§ (a) If any person, charged by an assessment or surcharge of the duties contained in Schedule D of the Acts relating to Income Tax in England or Scotland, shall think himself aggrieved by the determination of the Commissioners for general purposes or the Commissioners for special purposes directed to hear appeals in any appeal against such assessment or surcharge, it shall be lawful for him, on giving notice in writing to the inspector or surveyor within twenty-one days after such determination, to require that such appeal shall be reheard by His Majesty's High Court of Justice, and thereupon such appeal shall be reheard by a Judge of His Majesty's High Court of Justice (King's Bench Division) in such manner and in accordance with such conditions as shall be prescribed by rules of the Supreme Court, and the determination of such judge on such appeal shall be final and conclusive on all questions of fact; but if any party to such appeal shall be dissatisfied with the determination of the judge in point of law, or upon the admission or rejection of any evidence, the party aggrieved may appeal from the same to His Majesty's Court of Appeal and from thence to the House of Lords.
§ (b) The fact that an appeal is pending before the High Court of Justice shall not in any way interfere with the payment of the Income Tax according to the assessment appealed against, but the Income Tax shall be paid according to such assessment, as if there were no appeal; and in the event of the amount of assessment being altered by the order or judgment of the Court the difference in amount, if too much has been paid, shall be repaid with such interest (if any) as the Court may allow, and if too little shall be deemed to be 1620 arrears and shall be paid and recovered accordingly.
§ (c) In the application of this Section to Scotland a Lord Ordinary or Judge of the Court of Session shall be substituted for a Judge of the High Court of Justice and the Court of Session for the Court of Appeal.
§ An appeal is now allowed to individuals or others on questions of law to the High Court from the assessment of the Commissioners, but on questions of fact the Commissioners' decision is final. As the Committee are well aware, there are a great number of important questions which are on the border-line and are a mixture of fact and law. Many of those cases have arisen—cases of large merchant houses and shipowners—in connection with depreciation of shipping, the domicile of an individual or a firm, depreciation of plant, and a great many other matters. The intention of the Legislature evidently was to allow an appeal to the High Court, but it was thought when the Income Tax was first imposed that people would not welcome the publicity of the courts, and that they would rather have the more or less secret proceedings before the Commissioners, and the Commissioners were doubtless instituted largely from that point of view. Nowadays that argument no longer has the same force and publicity in the case of companies; at least, is no longer so necessary. And the desire is to get an effective right of appeal, which the Legislature evidently intended to give, and which is not effective at the present moment, to the court both on questions of law and fact. At present, when very involved cases are heard before the Commissioners, they give a decision, and if the person assessed considers he has a grievance he asks the Commissioners to state a case for the High Court. The Commissioners are advised by a clerk, who is usually a solicitor, and the case is prepared 1621 by that clerk. It is only natural, while everyone will give credit to the Commissioners to state the case without bias, and also the clerk, that they should be rather averse to the idea that their decision is likely to be upset, and they will state their case in such a way as to make it very difficult to have an effective appeal to the High Courts. They state sometimes that they arrived at their decision on facts when, as a matter of fact, the question is so mixed up that it is really in the domain of law. There are very important cases which have been decided, as many people think, wrongly, and where an appeal to the courts has been impossible under the present condition of the law. Therefore the Shipowners' Association and merchants generally desire to have an effective appeal to the High Courts.
§ Sir SAMUEL EVANSIn putting on the taxes this year we do not make any change at all in the nature of the appeal allowed. This would be a very serious alteration of the law. There is an appeal now, and it is not quite fair to say that the cases are not stated fairly.
§ Sir A. WILLIAMSONI did not say intentionally.
