Special Purposes, and was not satisfied by the mere fact of the application for the certificate not having been made before the date when it was made in the present case.

APPEAL from the order of the Queen's Bench Division, discharging a rule calling upon the Commissioners for Special Purposes of the Income Tax to shew cause why a mandamus should not issue commanding them to make orders for repayment to the Cape Copper Mining Company, Limited, of certain overpaid income tax pursuant to 5 & 6 Vict. c. 35, s. 133.

The facts are stated in the report of the case in the court below (20 Q.B.D. 549). It is sufficient to state them here briefly as follows:-

It appeared that in March, 1887, the company applied to the Income Tax Commissioners for the City of London for certificates under 5 & 6 Vict. c. 35, s. 133, entitling them to repayment of income tax alleged to have been overpaid in the years of assessment ending respectively April 5, 1884, April 5, 1885, and April 5, 1886. The Income Tax Commissioners for the City of London inquired into the claim, and granted a certificate for each year. Upon the case coming before the Commissioners for Special Purposes they made an order for repayment of the amount of the certificate given in respect of the assessment for the year ending 1886, but refused to make any orders upon the certificates given in respect of the other years, on the ground that they were given without jurisdiction, the discovery and proof of the profits having fallen short of the sum computed not having been made at the

end of the respective years of assessment within the meaning of s. 133 of 5 & 6 Vict. c. 35.

It appeared to be the practice of the Commissioners for Special Purposes to refuse claims for repayment of income tax unless made within a year from the end of the year of assessment to which they related.

The Divisional Court (Cave and Grantham, JJ.) was divided in opinion, Cave, J., thinking that the rule should be discharged, and Grantham, J., thinking that it should be made absolute; and, the latter learned judge withdrawing his judgment in accordance with the usual practice, the rule was discharged.

The applicants for the mandamus (the Cape Copper Company) appealed.

Sir H. Davey, Q.C., F. Meadows White, Q.C., and Pollard, for the applicants. The words "at the end of the year" in s. 133 of 5 & 6 Vict. c. 35, are equivalent to "at any time after the end of the year." The 10th section of 23 Vict. c. 14, imposes a period of limitation, viz., three years, on all claims in respect of overpayments of income tax, and there is no other limitation. The claim of the applicants was within the three years.

Mandamus will lie in this case. The application is not to enforce payment of money by the Crown but to compel the Commissioners for Special Purposes to perform a statutory duty, in which the applicants are interested, viz., to make the orders they are directed to make by s. 133.

Sir R. E. Webster, A.G., and Sir E. Clarke, S.G. (T. Hewitt,with them), for the Commissioners. The Commissioners for General Purposes acted without jurisdiction in giving certificates in respect of the years ending April, 1884, and April, 1885, the discovery and proof of the overpayments not having been made within the time mentioned by s. 133. The words "at the end of the year" in s. 133 cannot be construed as meaning "at any time after the end of the year." "At" is not the same as "after." It must be admitted that "at the end of the year" cannot mean immediately at the end of the year; but it must mean within a reasonable time after the end of the year, and it is for the Court to construe the section and to fix what would be such a time.

The period fixed by the practice of the Commissioners, viz., a year from the end of the year of assessment, would be a reasonable limit. It is submitted that the court cannot say, where the claims for repayment were not made till March, 1887, that discovery and proof of the overpayments were made, as required by the section, at the end of the years ending respectively April, 1884, and April, 1885.

The case is not one in which mandamus will lie; a petition of right is the only remedy. The application is substantially to compel the Crown to pay money, and is not one to compel performance of a statutory duty, the Act creating no duty as between the applicants and the Commissioners for Special Purposes. The Crown cannot direct a mandamus to itself or its servants acting merely as such. [On this latter point were cited: Reg. v. Lords of the Treasury (1); Reg. v. Lords Commissioners of the Treasury (2); Reg. v. Commissioners of Woods and Forests (3); In re Nathan (4); Rex v. Lords Commissioners of the Treasury. (5)]

Sir H. Davey, Q.C., in reply.

1888. June 23. The following judgments were delivered:-

LORD ESHER, M.R. In this case the applicants had been assessed to and had paid income tax in respect of their business; and a considerable time afterwards they asserted that they had made an overpayment, and applied for repayment in respect thereof to the Income Tax Commissioners for General Purposes, who inquired into the facts of the case and gave to the applicants certificates under s. 133 of 5 & 6 Vict. c. 35. Upon those certificates being taken before the Commissioners for Special Purposes, and their being asked to issue orders for repayment of the amounts thereby certified as overpaid, they declined to do so on the ground that the Commissioners for General Purposes had no jurisdiction to give the certificates which they gave. An application was thereupon made to the Queen's Bench Division for a mandamus directing them to issue such orders. On this application

(1) 16 Q. B. 357.

(2) Law Rep. 7 Q. B. 387.

