The opinion of the court was delivered by
In this appeal E. H. Macy & Co., Inc. (“Macy” hereinafter) seeks a review of a decision of the Division of Tax Appeals rejecting its complaints against revision by the Division of Taxation of its reported net worth for purposes of the Corporation Business Tax Act (N. J. 8■ A. 54:10A-1 et seq.) for the privilege years 1956, 1957 and 1958 (base years ending December 31, 1955, 1956 and 1957, respectively). The resulting deficiency assessments for the respective years in question were $4,816.79, $6,524.09 and $7,167.03.
The statute referred to is a corporation franchise tax act, enacted by L. 1945, c. 162, and applicable both to foreign corporations transacting business in this State, like Macy, and domestic corporations. Basically, it imposes a tax measured by a low rate against the taxpayer’s book net worth. The act contains allocation formulae for corporations which maintain regular places of business outside New Jersey, but no problem is presented with relation thereto in this case.
The reassessments by the Division of Taxation disputed in this case involve three items: (a) a substitution of “Eifo” in the place of “Lifo” costs (both terms are explained hereinafter) in determination of inventory values; (b) a revision downward of bad debt reserves; and (c) a disallowance of
Certain other attacks upon the action of the Division of Taxation and upon the tax statute, only incidentally affecting the meritorious questions mentioned above, have been made' by Macy. All of these matters are considered in the course of this opinion.
I. Inventories
Macy’s franchise taxes were required to be assessed upon the basis of its books as of the end of a calendar or fiscal year. N. J. 8. A. 54:10A-4(d)- For the tax years, here in question, 1956, 1957 and 1958, Macy’s books reflected merchandise inventories, at the close of the pertinent fiscal years, as follows: July 30, 1955, $41,376,258; July 28, 1956, $47-926,103; and August 3, 1957, $55,340,189. However, Macy’s annual reports (not its tax returns), in showing these figures under “Current Assets,” and describing them as “Merchandise inventories at Lifo cost, as determined under the retail inventory method, which is less than market,” appended footnotes which stated that the said figures were, respectively, $11,893,487, $12,517,651, and $13,277,806 “less than they would have been if the first-in, first-out principle had been applied in determining cost.” The “first-in, first-out principle” mentioned is commonly described as Fifo, by contrast with Lifo, meaning the “last-in, first-out principle.”
These terms, according to the expert proofs in this case and standard accounting texts, have the following meanings. In
There are other systems for pricing inventory recognized as acceptable from the standpoint of sound accounting principles, such as average cost, weighted average cost and specific identification, but these do not bear upon the issues herein. Two other matters discussed in the evidence in this case also appear not to be directly material to determination of the precise issue before the court. The first is that inventory costs, within the Lifo principle, are arrived at by Macy by the “retail inventory method”; tire second, that all sound inventory accounting, including Macy’s method, aims to reflect “cost or market, whichever is lower.”
In the letter of reassessment from the Corporation Tax Bureau of the Division of Taxation to the taxpayer readjusting the values for the years in question, the treatment of inventory is explained as follows: “Inventory reserve is disallowed inasmuch as the Bureau deems inventory values to be the most recent cost to the date of the Balance Sheet.” The readjustment made was to substitute the Eifo figures as shown in the footnotes of the annual reports for the Lifo figures shown on the balance sheets. The representative of the Bureau testified that the determination was that the Eifo valuations were “a closer approximation of the fair value of the inventories.”
