115 F.2d 162 | 3rd Cir. | 1940
We are being asked to disagree with the dictum of the United States Supreme Court
That test (successful for the taxpayer
The injustice here complained of proceeds from the obverse of the medallion. The petitioner feels that the incidence has fallen upon it and accordingly that it should recover the unjust enrichment. Its feelings can be expressed in the words of the writer of a law review note who commented on one of the Circuit Court of Appeals cases above cited, F. & F. Laboratories v. Commissioner, 7 Cir., 104 F.2d 563, in the following language :
“The right of the petitioner to recover in the instant case was dependent upon
This contention overlooks several things. The recovery of illegally paid taxes is solely a matter of governmental grace. It is true that the element of compulsion takes it out of the ancient rule of payments under a mistake of law (the practical reason underlying this seemingly harsh doctrine stems from a preference for making the citizenry and not the courts certain of the law). It is also true, however, that mistakes in favor of the sovereign, whether of law or fact, have the same quality that inheres in other dealings with supremacy. As the state taketh away, so it giveth back, and all we can do is bless the name of the state and hope for the best. The quality of mercy has strengthened with the quality of democracy and of late years the recovery of illegal taxes has received both legislative and judicial impetus.
That impetus has not extended to the circumstances of the principal case. The statute is explicit in its inclusion of the specific word “tax”. It could have stopped, but did not, with the use of the more general term “amount”.
It is not our business to uphold the wisdom of the Congress. Since, however, the petitioner stresses what he feels to be a patent unfairness, we might add this. Congress has chosen that the revenue should deal on recovery, as on payment, with the only person with whom it deals at all, the taxpayer. It has only made certain that such person has a case in good conscience. That does not mean it wishes the Treasury to deal with all others having cases in good conscience. As we have seen, that equity depends on incidence and is hard enough to determine in any particular case. If all the alleged sufferers are to be given access to the till, the difficulty of determination becomes insuperable. On what is known as the “diffusion theory” of taxation every inhabitant is affected and so theoretically eligible for a refund.
The order of the United States Processing Tax Board of Review dismissing the petition is affirmed.
Anniston Mfg. Co. v. Davis, 301 U. S. 337, 350, 57 S.Ct. 816, 81 L.Ed. 1143.
F. & F. Laboratories v. Commissioner, 7 Cir., 104 F.2d 563; Oswald Jaeger Baking Co. v. Commissioner, 7 Cir., 108 F.2d 375; Zinsmaster Baking Co. v. Commissioner, 8 Cir., 109 F.2d 738.
United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914.
White, The Case of the Processors v. The People, 22 Virginia Law Review 546.
United States v. Jefferson Electric Mfg. Co., 291 U.S. 386, 402, 54 S.Ct. 443, 78 L.Ed. 859.
Seligman, The Shifting and Incidence of Taxation 2d Ed.; Silverman, Taxation: Its Incidence and Effects.
Windfall Tax and Refund Provisions of the Revenue Act of 1936, 50 Harvard Law Review 477, 480 (note); Taxation— Sales Taxes — Vendor as Agent or Taxpayer, 87 University of Pennsylvania Law Review 242 (note); Sales — AAA—Tax Refunds — Rights of Purchaser Against Processor, 5 University of Chicago Law Review 152 (note); Priority of City’s Claims for Sales, Taxes Collected by Bankrupt Vendor, 46 Vale Law Journal, 164 (note); Taxation — Collection and Enforcement — Right of Retailer to Funds Collected from Consumers Under Illegal Sales Tax, 52 Harvard Law Review 330 (note); Retail Sales Tax — Sale of Materials to Shoe Repairer as Wholesale Sale, 49 Harvard Law Review 662 (note); Creditors’ Rights — Section 64 of the Bankruptcy Act, 11 U.S.C.A. § 104— City’s Right to Preference for Money Owed Under City Sales Tax by Insolvent Vendor, 36 Columbia Law Review 1356 (note); Johnson, AAA Refunds: A Study in Tax Incidence, 37 Columbia Law Review 910.
Field, The Recovery of Illegal and Unconstitutional Taxes, 45 Harvard Law Review 501, 506, 515.
The exact language of the statute is: “No refund shall be made or allowed, in pursuance of court decisions or otherwise, of any amount paid by or collected from any claimant as tax under the Agricultural Adjustment Act [this chapter], unless” etc. See. 902, Conditions on Allowance of .Refunds, 7 U.S.C.A. § 644.
Cases are collected in 41 Words & Phrases, Perm.Ed., p. 116 et seq.
The Learned Court of Appeals for the Seventh Circuit, F. & F. Laboratories v. Commissioner, 104 F.2d 563, at page 566, above cited, reinforces this argument in pointing out that Section 907, 7 U.S. C.A. § 649, relating to presumptions and burdens of proof and to the tax paid, is inconsistent with a refund to anyone other than the taxpayer.
Silverman, Taxation: Its Incidence and Effects, p. 90.
Johnson, AAA Refunds: A Study in Tax Incidence, 37 Columbia Law Review 910, above cited, sub-heading IV, The Economics of Tax Incidence, p. 924.