§ Sir SAMUEL EVANSThe appeal now is by way of case stated. You must assume that the people from whom the appeal is made will state the case fairly. I do not know what appeal other than that you can offer, except generally, on fact and law, leaving the whole matter open. That may or may not be a great improvement in the law, but at this stage it is rather a strong order to ask the House of Commons to make it. Wherever there is an appeal by way of case stated the same alteration ought to be made. Practically all the appeals from the inferior courts of this country are by way of case stated, and the same arguments used in favour of this Amendment might be used in regard to most cases. The appeals from quarter sessions and petty sessions, and in rating appeals, which are analogous to Income Tax cases, are all by way of case stated. The case of the county court is quite distinct. There the appeal is only on a clear point of law, unmixed with fact, which must have been clearly stated by way of objection before the county court judge. The answer to my hon. Friend is two-fold. First, there has been no serious complaint up to now of the method of appeal in Income Tax cases by way of case 1622 stated; secondly, appeal by way of case is not at all confined to these cases, but is quite the ordinary form of appeal, and there is no reason for the alteration on this particular matter any more than in the other matters where the appeal is in this form.
§ Sir E. CARSONI hope the Chancellor of the Exchequer will favourably consider this proposal. I must differ entirely from the Solicitor-General when he says that there has been no complaint of the present procedure of appeal by way of case stated. I was Solicitor-General for six years, and I could not count the number of complaints that were made. When the Income Tax gets high, as it was during the war, an immense number of complaints are made by parties interested in Income Tax assessments. Many complaints come to me, mainly on the ground that it is impossible in cases where there are mixed questions of law and fact, unless you have a general right of appeal, that the court should have cognisance of the real question raised. I believe that these objections come from the very persons who are most willing to act honourably and fairly towards the revenue, and who are perfectly prepared to pay their fair quota towards the revenue of the country; but they feel a grievance when there is a point which they thoroughly understand in relation to their own business coming before these Commissioners, who very often give the go-by to the contentions put forward, maybe because they do not understand them. These Commissioners are not lawyers, and a man has to be a long time at the Bar before he understands when a case passes the border line between law and fact and becomes a mixed question of law and fact. I remember many cases in which I have appeared for the Crown where the parties have complained through their counsel that the way in which the case was stated stated them out of court. I do not say that it was done with any improper intention; but it was impossible to argue the question you wished to argue, because you were at once met with the statement, "The Commissioners say that they have found, as a matter of fact, so and so," and you were thereby precluded from going into questions of law on which the facts which the Commissioners professed to have found might depend. That is entirely unsatisfactory. I remember cases in which the judges have strained the administration in order to allow facts to be stated, so as to show the way in which the Commissioners have dealt with a particular point, 1623 and the matter has been sent back to the Commissioners from the court for them to state various facts in order that the appellate tribunal might have them before it, and be able to see the real bearing of the facts on the question of law. Nobody who has had to deal with the matter can help knowing that the complications of business, the various ways in which accounts are kept, what are legitimate trading deductions are all matters which may very materially affect the assessment for Income Tax, but are matters which under the present system the parties are precluded from bringing into court. All through these Debates we have fought for an appeal in regard to the new taxes, especially the Land Taxes, and the Government have met us satisfactorily. We have the fullest appeal in relation to the Land Taxes. Why should Income Tax be in a worse position? The Income Tax is becoming by far the most important in the country. We have the fullest possible appeal in relation to Death Duties. What difference in principle is there between Death Duties and Income Tax in the matter of the appeal? The sole case now left outside is that of Income Tax, which, in my opinion, having regard to the diversity of businesses existing in the country, raises far more complicated questions than any other tax. The Solicitor-General referred to rating cases. In every one of those cases there is an appeal to quarter sessions on value.
§ Sir SAMUEL EVANSI was talking about appeals from quarter sessions.
§ Sir E. CARSONQuarter sessions is the oldest court of record in the land. It is a court of the same importance as any other. In every one of those cases you have an appeal to the court of quarter sessions, one of the most competent of courts. You will not find a single Act dealing with valuations for any purpose in this country—I have had the matter searched out—in which there is not an appeal both upon the question of fact and upon the question of law. I submit that
§ we ought not now, at a time when we are not only dealing with the ordinary tax, but with the Super-tax—which it going to add an enormous burden to large businesses—to leave Income Tax outside the question of an appeal. I appeal to the Chancellor of the Exchequer to make the practice uniform, which he will do if he accepts the Amendment of the hon. Baronet.
