Scottish Court of Session Decisions

This was an appeal by F. W. Langston, Surveyor of Taxes, from a decision of the Income-Tax Commissioners for the County of Edinburgh.

The case stated by the Commissioners bore that Mr John Grant, licensed retailer of spirits, appealed against an assessment of £3, 5s. 6d., being the inhabited-house-duty at the rate of 6d. in the £ on £131, the cumulo value of a dwelling-house and licensed premises situate in Bath Street, Portobello, and claimed that the duty should be confined to that portion of the premises occupied as a dwelling—house. The following facts were found and admitted 1. The premises in question consist of a building of two storeys under one roof, of the whole of which the appellant is both owner and occupier. 2. The ground floor, No. 49 Bath Street, is used by the appellant for the purpose of carrying on the trade of licensed retailer of spirits, and the upper storey, No. 47 Bath Street, is occupied by him as his dwelling-house. The terms of his public-house certificate, which is in the form of Schedule A, No. (2), appended to the Public Houses (Scotland) Act 1862, are that he is authorised and empowered ‘to keep a public-house at 49 Bath Street, Portobello … for the sale in the said house, but not elsewhere … of spirits, wine, porter, ale …‘3. The only access to the dwelling-house is by the door opening from the street, No. 47 Bath Street, to the staircase leading to the upper storey, and for the appellant to enter his licensed premises from his dwelling-house he has to descend the stair, come into the public street, and enter by the public door No. 49 Bath Street. 4. The dwelling-house is not included in the premises licensed for the sale of exciseable liquors, and they are separately entered in the valuation roll of the city of Edinburgh, the annual value of the house being entered as £33, and of the licensed premises as £98. 5. The licensed premises were formerly occupied by a tenant who was not tenant or occupier of the dwelling-house. No person resides in the licensed premises, as the magistrates of Edinburgh, being the licensing authority within whose jurisdiction Mr Grant's house is situate, have made it an unwritten condition that Mr Grant should not reside in his licensed premises.” The Commissioners concluded by saying that being of opinion that no liability to inhabited-house-duty existed in respect of the business premises No. 49 Bath Street, Portobello, they had sustained the appeal, and restricted the assessment to the duty on £33, the annual value of the dwelling-house No. 47 Bath Street, Portobello.

By 48 Geo. III. cap. 55, Schedule B, rule 3, it was enacted “that all shops and warehouses which are attached to the dwelling-house, or have any communication therewith, shall, in charging the said duties, be valued together with the dwelling-house.”

By 57 Geo. III. cap. 25, sec. 1, it was enacted that “Whereas by an Act passed in the forty-eighth year of his present Majesty … certain duties were granted to his Majesty … upon inhabited houses, as set forth in the schedule to the said Act annexed, marked (B); and whereas it is become usual in cities and large towns and other places for one and the same person, or for each person where two or more persons are in partnership, to occupy a dwelling-house or dwelling-houses for their residence, and at the same time one or more separate and distinct tenements or buildings, or parts of tenements or buildings, for the purposes of trade, or as warehouses for lodging goods, wares, or merchandise therein, or as shops or counting-houses, and to abide therein in the day time only for the purposes of such trades respectively, which have been charged with the said recited duties although no person shall inhabit or dwell therein in the night-time; and it is expedient in such cases to exempt from the said duties such tenements or buildings, or parts of tenements or buildings, as are or shall be solely employed for the purposes herein mentioned: Be it therefore enacted … that from and after the 5th day of April 1817, on due proof made in the manner herein directed to the satisfaction of the respective commissioners acting in the execution of the said recited Act, that any person or any number of persons in partnership together respectively occupy a tenement or building or part of a tenement or building, which shall have previously been occupied for the purpose of residence wholly, as a house for the purposes of trade only, or as a warehouse for the sole purpose of lodging goods, wares, or merchandise therein, or as a shop and counting-house, no person inhabiting, dwelling, or abiding therein except in the day-time only for the purpose of such trade, such person or each of such persons in partnership respectively residing in a separate and distinct dwelling-house or part of a dwelling-house charged to the duties under the said Act, it shall be lawful for the said commissioners, according to the provisions of this Act, to discharge the assessment made for that year in respect of such tenement which shall be so used for the purposes of trade, or so employed as a warehouse for the sole purpose of lodging goods, wares, or merchandise therein, or as a shop and counting-house, anything in the said Act to the contrary notwithstanding.”