Resolution of the dispute here presented requires construction of the statute. N. J. 8. A. 54:10A—5 imposes a franchise tax computed upon that portion of the “entire net worth” of the corporation allocable to this State multiplied by the applicable rates. N. J. 8. A. 54:10A-4 defines “net worth” as follows:
“(d) ‘Net worth’ shall mean the aggregate of the values disclosed by the books of the corporation for (1) issued and outstanding-capital stock, (2) paid-in or capital surplus, (3) earned surplus and undivided profits, (4) surplus reserves which can reasonably be*163 expected to accrue to holders or owners of equitable shares, not including reasonable valuation reserves, such as reserves for depreciation or obsolescence or depletion, and (5) the amount of all indebtedness owing directly or indirectly to holders of 10% or more of the aggregate outstanding shares of the taxpayer’s capital stock of all classes, as of the close of a calendar or fiscal year. However, if in the opinion of the commissioner, the corporation’s books do not disclose fair valuations the commissioner may make a reasonable determination of ihe net worth which, in his opinion, would reflect the fair value of the assets carried on the books of the corporation, in accordance with sound accounting principles, and such determination shall be used as net worth for the purpose of this act.”
The act was changed in certain respects, effective beginning with the year 1959, L. 1958, c. 63, but the definition of “net worth” was not altered.
Since merchandise inventory is an asset entering into the aggregate of components (1) through (4) of the foregoing listed constituents of “net worth,” Maey does not contend that a lawful redetermination of inventory would not result in a proper recomputation of the tax base. But it does challenge the lawfulness of the re determination of inventory here made.
Expert accountancy testimony on both sides at the hearing before the Division of Tax Appeals was in agreement that both Elfo and Lifo were accepted methods of determining inventory costs for a retail merchandising business such as Macy’s, “in accordance with sound accounting principles.” The expert for the State testified that under the Lifo method the inventory is valued “at the costs that were prevalent at the time that the Lifo cycle commenced, which would be in the most distant past * * *. They would be the ancient or former costs rather than the current costs.” In essence, the expert for the taxpayer was in agreement as to this. In the opinion of the State’s expert the determination of the taxing authorities to utilize the Eifo valuations in this case was a “reasonable determination reflecting the fair value of the inventory assets carried on the books of the corporation,” and one “in accordance with sound accounting principles.”
The opinion of Macy’s expert was that “there is only one balance sheet in accordance with sound accounting principles”
In sustaining the position of the Division of Taxation, the opinion of the Division of Tax Appeals states:
“No witness has testified that the determination of respondent is not fair value. Indeed, the witnesses all agree that Rifo method more closely approximates market value than the Lifo method. Market value usually is deemed to be fair value.”
Macy formulates its argument on this appeal by assuming that, the reassessment by the Division of Taxation is based on the foregoing expression of rationale by the Division of Tax Appeals, i. e., that it equates “fair value” of inventory with “market value.” It then attacks that equation by contending, on the basis of legislative history, that the Legislature did not intend to permit the Tax Division Director to use market value as a basis for establishing “fair valuations” of the assets “in accordance with sound accounting principles.”
But the flaw in this attack is that the evidence shows that the Corporation Tax Bureau of the Tax Division did not purport to revalue inventory on a “market value” basis, but rather, as indicated above, on the basis of Macy-supplied Eifo figures determined to-be preferable because representing “the most recent cost to the date of the Balance Sheet” (emphasis added). Eor reasons to be stated hereinafter, it is our view that the intent of the act is to require whatever “fair valuations” are arrived at by the Director to be consistent with sound accounting principles, and that such principles would preclude raising balance sheet inventory costs, whether Lifo or Eifo, to market value. So far as the opinion of the Division of Tax Appeals implies the contrary, we disagree with it.
Thus, the real issue presented is whether the statute permits the Tax Division Director to revise a taxpayer’s inventory asset valuations for franchise tax purposes from Lifo to Pifo costs in such circumstances as here shown, or whether the taxpayer’s decision to operate on a Lifo basis for general accounting purposes compels the Director to accept its Lifo inventory costs as conclusive of “fair value” in assessing the tax.
