§ (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 362 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.363
§ (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 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.
§ Clause brought up, and read the first time.
§ Sir A. WILLIAMSON
I beg to move, "That the Clause be read a second time."
When the Income Tax law was first passed in 1842 there was considerable fear in the mind of the public as to the publicity which might ensue with regard to the finances and means of individuals, and it is probable that, owing to that fear of publicity, the law provided that appeals from assessment should be heard by the Commissioners, of whom there were two, and by them alone. No option was given to anyone who was dissatisfied with the assessment levied upon him to go to the Courts with his appeal; he was forced to go to the Commissioners. As I understand it, when the Commissioners hear a case they are in the habit, after hearing the aggrieved taxpayer, of letting the appellant leave the room while they consult privately with the surveyor, who is, in effect, the defendant in the case. If that is a correct statement of what takes place, it seems to me a very unfair and unreasonable procedure as against a private individual. The Income Tax law is undoubtedly full of intricacies, and it is very difficult for even the most subtle intellects of the country to decide certain cases which come up for decision. There have been to my knowledge cases of a very intricate and involved nature brought before the Commissioners. When a case is heard by the Commissioners, if the decision is adverse to the taxpayer, the latter may desire to appeal to the Courts. In that case the Commissioners are asked to state a case. As I understand, the case is generally 364 drawn up by the clerk to the Commissioners, who is very likely a local solicitor, and who, not unnaturally, does not wish to see a decision which has been arrived at reversed. What is stated is very often that "the Commissioners, having investigated the facts, found as follows." The consequence is that the aggrieved taxpayer has no chance of succeeding in the Courts, because the Courts at once say, "The Commissioners have inquired into this matter, and found on the facts. As we can only decide on questions of law, you have no case to bring before us at all." The position of the taxpayer and the whole view of Income Tax have very much changed since 1842, and if there are people who desire to have their cases heard by the Courts, both as to facts and as to law, I cannot understand why that right should be refused to them. Such a proposal can no doubt be justified, not only because of the procedure of the Commissioners themselves, but also on the ground that some of the cases are of a most intricate and difficult nature. I believe I speak the mind of many who are interested in this matter when I say that it would be very desirable that such a Clause as I now propose should be accepted, so that questions arising upon the assessment of any individual could be investigated, as regards both the facts and the law, in the Courts.
§ Mr. BIGLAND
I have much pleasure in seconding this Amendment. Like my hon. Friend, I feel that matters have changed very much One reason why I am glad to second the Amendment is that even those who have drawn up our Acts of Parliament have stated—it was even stated in the House this afternoon—that it was not for a Minister to give an opinion upon an Act of Parliament. If it is so difficult for one of our Ministers to give an opinion upon an Act of Parliament, it is very difficult for a Commissioner to give a positive opinion upon an Act. These amounts now have come to be such enormous sums that I think it is right for the Government to accept this new Clause. If a case has been taken to one of the higher Courts it will form the basis upon which the Commissioners in future will be able to decide cases. Applicants then will realise that there is a fair decision given. There are many business men in my experience who feel a great deal of dissatisfaction. They wonder whether they have always been able to get justice in the manner in which these claims are now heard and decided. 365 I have a great deal of confidence in saying to the Government that it would have the good wishes of the mercantile world in this country if this Clause were added. I see one difficulty to which the Chancellor of the Exchequer may refer—that is, that it may involve the Government in an enormous number of lawsuits. Whether that objection is a valid one or otherwise, I do not know; whether there will throughout the country be many who will defend these cases and carry them up to the High Court, I do not know. But it is right that we as Englishmen should always have the consciousness that we have got full justice, especially in regard to the payment of taxes.