(3) 15 Q. B. 761.

(4) 12 Q.B.D. 461.

(5) 4 A. & E. 286.

the points which arise are that mandamus will not lie, and that the Commissioners for Special Purposes could not go behind the certificates and, if they could, they were wrong in contending that under the circumstances of the case the Commissioners for General Purposes had no jurisdiction. The judges in the Divisional Court, Cave and Grantham, JJ., were divided in opinion, but in accordance with the practice the junior judge withdrew his judgment, and the rule for a mandamus was discharged. With regard to the question whether mandamus will lie, I am of opinion that the case falls within the class of cases, where officials having a public duty to perform, and having refused to perform it, mandamus will lie on the application of a person interested to compel them to do so. The remaining question is whether, supposing the remedy by mandamus to be applicable, the case is one in which the applicants are entitled to a mandamus. It is unnecessary in the view we take to decide the point whether the Commissioners for Special Purposes can decline to act on the certificate, as long as it exists, or whether the remedy, if it was wrongly made, was not to get it set aside on certiorari. The question whether the Commissioners for General Purposes had jurisdiction depends on the construction of the 133rd section of 5 & 6 Vict. c. 35. The objection taken is that these applicants did not find out and prove to the Commissioners the facts shewing the overpayment "within or at the end of the year" within the meaning of the section. It is clear that they did not do so "within" the year, so the question is whether they did so "at the end" of the year. It was admitted that "at the end of the year" cannot mean the very moment when the year ends; that it must indicate some more extended time. The one side contends that it means at any time after the end of the year, that is to say, that "at" and "after" for this purpose really mean the same thing. The other side contends that the words must be construed more strictly, and, though it is impossible to contend that they mean immediately on the year's ending, yet they must mean some limit as near as possible thereto to be decided by the Court on the construction of the words, and which would be generally applicable, and would not depend on the circumstances of each particular case. In my opinion neither of those views is

correct. I think the section must receive a reasonable interpretation with regard to the exigencies of business. There may be many cases in which an overpayment might be made clear in a very short time after the end of a year, but in the case of mercantile people engaged in large concerns, carried on sometimes in different parts of the kingdom, and sometimes in foreign countries, and where there are complicated accounts, it would often be impossible to find out and prove the existence of overpayments in so short a time as would be sufficient in the case of an overcharge in respect of a single item, where there was no complication about the matter. It seems to me that we must give a meaning to these words elastic enough to make them fairly and reasonably applicable to the different cases to which they will have to be applied. I do not think, on the one hand, that they ought to be construed so widely as to make them equivalent to "at any time after the end of the year," or, on the other hand, that they ought to receive such a restrictive construction as suggested, or to be held to mean a single period which the Court is to determine, within which every case must be brought. I think they ought to receive such an interpretation as would make them applicable in a reasonable manner to the circumstances of each particular case. I think the proper construction of them is that they mean that the overpayment must be found out and proved in as short a time after the end of the year as is possible in the particular case with exertion on the part of the person claiming repayment. I will not say that the statute simply means within a reasonable time after the end of the year. I think it must be the shortest time in which it could be done if every exertion was made that ought to be made. If a person makes delay in examining into his affairs so as to exceed this time, though such delay may be not unreasonable, still I think he would be too late. His case would not in my opinion come within the meaning of the words "at the end of the year" as used in the section. If, on the contrary, the person claiming repayment has made every exertion which he ought to have made, then it does not follow, because several months or even a year or even two years have elapsed from the end of the year, that he is too late: if he could not have taken less time than he has, I think he would have satisfied the

terms of the section. This view of the section involves the result that the question, whether the party claiming has so satisfied the terms of the section, must be the subject of inquiry with reference to the particular circumstances in each case. I have been laying down what in my opinion is the general rule of conduct for those charged with that inquiry, but the question arises who are to make that inquiry. In the first instance obviously the Commissioners for General Purposes. They have to determine that question, and they must determine it, as it seems to me, according to the rule I have laid down. But when they have determined it, can their decision be questioned afterwards? It will be said on the one side that their jurisdiction depends on the decision of that question and, applying a well-known formula, that they cannot give themselves jurisdiction by a wrong decision on the facts. I have considered that formula with great care and, though it is correct enough for certain purposes, I think its application is often misleading. When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state of facts exists and is shewn to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction. But there is another state of things which may exist. The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do something more. When the legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be none. In the second of the two cases I have mentioned it is an erroneous application of the formula to say that the tribunal cannot give

themselves jurisdiction by wrongly deciding certain facts to exist, because the legislature gave them jurisdiction to determine all the facts, including the existence of the preliminary facts on which the further exercise of their jurisdiction depends; and if they were given jurisdiction so to decide, without any appeal being given, there is no appeal from such exercise of their jurisdiction. In this case I think the Act gave the Commissioners for General Purposes jurisdiction to inquire into and finally determine the question whether the applicant has brought his case within the terms "at the end of the year" interpreted in the sense I have mentioned. If they determine that he has not, then they cannot proceed further in the matter. If they find that he has, then they must go further and exercise their jurisdiction with regard to overpayment, and there is no appeal from their decision. It may be perhaps more satisfactory that I should state that, if I thought that we had to determine that question, I should be of opinion that the Crown had not brought forward any facts which shewed that the Commissioners for General Purposes had decided wrongly on this question. For these reasons I think that the appeal should be allowed, and the rule for a mandamus made absolute.