The genesis of the Corporation Business Tax Act (1945) is found principally in the general dissatisfaction with the then existent laws for the ad valorem taxation of intangible personal property. Those required the local taxing district in which the principal office of a corporation was located to tax all of its intangible personal property of whatever nature, subject to stated exemptions, and at general local tax rates. Literal enforcement of the law would have involved prohibitive tax burdens, and unfair enrichment of the taxing district involved. Although the tax act was therefore generally ignored, the threat and occasional actuality of enforcement created a fear of “tax lightning.” See Duke Power Co. v. Somerset Co. Board of Taxation, 124 N. J. L. 481 (Sup. Ct. 1940), affirmed 125 N. J. L. 431 (E. & A. 1940); Duke Power Co. v. State Board of Tax Appeals, 129 N. J. L. 449 (Sup. Ct. 1943), affirmed 131 N. J. L. 275 (E. & A. 1944). This situation led to the creation in 1944 by legislative joint resolution of a Commission on Taxation of Intangible Personal Property. That body submitted a report March 26, 1945, which, among other things, recommended the abolition of taxation of intangible personal property as such and the imposition on all corporations of-a corporation business tax, conceived as a franchise tax, measured basically by net worth allocable to New Jersey in lieu both of the former ad valorem, taxation of intangible personal property and of the then existing franchise tax based upon capital stock issued and outstanding. The Commission defined its concept of “net worth”
The bill introduced in the Legislature to implement the recommendation of the Commission, which ultimately was enacted as the statute now before us (Assembly No. 395, introduced March 27, 1945), defined “net worth” as “the fair market value of a taxpayer’s total assets less liabilities (in the determination of which the commissioner may consider book value, earnings value and the aggregate market of a corporation’s capital stock) plus * * Among the stated purposes of the bill, as recited in the “Statement” annexed thereto, was:
“(1) to establish a simple and defensible tax on corporate business in lieu of an ad valorem tax on intangible personalty and the present capital stock tax, as part of the program recommended in the Report of the Commission on Taxation of Intangible Personal Property (March 26, 1945) to eliminate ‘tax lightning’ on intangibles.”
However, as reported out of committee (Assembly Minutes, April 6, 1945, p. 687), and enacted into law, the definition of net worth underwent a marked change, embodying substantially what we find in section 54:10A~4(d), as quoted above. There is no extrinsic evidence as to the reason for the elimination of the reference to “fair market value.” The only variance in the act as enacted by L. 1945, c. 162, from the present language (effected by amendment, L. 1947, c. 50), is that, as originally enacted, the provision read in part:
“However, if in the opinion of the commissioner, the corporation’s books do not disclose fair valuations the commissioner may require any additional information which may he necessary for a reasonable determination of the net worth which, in his opinion, would reflect the fair value of the assets carried on the books of the corporation, in accordance with sound accounting principles, and such determination shall be used as net worth for the purpose of this act.” (Emphasis added.)
Erom a consideration of all the foregoing, it is apparent that, as finally enacted and as the act stood in relation to the
“That the tax is assessed upon a portion of net worth does not mean that it is an ad valorem assessment upon any of the underlying properties.”
Proceeding from these premises, we are called upon to determine, at least for the purposes of passing upon what the Tax Division here did, the ambit of its authority to make "a reasonable determination of [the taxpayer’s] net worth” which would reflect "the fair value of the assets carried on the books of the corporation, in accordance with sound accounting principles.” Unless this enabling provision is sheer surplusage, an hypothesis we will not entertain unless no other is reasonably inferable from the legislative language, Abbotts Dairies v. Armstrong, 14 N. J. 319, 327, 328 (1954), the face of section 54:10A-4 conveys the thought that the net worth of the assets appearing on the books of a particular corporate taxpayer may represent something other than "fair valuations” thereof, and that the Tax Director may in such case, in assessing the franchise tax, revise the book figures to reflect "fair value of the assets,” providing, however, that his resulting readjustment of the figures is “in accordance with sound accounting principles.” If, as Maey argues, “fair value” in the statute simply means "value as disclosed by the
Abstractly, the term “fair value” has no fixed meaning; it generally takes color from the context in which used or applied. In terms of constitutional and statutory requirements for the taxation of real property at true value (generally understood as market or exchange value), for example, courts have sometimes equivalently referred to the standard as “fair value.” Plainfield v. State Board of Tax Appeals, 126 N. J. L. 407, 408 (Sup. Ct. 1941). The same equivalence of meaning has been entertained in passing upon the fair value to be credited a mortgagor on a deficiency claim after foreclosure. Fidelity Union Trust Co. v. Ritz Holding Co., 126 N. J. Eq. 148, 149 (Ch. 1939). See also Jamouneau v. Local Government Board, 6 N. J. 281, 293 (1951).
