Scottish Court of Session Decisions

At a meeting of the Commissioners of Income-Tax for the district of the City of Edinburgh, held on 17th April 1889, Robert Adam, City Chamberlain, as Treasurer of Police, appealed against an assessment made on the Lord Provost, Magistrates and Council of the City of Edinburgh, under Schedule A of the Income-Tax Acts for the year 1888–89. The property assessed was the City Chambers, and the nett assessed value was £332, 10s., on which the duty, at 6d. per £, amounted to £8, 6s. 3d.

The premises assessed contained various offices and rooms occupied in the management of municipal business, and included the Burgh Court Room and rooms connected therewith.

The appellants maintained that as regards the assessment on the City Chambers, these were occupied for public purposes, and for the administration of the civil government of the city, and for the administration of justice. They included the Burgh Court and the Dean of Guild Court. They were the seat of the Sheriff Court of the county of the city, with the usual offices incidental thereto. The Chambers could only be used for public purposes, and not for profit. The Government contributed towards the salaries of the officials by payments to the Clerk of Court and to the Procurator-Fiscal.

The appellants contended—(1) The occupation which would infer liability under Schedule A must be a beneficial, and not a mere official occupation; (2) the chambers were occupied for public purposes of such a character that their occupation must be taken to be of the Crown, and the Crown not being named in the Income-Tax Statutes, was not bound thereby.

The Surveyor, Mr Edward Maughan, on the other hand, contended that there was no exemption under Schedule A in favour of buildings used for municipal purposes, but that, on the contrary, section 40 of 5 and 6 Vict. cap. 35, expressly imposed the tax on “all bodies politic, corporate or collegiate, companies, fraternities, fellowships or societies of persons, whether corporate or not corporate, and in the rules annexed to said Act, as applicable to Schedule A, no allowances were specified to be made in respect of municipal buildings.

Page: 65↓

The Commissioners on 14th May 1889 unanimously refused the appeal, on the ground that the Income-Tax Acts gave no exemption to buildings used for municipal purposes from assessment under Schedule A.

The appellants having intimated dissatisfaction with the decision of the Commissioners, the present case was stated for the opinion of the Court of Exchequer, under the Taxes Management Act 1880.

Argued for the appellant — Municipal buildings were exempt from income-tax, in respect that their occupation was not beneficial but for public purposes. In any view, a deduction must be made in respect of the Burgh Court Rooms, which were occupied for the administration of public justice— The Justices of Lancashire v. The Overseers of Stretford, May 1, 1858, E. B. & E. 225; Comber v. The Justices of the County of Berks, Dec. 3, 1883, L.R., 9 H. of L. 61, in which case Clerk v. Dumfries Commissioners of Supply was disapproved.

Argued for the Surveyor of Taxes—The question of profit and loss did not fall within the scope of Schedule A. The question was whether the premises were capable of actual occupation. It was not necessary to traverse the decision in Comber's case, as the buildings here were not used in the service of the Crown, but primarily and mainly for the purposes of muncipal business. The Imperial Exchequer contributed nothing to the Burgh Court, nor were the Magistrates appointed by the Crown— Clerk v. Dumfries Commissioner's of Supply, July 16, 1880, 7 R. 1157.

At advising—