LINDLEY, L.J. I have come to the same conclusion as the Master of the Rolls. The question we have to decide, apart from the question whether mandamus will lie, which I will deal with hereafter, turns on the construction of s. 133 of 5 & 6 Vict. c. 35. That section was amended by 28 & 29 Vict. c. 30, s. 6, and must also be taken in conjunction with s. 10 of the 23 Vict. c. 14, which limits the time within which claims for the repayment of duty may be allowed. I do not think, however, that the later sections have any application to the matter we are now considering, and the question really turns on the construction of the words of s. 133. The contention of the Commissioners for Special Purposes in substance is that the applicants did not within the meaning of the section find out and prove "at the end of the year" that their profits had fallen short of the sum computed. In order to determine that question we must construe those words of the section. It is conceded and it is obvious that

"at the end of the year" cannot mean the moment that the clock strikes twelve at the expiration of the current year. So to construe the section would practically be to strike out the words "at the end of the year" altogether. Therefore some construction short of that must be put on the words. We must, I think, consider how the provision can be worked as a matter of business. It is applicable to all sorts of persons, not only to persons engaged in professions and trades in this country, but to bodies who, like this company, have an office here and are working mines or other such undertakings abroad. I think the true view of the words is that which has been stated by the Master of the Rolls, viz., that they mean as soon after the end of the year as is practicable, having regard to the facts and circumstances of the particular case, and to the obligation to use due diligence. I do not think it would be sufficient that what is required should be done in a "reasonable" time, after the end of the year, unless the term "reasonable" be held to imply the use of diligence. That being in my opinion the true meaning of the words, what are the facts in this case? Those who represented the company went before the Commissioners and satisfied them that there had been over-payments in respect of income tax, and I suppose they must have satisfied them, provisionally at all events, that they had ascertained and proved that to be the case with reasonable diligence. At any rate they got certificates from them. I think that getting such a certificate places them in a better position than before. The Commissioners for Special Purposes cannot take up any ground which will avail them short of contending that the certificate was given without jurisdiction. How can they establish that contention? If the view is correct that the Commissioners for General Purposes are the judges to determine finally whether the applicants had satisfied the condition as to time imposed by the words of the section, then that decision is binding on the Commissioners for Special Purposes and there is no appeal. Having regard to the terms of s. 133, I must admit that I doubt whether the Commissioners for General Purposes are made the final judges of that question. But supposing that they are not, I think that, the certificate having been granted, the presumption is in favour of its validity, and the onus of proving that the Commissioners for General Purposes exceeded their jurisdiction is

thrown on those seeking to impeach its validity; and it lies on them to shew that the applicants did not find or prove what is requisite under the section "at the end of the year." What evidence in this case have they shewn of this? Absolutely nothing but the mere dates: and on those we are asked to hold as a matter of law that the case was not within the section. Whether we ought to do so or not appears to depend to a great extent on what is the true interpretation of the words as used in the section. It seems to me that, taking the interpretation of the words to be what I have before stated, the Commissioners for Special Purposes have entirely failed to shew that the period contemplated by the section has been exceeded. The mere fact of the application by the company to the General Commissioners not having been made till it was does not shew that it was not made as soon as was practicable having regard to the circumstances of the case. The result is that the certificates must be treated as valid and the applicants are entitled to succeed. Interpreting the section as I do, I think the view expressed by Cave, J., in the court below as to the interpretation of the section more correct than that taken by Grantham, J., but I think the former did not give sufficient weight to the fact of the certificates having been obtained.

With regard to the question whether mandamus would lie, I have looked into the authorities and I come to the conclusion that the case is one in which it will lie. It is no doubt difficult to draw the line, and some of the cases are not easy to reconcile: but I think that the counsel for the applicants were right in saying that the application is not to enforce payment of money by the Crown, but to enforce the making of an order by the Commissioners which it is the duty of the Commissioners to make, and without which the repayment cannot be obtained. I think the case comes within the principle of the cases of Reg. v. Lords of the Treasury (1), and Reg. v. Commissioners of Woods and Forests (2), and not within the cases cited for the Crown. For these reasons I think the appeal should be allowed.

Solicitor for applicants: J. Sheppard.

Solicitor for Commissioners: Solicitor of Inland Revenue.

(1) 16 Q. B. 357.

(2) 15 Q. B. 767.

E. L.