We have recent evidence of the legislative capacity to write a tax statute wherein the taxpayer’s book values are accepted as representing presumptively the taxable “fair value” of the property, subject to administrative regulation by uniform rules for the determination and reporting of factors entering into book values, such as costs and depreciation. L. 1960, c. 51; N. J. S. A. 54:4U2.29 (dealing with the ad valorem taxation of tangible personal property used in business). Compare the provision in the same statute (N. J. S. A. 54:4^9.1) for taxation of tangible personal property not used
The circumstance that the 1945 Legislature failed to define “fair valuations” in the Corporation Business Tax Act with the precision that a later Legislature did in relation to an entirely different kind of tax statute, but only by implication from the context of the act, will not justify the court in confining itself to the alternatives of meaninglessness or unconstitutional vagueness of standard, as in effect argued by Macy in this case. The court can and should look for clarification of meaning of statutory standards where discernible from the whole of the specific or cognate statutes. See Ward v. Scott, 11 N. J. 117, 123 (1952).
We are not called upon here to explore and delineate the whole potential range of applications of the standard, “fair value of the assets carried on the books of the corporation, in accordance with sound accounting principles,” in the act under construction. We have but to determine whether a reasonable and rational interpretation of the phrase, in the light of the purposes and objects of the act as a whole, permitted the Division of Taxation to do what it here did in relation to readjusting the values of inventories. We decide that question in the affirmative.
Of the two generally recognized principal purposes of financial statements under sound accounting, reflection of income and reflection of current worth, Finney and, Miller, Principles of Accounting, op. cil., supra, at p. 1, the statutory section here involved is obviously concerned with the second, not the first. And since reporting of net worth under the act is made as of the close of the taxpayer’s annual accounting period next preceding the commencement of the tax year for which the tax is payable, a selection of asset valuations more proximate in time to that date would appear reasonably
Macy showed on its books as an asset for each of the franchise tax years here in question a $9,018,699 federal income tax refund claim for the six income tax years ending January 1947. The claim against the United States was based on the contention that Macy’s taxable income for those income tax years should have been permitted to be computed by using the Lifo method of costing closing inventories. On May 12, 1958 there was an adverse decision as to the 1942 claim, R. H. Macy & Co., Inc. v. United States of America, supra, and on December 11,1961 as to the 1943-1947 claims, R. H. Macy & Co., Inc. v. United States of America, 202 F. Supp. 206 (S. D. N. Y. 1961). An appeal pends as to the latter claims. Both decisions were based on failure to make timely election under the federal tax regulations to use Lifo for income tax purposes for the income tax years involved.
Macy never claimed before the Director or the Division of Tax Appeals that the valuation of its assets should be reduced for franchise tax purposes by elimination of the Lifo refund claim because that claim had no value, or less value than the figure stated on its financial statements as of the dates thereof, nor does it so claim on this appeal. Its sole contention below and here is that it is inconsistent and therefore “inequitable” to retain the claim of income tax refund as an asset for franchise tax purposes at the same time that the Division of Taxation has readjusted its franchise tax obligations for 1956-1958 by rejection of Lifo in favor of Pifo inventory costs.
