EVERSHED M.R.AS ROXBURGH J. - (1.) THIS case is concerned with the claim by the Crown to profits tax in respect of sums, now admittedly income for income -tax purposes, received by the Butterley Co. Ltd. in the years 1947, and following, from the Minister of Fuel of three kinds, namely, (1) revenue payments in respect of the years 1947 and 1948 under section 22(3) of the Coal Industry Nationalization Act, 1946 (which I shall hereafter sometimes call the Coal Act, 1946); (2) revenue payments in respect of the years 1949 and 1950 under section 1 of the Coal Industry (No. 2) Act, 1949 (which I shall hereafter sometimes call the Coal Act, 1949); and (3) other sums paid under section 22(2) of the Coal Act, 1946; in satisfaction or part satisfaction of the right to interim income conferred by section 19(2) of the last -mentioned Act. Although the payments are of the three kinds I have indicated, all of them were in respect of the right to interim income under section 19(2) of the Coal Act, 1946. So far as class (3) above is concerned, these were expressly paid towards satisfaction of that right. The revenue payments, on the other hand, are expressed in the statute to be 'in substitution for' what may be called the primary right under the Act of 1946. The revenue payments under the Act of 1949 also differed from those under the Act of 1946 in that, if the former were found to exceed what would be payable strictly by way of interim income under section 19(2) of the Act of 1946 for the given year, the recipient would be liable to be made to recoup.
(2.) NOTWITHSTANDING the above difference, it is to my mind, clear that the Crowns claim to tax should wholly fail or wholly succeed. there is, in my judgment, no sensible distinction between any of the three types of payment for present purposes, and no suggestion to that effect was made in the course of the argument on either side.
(3.) THE scheme of the Coal Act, 1946, is well known and I shall not take time in describing its general nature. It provided for the transfer, on what was called the primary vesting date - a date which was later fixed as January 1, 1947 - to the National Coal Board of the business assets, and other assets called overhead expenses increases, of the component parts then existing of the coal industry. For the assets so transferred compensation was provided under the Act to the components in the industry, of which the Butterley Co. was one. I can, with that introduction, turn at once to section 19 of the Coal Act, 1946, which, by sub -section (1), provides : 'Compensation in respect of a transfer of transferred interests or of an overhead expenses increase shall be due on the primary vesting date' - that is January 1, 1947 -'subject to determination of the amount thereof.' I pause to state that the method of determining the amount was of a complex nature, and made it clear that a considerable time would elapse before it was, in fact, finally determined. Sub -section (2) : 'For the period between the primary vesting date and the date on which any such compensation is fully satisfied there shall be a right to interim income, to be satisfied in accordance with the provisions of section 22 of this Act.' Sub -section (3) : 'Provision may be made by regulations for authorizing the partial satisfaction of such compensation - that is, the principal compensation -'before the determination of the amount thereof has been completed.' Section 20 was concerned with the persons to whom the compensation should be transferred, made over or paid; and section 21 provided for the mode of satisfaction of what I have called the principal compensation which substantially, though not exclusively, was to be by way of Government stock. I then come to section 22, which picks up, it will be recalled, sub -section (2) of section 19. By section 22(1) : 'The right conferred by sub -section (2) of section 19 of this Act to interim income for the period between the primary vesting date and the date of the satisfaction in full of compensation in respect of a transfer of transferred interests, or of an overhead expenses increase, shall be satisfied in accordance with the provisions of this section. (2) Subject to the provisions of sub -sections (3) and (4) of this section as to the revenue payments therein mentioned - (1) the said right conferred by sub -section (2) of section 19 of this Act shall be satisfied, so far as regards interim income for the period between the primary vesting date and the time when any amount of compensation in respect of a transfer of transferred interests or of an overhead expenses increase is satisfied, by making, in addition to the issue of the stock then issued in satisfaction of that amount of compensation or to the making of the money payment then made ins satisfaction of that amount of compensation, as the case may be, a money payment of an amount equal to interest for that period on that amount of compensation at such rate or rates as may be prescribed ... (b) the provisions of section 20 of this Act as to the legal and beneficial title to compensation' - that is, in effect, a reference to the persons who would be the recipients -'shall have effect in relation to additions to compensation under this sub -section' - with a substitution not material to be read.;