§ Mr. LLOYD GEORGE
This suggested new Clause involves a very serious departure in law and practice in regard to the assessment of Income Tax. At the present moment the Court of Appeal deals with questions of law. Whether the procedure by which you get to the Courts is good or bad is a matter for argument. I know something about the statement of special cases, and I have always felt that there has been a grievance in the matter of stating special cases from magistrates. It is even true in respect to County Court judges, because you are appealing against the statement of facts which the judge has entered in his notebook. That, however, is an objection that applies not merely to this particular kind of appeal, but to most cases of appeal from the inferior Courts. The facts are stated by the very judge against whose decision you are appealing. That seems to call for reconsideration as to the basis of appeal. But that is a matter I should be very sorry to see considered merely in connection with the Income Tax Commissioners—and that is the point which my hon. Friend is seeking to cover by this Amendment. The Amendment goes far beyond that. He proposes that you are to have an appeal not merely on questions of law, but on questions of fact. I cannot conceive anything more disastrous from the point of view of the Income Tax machinery, and I cannot conceive anything more disastrous from the point of view of the Courts. The Courts hitherto have not merely decided questions of law, but upon the facts which are presented to them, and they, it is suggested, are to retry complicated questions of fact!
§ Mr. LLOYD GEORGE
My hon. Friend says "Hear, hear!" If you want to double the number of judges that is the way to do it. What does the proposition mean? It naturally means, of course, that this method of procedure would not really be open to the ordinary Income Tax payer. It would be available for the men who had large sums of money involved. It might be worth their while to pursue the matter. It certainly would not be worth the while of the ordinary trader or professional man to have a retrial in the higher Courts, with counsel, witnesses, and all the ordinary machinery of litigation, for the purpose of trying a question of fact. It would be a ruinous temptation to such men, and I hope it will not be put in their way. I do not say that the present system is the best one, but, on the whole, it has worked fairly. There is a good deal to be said about the method of appointing Commissioners. My hon. Friend has criticised the method of appeal. He said you are practically appealing to the defendant in the case. You are not doing that.
§ Mr. LLOYD GEORGE
I do not think you are consulting him quite. I think it is perfectly impartial. I have entered into this matter before; you go before another Commissioner altogether. [HON. MEMBERS: "Where do we come in?"] I do not think my hon. Friends below the Gangway would be very anxious to keep up the opportunities for litigation. As a matter of fact, the only persons who would really be grateful to my hon. Friend are the lawyers. I am told that business in the High Courts is not good. There is depression in trade there. My hon. Friend has come to the rescue just at the right moment. I have no doubt that the lawyers in the High Courts will be so grateful that they will be proposing to erect a statue—I do not say to his memory, I hope that is a long way off!—but they will be exceedingly obliged to him for this proposal. It is a proposal to provide them with what will be an increased income, subject to Income Tax, that comes from the direction of the Inns of Court. They do very well out of it. But the Income Tax payer, with the exception of the men who have very large incomes—and companies perhaps—would not think it worth their while to have a rehearing of these cases. It would only be the means of embarrassing the Commissioners in the collection of the 367 taxes. It would enormously increase litigation. It would bring about very considerable delay. When you proceed to appeals of this kind it takes a very long time before they are settled.
§ Mr. LLOYD GEORGE
Then it would take the Court of Chancery about thirty years, judging by the comparative rate, or speed, at which these cases are settled as between the Income Tax Commissioners and the High Court judges. I am not sure that I would be in order in speaking on the question of fact, but on questions of this kind I would often rather have the judgment of these Commissioners than that of many judges of the High Court. I cannot enter upon that without perhaps getting within some rule of order. My own experience of many of these cases does not encourage me to extend the area of operations of the Judges of the High Court. I think, therefore, my hon. Friend had better be satisfied with the opportunities of litigation which are afforded him by the Act of 1842, and other Acts. I should have thought they were ample for most of the subjects of His Majesty in this Kingdom. I hope he will not extend the area of temptation in this respect which might lead many poor tradesmen and professional men to ruin. I am sure he would not like to have that on his conscience! I therefore appeal to him in the interests of the general repose of mind that he limits the temptation that would be there if this Clause were added to this particular Finance Bill. I appeal to him in the interests of his composure that he will withdraw his Amendment.
§ Question, "That those words be there inserted," put, and negatived.