We find the argument without merit. There is no incompatibility at all, either in logic or fairness, between treating the income tax claim as the asset Macy’s books showed it to be and at the same time concluding that the fair value of the inventories, as such, was represented by their Pifo costs for the franchise tax years here in question. The fact that the refund claim against the Government on account of 1942-1947 income taxes was based upon an asserted right to meas
III. Bad Debt Reserves
Macjr’s accounts receivable were reported less reserves for doubtful accounts of 3.48% for 1956, 3.1% for 1957 and 2.72% for 1958. The Tax Division 'adjusted these reserves uniformly to 2.5% of receivables on the ground that “the taxpayer’s past experience with respect to bad debts” indicated the 2.5% to be “a reasonable reserve” for that purpose.
The proofs indicated that Macy’s ratios of actual write-offs of uncollectible accounts to gross receivables for the respective ye'ars in question were 1.9%, .9% and 1.24%. The average for the three years was approximately 1.1% as against the 2.5% allowed by the Tax Division in its readjustment. Average write-offs for five-year periods preceding the tax 3<-ears in question did not exceed in percentages the write-off ratios for the tax years here involved.
We have considered the argument addressed against the Tax Division’s action and find ourselves in disagreement. The most relevant criterion, although concededly not the only one, in the establishment of a reasonable reserve for bad debts, is the history of recent actual write-offs. Allied Building Credits, Inc. v. Bowers, 170 Ohio St. 334, 164 N. E. 2d 562 (Sup. Ct. 1960); S. W. Coe & Co. v. Dallman, 216 F. 2d 566 (7 Cir. 1954). We cannot find any arbitrariness in the administrative determination that 2.5% would constitute a reasonable reserve for bad debts, reflecting the fair value of the accounts receivable, consistent with sound accounting principles. After all, this allowance is almost two and a half times the corporation’s then recent actual write-off experience.
Macy argues that the reserves it had set up reflected in part its practice of repurchasing sold accounts receivable
IV. Deduction eor Debt Owing By Subsidiary
Macy’s returns for the tax years 1957 and 1958 reflected a deduction from net worth of the aggregate of the value of its stock in, and debt owing to it by, its wholly owned subsidiary, Garden State Plaza Corporation, a New Jersey corporation. It claimed the right so to do by virtue of N. J. 8. A. 54:10A-9, which provides, in pertinent part:
“Any taxpayer which holds capital stock of a subsidiary during all or part of any year may, for the purposes of the tax imposed by this act, deduct from its net worth such proportion of the average .value of such holdings less net liabilities (if any) to subsidiaries, as the ratio of the subsidiary’s taxable net worth, for the same year under this act, to its entire net worth; * * (Emphasis added.)
The Division of Taxation disallowed the deduction to the extent that it comprehended Garden State’s debt to Macy, taking the position that the deductible “holdings” mentioned in the statute meant only the capital stock in Garden State held by Macy, not debt owing to it by the subsidiary. There is no doubt in our minds, that the State’s position as to this is correct and that there is not even a shadow of ambiguity in the pertinent statutory language. The reference, “such holdings,” can only be read as relating back to the antecedent, “Any taxpayer which holds capital stoch of a subsidiar)’,” etc. (Emphasis added). Neither the administrative agency nor we may take liberties with statutory language so clearly expressed, see State v. Patfol, Inc., 76 N. J. Super. 287 (App. Div. 1962), even to subserve a supposedly desirable policy not effectuated by the act as written.
Macy does not argue that if the Director’s ruling is sustained the resulting tax is unconstitutional, nor do we believe such a position would be sound. To the extent that the argument made is offered as a guide as to the probable legislative intent, it cannot prevail against the plain statutory language to the contrary.
V. Ultra Vires
Macy contends that the redetermination of the assessment was made by the Corporation Tax Bureau in the Division of Taxation, not by the Director of the Division of Taxation, and that since there is no statutory authorization of delegation by the Director of any of his powers to any subagent or subagencjr, the reassessment is a nullity. We pass the objection by the State that this argument comes too late, not having been raised before the Division of Tax Appeals. The public importance of the issue calls for its disposition on the merits.
