Scottish Court of Session Decisions

Dugald M'Innes, wine and spirit merchant, 15 Rue-End Street, Greenock, appealed to the General Commissioners against an assessment to inhabited-house-duty made upon him for the year 1884–85, amounting to £2, 2s. 6d., being inhabited-house-duty at 6d per £ on £85, the annual value of a shop, store, and dwelling-house at 15 Rue-End Street, of which he was the proprietor and occupant. In the valuation-roll of the burgh of Greenock the annual value of the shop and store was entered at £65, and the dwelling-house at £20.

The facts stated in the Case for the Court were:—“The premises in respect of which the assessment is made consist of a building of two storeys and attics fronting Rue-End Street, and a back building of one storey. At the east end of the buildings there is an open close or passage leading from Rue-End Street to a door situated at the back and bottom of a turnpike stair, by which stair common access is obtained from Arthur Street to a property of three storeys in that street also belonging to the appellant M'Innes. Between the front and back building there is a court opening from the said close or passage, a portion of which at the inner end has been covered. The ground floor of the front building is occupied by the appellant as a shop, with a front entrance from Rue-End Street and a back entrance from the said court through the portion thereof covered as aforesaid. This back entrance not only gives access to the said shop, but also affords access by a back door to another shop, also occupied by the appellant in the aforesaid property in Arthur Street belonging to him, separately entered in the valuation-roll at a rental of £16, but not included in the present assessment. Both shops have a common entrance from the said court, and have internal communication with each other under the portion of the court covered as aforesaid. The first floor and attics of the premises assessed are occupied by the appellant as a dwelling-house. Access is obtained to the first floor by an open and uncovered stair from the said court, and to the attics by an internal stair leading from the first floor. The back building is occupied as a store or cellar entered by a door from the said court. There is internal communication by a door between the said store or cellar and the shop in Arthur Street. The appellant has thus access from the shop to the house, and also to the stores or cellars, without going into the open close or passage here referred to, but there is no communication between the shop and the house except by means of the said outside stair from the court.”

M'Innes contended that the assessment should be restricted to the house, the annual value of which was £20, on the ground that there was no internal communication between the house and the shop; that the shop and store were only part of one tenement, which consisted of these subjects and the shop in Arthur Street; that the said tenement was used solely for business premises, and was part of a property which was divided into and let in different tenements, and as such he was entitled to exemption from duty thereon under the Customs and Inland Revenue Act 1878, sec. 13, sub-sec. 1; also under the second sub-section of section 13 of the same Act, as the house fell under the designation of a house or tenement according to the meaning of these words in that sub-section.

The Surveyor of Taxes contended that the shop in Rue-End Street and the dwelling-house above it formed one inhabited house in the sense of the Act; that the said shop with the store or cellar behind was attached to the dwelling-house, and that these premises being entirely occupied by the appellant he was liable to the assessment under rule 3 of Schedule B, 48 Geo. III. cap. 55.

The Surveyor further maintained that the division of a dwelling-house into different tenements, when such tenements remain in the occupation of the owner, has no effect upon the liability to inhabited — house — duty, and that the premises assessed not being divided into and let in different tenements, the exemption contained in section 13, sub-sec. 1, of the Customs and Inland Act 1878 (41 Vict. cap. 15), did not apply, and neither did the exemption in sub-sec. 2, the house not being occupied solely for trade or business purposes.

The Commissioners confirmed the assessment.

M'Innes took a Case.

Argued for him—Although the house was not let out to separate tenants, yet it was structurally divided, and was capable of being

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separately let, while by far the larger portion of the tenement thus structurally divided was used solely for business purposes. The decision of the Commissioners ought, accordingly, under subsections 1 or 2 of section 13 of the Revenue Act of 1878, to be reversed.

Authorities— Scottish Widows Fund v. Solicitor of Inland Revenue, Jan. 22, 1880, 7 R. 491; Russell v. Coutts, Dec. 14, 1881, 9 R. 261; Corke v. Brims, July 7, 1883, 10 R. 1128; Nisbet v. M'Innes, July 15, 1884, 11 R. 1095; Allan v. Thomson, July 15, 1884, 21 S.L.R. 741.

Replied for the Surveyor of Taxes—The case did not fall under the exempting clauses. (1) It did not fall under sub-section 1, because the building was not let out in separate tenements; (2) and it did not fall under the second sub-section, because the house which the appellant occupied himself was not occupied solely for business purposes, but partly as a dwelling-house.

Authority— Union Bank v. Solicitor of Inland Revenue, Feb. 2, 1878, 5 R. 598.