§ Lord ROBERT CECILI do hope the Government will not treat this matter in the way they have so far treated it. After all, what do the arguments of the Solicitor-General amount to? He does not say a word against the Amendment on its merits. He does not deny that such an appeal would be a great improvement in order to ascertain the truth and do justice. Nobody can deny it. Everybody knows that an appeal from the Commissioners to the High Court would better secure justice.
§ Sir SAMUEL EVANS dissented.
§ Lord ROBERT CECILThe Solicitor-General must really not be quite serious when he shakes his head. The right hon. Gentleman says that there is no appeal from quarter sessions, but you can always have one by way of case stated. You have an appeal at present to quarter sessions, which, though not quite equal to an appeal to the High Court, is infinitely superior to the method proposed in the Bill. The case for the Amendment is absolutely overwhelming. The only argument against putting it into the Bill is that this is 1st October. There is no other reason. If this matter had been raised at a reasonable period of the year I do not believe the Government would have resisted it for a moment. I do earnestly hope the Committee will uphold the contention of the hon. Baronet and adopt the Amendment.
§ Question put, "That the Clause be now read a second time."
§ The Committee divided: Ayes, 42; Noes, 136.
1625| Division No. 754.] | AYES. | [4.10 p.m. |
| Banbury, Sir Frederick George | Dickson, Rt. Hon. C. Scott | Harris, Frederick Leverton |
| Banner, John S. Harmood- | Faber, George Denison (York) | Harrison-Broadley, H. B. |
| Barrie, H. T. (Londonderry, N.) | Fell, Arthur | Healy, Timothy Michael |
| Campbell, Rt. Hon. J. H. M. | Fletcher, J. S. | Hills, J. W. |
| Carille, E. Hildred | Gardner, Ernest | Hunt, Rowland |
| Carson, Rt. Hon. Sir Edward H. | Goulding, Edward Alfred | Kimber, Sir Henry |
| Cecil, Lord R. (Marylebone, E.) | Gretton, John | king, Sir Henry Seymour (Hull) |
| Craig, Captain James (Down, E.) | Guinness, Hon. R. (Haggerston) | Lonsdale, John Brownlee |
| Craik, Sir Henry | Guinness, Hon. W. E. (B. S. Edmunds) | Lowe, Sir Francis William |
| Dalrymple, Viscount | Hamilton, Marquess of | M'Arthur, Charles |
| M'Micking, Major G. | Remnant, James Farquharson | Waterlow, D. S. |
| Morrison Bell, Captain | Renwick, George | Wortley, Rt. Hon. C. B. Stuart- |
| Parker, Sir Gilbert (Gravesend) | Salter, Arthur Clavell | |
| Pease, Herbert Pike (Darlington) | Talbot, Rt. Hon. J. G. (Oxford Univ.) | TELLERS FOR THE AYES.—Sir |
| Powell, Sir Francis Sharp | Walker, Col W. H. (Lancashire) | A. Williamson and Mr. Younger. |
| NOES. | ||
| Ainsworth, John Stirling | Hedges, A. Paget | Pearce, Robert (Staffs, Leek) |
| Alden, Percy | Helme, Norval Watson | Pease, Rt. Hon. J. A. (Saff. Wald.) |
| Allen, Charles P. (Stroud) | Henderson, Arthur (Durham) | Ponsonby, Arthur A. W. H. |
| Ashton, Thomas Gair | Higham, John Sharp | Power, Patrick Joseph |
| Baring, Godfrey (Isle of Wight) | Hobart, Sir Robert | Price, C. E. (Edinburgh, Central) |
| Beale, W. P. | Hodge, John | Priestley, Sir W. E. B. (Bradford, E.) |
