§ LORD CLIFFORD OF CRUDLEIGH rose to ask His Majesty's Government for what reason the Commissioners of Inland Revenue refuse to make public the interpretation they put on subsection 5 of section 20, Finance Act, 1909–1910, or to state what kind of clays are, in their opinion, not included in the exceptions of "common clay and common brick clay."
§ The noble Lord said: My Lords, I have put this Question on the Paper because it seems to me that the method of procedure involved is one to which public attention should be called. The facts of the matter are those. The section of the Finance Ac[...] to which I allude excludes from the definition of minerals all common clay, common brick clay, common brick earth, or sand, chalk, limestone, or gravel. It is not. I think, unnatural for any one making a return and coining in contact with this exception to ask the Commissioners of Inland Revenue for some information as to the way in which they intended to construe the section. Accordingly I wrote to the Commissioners and asked them to give me some kind of definition of what they considered common clays. I expected to get an answer to the effect that they considered that clays which paid more than a certain amount were in the category of uncommon clays. or that they had taken some geological line of difference between the nature of one clay and another. To this request, however, I got no satisfactory reply.
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I then endeavoured to extract information from them by suggesting that clays worked in the ordinary way were common clays, but this they disputed; and then I received this letter—
I am directed by the Board of Inland Revenue to acquaint you that they do not feel justified in giving an answer in general terms which might commit them in advance to a definite course of action in individual cases, the facts and circumstances of which have not been laid before them. In these circumstances, beyond observing that all unworked clay must be regarded as normally liable to Mineral Rights Duties unless it is shown to fall within the exceptions in the subsection, the Board do not feel that they can usefully add anything.
§ The Commissioners, therefore, stand in this position, that every person who has any mineral to which this exception might possibly refer is obliged to appeal because he cannot get any answer from the Commissioners as to the interpretation they are 215 going to put upon these exceptions. In addition to that, it is quite impossible for one person to know whether the clay in which he is dealing is going to be treated in the same way as clay belonging to another person and very possibly competing in the same trade.
§ This is establishing—and I suppose to that extent we ought to feel flattered—a small Finance Act individually for each of us; but it seems to me, in consonance with the common principles of taxation, that the rules of taxation should be clear and should be the same for all. The method of taxation here seems to be determined entirely by the Commissioners' own opinion, and there are no means by which any body of taxpayers can bring their decision generally before the Courts of law because the Commissioners openly say in the letter that they are going to judge each individual applicant by a rule entirely for himself and for himself alone. If this is going to be the practice, it is a serious innovation. I have therefore ventured to call your Lordships' attention to it, and to ask His Majesty's Government whether they cannot see some way of giving an explanation of this exception which may be intelligible to all and applicable to all to whom the exception in the Act refers.
LORD DENMANMy Lords, I do not think there is any innovation, as the noble Lord appears to think, in this matter. I will read to the House the subsection of the Finance Act to which the noble Lord refers. it runs—
The Mineral Rights Duty shall not be charged in respect of common clay, common brick clay, common brick earth, or sand, chalk, limestone, or gravel.The question whether any particular kind of clay falls within this exception is one which has to be dealt with as it arises, and for this reason. I am informed by the Inland Revenue that there are hundreds of different kinds of clay, and that it would be impossible to frame a definition as to what clays come within the term "common clay and common brick clay." The Commissioners of Inland Revenue decide the question in each case which comes before them, having regard to the composition of the clay, the use to which it is put, and the rate of royalty in respect of it, and in cases of doubt they take expert geological advice. If the taxpayer is dissatisfied with the decision of the Commissioners, 216 his proper course is to appeal to a referee in the manner provided by Section 33 of the Finance Act and the rules made under the section. I may add that the referees were appointed for the express purpose of deciding such cases as those to which the noble Lord has referred.
LORD DENMANI cannot state whether the referees will publish the reasons why they arrive at any decision. I will make inquiries as to what the exact practice of the referees is. I will, of course, undertake to convey what the noble Lord has said to the Commissioners of Inland Revenue, but I cannot hold out any hope that they will alter what is their practice, because, for the reasons I have stated, it is absolutely impossible that they can frame a definition that will cover all the different kinds of clay with which they may have to deal.
§ LORD AVEBURYMy Lords, it seems to me that the argument of the noble Lord who has just sat down is no answer to my noble friend, but rather strengthens the case which he has brought before the House. In the first place, the noble Lord tells us that there are many kinds of clay. Well, I should have thought that made it all the more desirable that the kinds of clay liable to duty should be distinguished from those not liable to duty. Then the noble Lord said that the main points on which the Commissioners determine the matter were the composition of the clay, the use to which it is put, and the price paid for the clay. There is no great difficulty in determining the composition of the clay. Clay is alumina mixed with a larger or smaller proportion of impurities, and it would be easy to say that clay containing a certain proportion of alumina should not be taxed. Then as to the use made of it, it might be provided that any clay used for making ordinary bricks would not be liable to duty; and as to the price paid for the clay, it would be quite easy to say that no clay which was sold below a certain price would be liable to the duty. I submit, therefore, that the reasons which have been given for not complying with the request of the noble Lord who brought forward this question were really not germane to the point, but that if anything they go to strengthen his case.