It is unquestionably sound law that, generally speaking, a delegated power cannot be further delegated, 42 Am. J.ur., Public Administrative Law, §' 73, p. 387, but implicit
In determining the question before us we must consider all legislation bearing upon the administrative duties, and powers of the Director of the Division of Taxation and the extent of his right to have assistance in relation thereto. Examination of all legislation in pan materia affords light on the question as to what it may reasonably be supposed the Legislature intended the Director might do in the administration of his responsibilities through agents rather than solely in propria persona.
We find only these express provisions concerning appointment or designation of assistants or deputies generally. R. 8. 54:1-8 empowers the commissioner (now Director) to appoint such “clerical, technical and other assistants as may be necessary and prescribe their duties.” R. S. 54:1-11 provides that when the Director “is unable to perform any one or more of his public duties, through sickness, absence from his office, pressure of other public business, temporary inability to act or any other cause” he may designate a deputy or deputies to perforin any or all of his duties in his stead upon filing a certificate to that effect with the secretary of state. R. 8. 54:1-12 authorizes the Director to establish and reorganize “divisions” of the department. These sections clearly do not on their face contemplate the permanent delegation by the Director of regular and continuous responsibility for performance of any particular area of the Director’s functions. Cf. Horsman Dolls v. State Unemployment Compensation Com., 134 N. J. L. 77 (E. & A. 1946).
Except for certain isolated situations, there are no statutes expressly authorizing delegation by the Director of any of his
The administrative duties involved in this complex of functions include valuation, assessment, jeopardy assessment, collection, remission or compromise of taxes or penalties, promulgation of rules and regulations, suspension and revocation of licenses in certain cases, determinations as to exemptions from taxation, determinations 'as to transfers in
If the Director may not delegate any of his nonministerial functions under the Corporation Business Tax Act because of absence of express authority therein, then it follows he may not do so under any of the other statutes imposing upon him the manifold duties and functions mentioned above, practically all of such legislation being equally devoid of express authority of delegation. That hypothesis obviously postulates a legislative intention that the Director do the impossible, since the aggregate number of transactions involving the performance of nonministerial functions in the administration of all these statutes, even excluding those few where there is express authorization for delegation, partial or total, runs hito the scores of thousands. Under the Corporation Business Tax Act alone, some 70,000 corporate returns require annual auditing and the making of the kinds of determinations illustrated by the disputes in this case.
This court will taire Judicial notice that a Corporation Tax Bureau in the Division of Taxation has administered the Corporation Business Tax Act since the inception of that tax, Just as such a bureau in predecessor state tax departments administered the previous corporation franchise tax act, faxing outstanding capital stock, for many years previously, notwithstanding such an agency was never mentioned in any statute providing for such taxes. Presumably, the Legislature has continuously known of the practice and by its failure to veto it has acquiesced therein, consented thereto, and impliedly authorized its continuance in the administration of the Corporation Business Tax Act.
We thus conclude that there is implied power in the Director to delegate to such an agency as the Corporation Tax Bureau the authority that agency exercised under his aegis to make the reassessment complained of in this case. Cf. Cammarata v. Essex County Park Comm’n, 26 N. J. 404, 411 (1958). Macy does not contend that in fact such delega
VI. Vagueness of Standard
The attack here is upon the allegedly “unbridled discretion” for redetermination vested by section 54:10A-4 in the Director constituted by the criteria that “in the opinion of the [Director], the corporation’s books do not disclose fair valuations” and “determination of the net worth which, in his opinion, would reflect the fair value of the assets” etc.
We have already in (I), above, dealt with the terms “fair valuations” and “fair value” from the standpoint of alleged vagueness of standards, and found that they had sufficient specificity of meaning, in the context of the section where found and the act as a whole, to be validly applicable tO' the dispute as to inventories. We conclude to the same effect in relation to the other asset items in contest discussed above.