| Beaumont, Hon. Hubert | Horniman, Emslie John | Rea, Rt. Hon. Russell (Gloucester) |
| Benn, W. (Tower Hamlets, St. Geo.) | Howard, Hon. Geoffrey | Rees, J. D. |
| Bethell, T. R. (Essex, Maldon) | Illingworth, Percy H. | Richards, T. F. (Wolverhampton, W.) |
| Bowerman, C. W. | Isaacs, Rufus Daniel | Roberts, G. H. (Norwich) |
| Branch, James | Jardine, Sir J. | Robertson, J. M. (Tyneside) |
| Brunner, J. F. L. (Lancs., Leigh) | Jones, Sir D. Brynmor (Swansea) | Roch, Walter F. (Pembroke) |
| Burns, Rt. Hon. John | Jones, Leif (Appleby) | Rogers, F. E. Newman |
| Byles, William Pollard | Kekewich, Sir George | Rose, Sir Charles Day |
| Channing, Sir Francis Allston | Laidlaw, Robert | Rutherford, V. H. (Brentford) |
| Clough, William | Lamont, Norman | Samuel, Rt. Hon. H. L. (Cleveland) |
| Cobbold, Felix Thornley | Layland-Barratt, Sir Francis | Schwann, Sir C. E. (Manchester) |
| Compton-Rickett, Sir J. | Lever, A. Levy (Essex, Harwich) | Seddon, J. |
| Cooper, G. J. | Lewis, John Herbert | Seely, Colonel |
| Corbett, A. Cameron (Glasgow) | Lloyd-George, Rt. Hon. David | Shackleton, David James |
| Corbett, C. H. (Sussex, E. Grinstead) | Lupton, Arnold | Sherwell, Arthur James |
| Cornwall, Sir Edwin A. | Lynch, A. (Clare, W.) | Shipman, Dr. John G. |
| Cotton, Sir H. J. S. | Lynch, H. B. | Snowden, P. |
| Dickinson, W. H. (St. Pancras, N.) | Macdonald, J. M. (Falkirk Burghs) | Stanger, H. Y. |
| Dunn, A. Edward (Camborne) | Macnamara, Dr. Thomas J. | Steadman, W. C. |
| Dunne, Major E. Martin (Walsall) | Macpherson, J. T. | Stewart, Halley (Greenock) |
| Edwards, Sir Francis (Radnor) | MacVeigh, Charles (Donegal, E.) | Stewart-Smith, D. (Kendal) |
| Elibank, Master of | M'Callum, John M. | Straus, B. S. (Mile End) |
| Essex, R. W. | Maddison, Frederick | Tennant, H. J. (Berwickshire) |
| Esslemont, George Birnie | Mallet, Charles E. | Thorne, William (West Ham) |
| Evans, Sir S. T. | Markham, Arthur Basil | Toulmin, George |
| Everett, R. Lacey | Marnham, F. J. | Verney, F. W. |
| Ferens, T. R. | Massie, J. | Vivian, Henry |
| Foster, Rt. Hon. Sir Walter | Masterman, C. F. G. | Wadsworth, J. |
| Gibb, James (Harrow) | Mond, A. | Walker, H. De R. (Leicester) |
| Gladstone, Rt. Hon. Herbert John | Montagu, Hon. E. S. | Ward, W. Dudley (Southampton) |
| Glendinning, R. G. | Morse, L. L. | Wason, Rt. Hon. E. (Clackmannan) |
| Goddard, Sir Daniel Ford | Murphy, John (Kerry, East) | Wason, John Cathcart (Orkney) |
| Gooch, George Peabody (Bath) | Murray, Capt. Hon. A. C. (Kincard.) | Watt, Henry A. |
| Greenwood, G. (Peterborough) | Myer, Horatio | Weir, James Galloway |
| Gulland, John W. | Nicholson, Charles N. (Doncaster) | White, J. Dundas (Dumbartonshire) |
| Harcourt, Robert V. (Montrose) | Nugent, Sir Walter Richard | White, Sir Luke (York, E.R.) |
| Harmsworth, Cecil B. (Worcester) | Nuttall, Harry | Yoxall, Sir James Henry |
| Hart-Davies, T. | O'Kelly, Conor (Mayo, N.) | |
| Haslam, Lewis (Monmouth) | Parker, James (Halifax) | TELLERS FOR THE NOES.—Mr. Fuller and Mr. Whitley. |
| Hazel, Dr. A. E. W. | Paulton, James Mellor |
§ Mr. RUPERT GUINNESS moved to insert the following:—