Macy concentrates upon the statutory incorporation of the “opinion” of the Director in the criterion for redetermination as condemning the standard for vagueness. We cannot agree, notwithstanding the reliance upon Abelson’s Inc. v. N. J. State Board of Optometrists, 5 N. J. 412 (1950). The obvious and sensibly deduced meaning of section 54:10A-4(d) is that if in the reasonable opinion of the Director the books do not disclose fair valuations he may make a determination of net worth which in his reasonable opinion reflects the fair value of the assets in accordance with sound accounting principles. The intended criterion, it is clear to us, is the reasonable judgment of an administrator making an objective judgment in the matter, anchored by the further qualification of consistency with sound accounting principles. We regard the Abelson’s case, supra, as only superficially analogous to the issue here involved. The respective standards in the two cases, taken in entirety, are materially different, and the application of the standard in Abelson’s was in a penal setting. The decision is not con
Wo find no unconstitutional vagueness in the standards of the act before us. Cf. Oxford v. Macon Telegraph Publishing Company, 104 Ga. App. 788, 123 S. E. 2d 277 (Ct. App. 1961).
VII. Discrimination
Macy contends that it has been discriminated against in that other competitive department stores applying the Lifo method in inventory accounting without indicating their Eifo differences were not subjected to readjustment of their inventory figures, and that efforts to prove this at the hearing were rebuffed upon objection. However, there was no claim of discriminatory assessment in the petition of appeal to the Division of Tax Appeals. Such a charge would open up a broad range of factual controversy, and, accordingly, of pertinent proofs, both affirmative and defensive, since an assertion of discriminatory assessment requires proof of a deliberate or systematic scheme or plan to subject one or more taxpayers to a more onerous burden than that being applied to the generality of taxpayers. Jat Company, Inc. v. Division of Tax Appeals, 47 N. J. Super. 571 (App. Div. 1957), certification denied 27 N. J. 278 (1958). Introduction of such an issue in the case required pleading it before the Division so that the State might be prepared to meet it. This not having been done, the question of the comparative tax practices of other corporations or their treatment by the Division of Taxation was, as correctly decided below, irrelevant.
VIII. Administrative Rule-Making By Adjudication
Macy contends that the Director’s ruling as to valuation of inventories in this case constitutes the impermissible process of administrative rule-making by ad hoc adjudication of a particular ease rather than through the promulgation of general i-ules and regulations pursuant to N. J. S. A.
In any event, insofar as the argument before us is premised on the position that the Division of Taxation was powerless to exercise its statutory power to determine fair valuations of Macy’s inventories as assets, in accordance with sound accounting principles, without first adopting a general rule that all department stores must report and are to be taxed on the base of Rifo inventories, the contention is without merit. Rirst, without more evidence, we cannot say that such a rule of unvarying application in all such cases would necessarily be appropriate. Second, and more important, there is, as we- have- decided, an adequate legislative standard in this act for administrative guidance, and in such ease the development of subsidiary rules and principles on a case by case basis is not proscribed. See 3 Davis, Administrative Law Treatise (1958), § 17.08, pp. 533-538, commenting on Securities and Exchange Com. v. Chenery Corp., 332 U. S. 194, 67 S. Ct. 1575, 91 L. Ed. 1995 (1947). Compare a situation involving absence of both statutory and administrative standards and 'an attempt nevertheless to> proceed administratively by ad hoc ruling. Boller Beverages, Inc. v. Davis, 38 N. J. 138 (1963). The dictum in Mitchell v. Cavicchia, 29 N. J. Super. 11, 15 (App. Div. 1953), is not against the position of the Director. Moreover, it was there said (at p. 14) : “there is no rigid principle requiring an administrative agency to lay down rules and standards spelling out every wide grant of authority it receives.” This precept is peculiarly apposite to taxing statutes which traditionally and commonly employ valuation standards even broader than those fixed by the tax act here involved.
Judgment affirmed.