By 5 Geo. IV., cap. 44, sec. 4, it was provided that “Whereas by an Act passed in the fifty-seventh year of his late Majesty's reign provision is made for granting exemptions to persons in trade from duties on houses, windows, and lights, and on inhabited houses, in respect of houses, tenements, or buildings, or parts of tenements or buildings, used solely by such persons for the purposes of trade, such persons respectively residing in a separate and distinct dwelling-house, or part of a dwelling-house, charged to the said duties … and whereas it is expedient to extend the said exemptions to the cases herein mentioned—Be it futher enacted, that upon all

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assessments to be made for any year commencing from and after the 5th April 1824 the provisions in the said Act contained for granting exemptions from the said duties to persons in trade in respect of houses, tenements, or buildings in the said Act described, shall and may be extended and applied by the respective commissioners and officers acting in the execution of the said Act and of this Act, on due proof, to all and every person or any number of persons in partnership together, for and in respect of any house, tenement, or building, or part of a tenement or building, in the said Act described, which shall be used by such person or persons as offices or counting-houses for the purposes of exercising or carrying on any profession, vocation, business, or calling by which such person or persons seek a livelihood or profit, no person inhabiting, dwelling, or abiding therein except in the daytime only, for the purpose of such profession, vocation, business, or calling, such person, or each such persons in partnership respectively, residing in a distinct and separate dwelling-house, or part of the dwelling-house charged to the said duties.”

The inhabited-house-duty was repealed in 1834 by 4 and 5 William IV. cap. 19, but was re-imposed by 14 and 15 Vict. cap. 36, which also expressly revived, with certain exceptions, the powers, provisions, rules, regulations, &c., contained in Schedule B of 48 Geo. III. cap. 55.

By 41 Vict. cap. 15, sec. 13, sub-sec. (2), it was enacted that “every house or tenement which is occupied solely for the purposes of any trade or business, or of any profession or calling by which the occupier seeks a livelihood or profit, shall be exempted from the duties by the said commissioners upon proof of the facts to their satisfaction, and this exemption shall take effect although a servant or other person may dwell in such house for the protection thereof.”

Argued for the appellant—The decision of the Commissioners was erroneous, and contrary both to the statutes and to the decisions. A long series of cases had settled the point that a person in the respondent's position was not entitled to exemption. The whole house formed one assessable subject, and the absence of internal means of communication between the upper and the lower floors made no difference on the legal aspect of the case. No one was entitled to exemption under the statutes who did not reside in a separate and distinct dwelling-house or part of a dwelling-house— Scottish Widows’ Fund Society v. Solicitor of Inland Revenue, January 22, 1880, 7 R. 491; Glasgow and South-Western Railway Co. v. Banks, July 16, 1880, 7 R. 1161. See also Russell, March 6, 1877, 4 R. 1143; Union Bank v. Solicitor of Inland Revenue, February 2, 1878, 5 R. 598; Clark v. British Linen Co., June 17, 1885, 12 R. 1133; Smiles v. Crooke, March 6, 1886, 13 R. 730; M'Innes v. Muat, November 12, 1885, 23 S.L.R. 115; Commercial Bank, 1 Tax Ca. 222; London Library, 2 Tax Ca. 594; British Linen Co., 3 Tax Ca. 198; Yorkshire Insurance Co. v. Clayton, 1881, L.R., 8 Q.B.D. 421.

Argued for the respondents—The Commissioners' decision was right. The respondents were entitled to exemption under section 1 of 57 Geo. III. cap. 25. It was quite true that in the case of the Glasgow and South-Western Railway, ut sup., the Lord President had said that that statute “did not contemplate the case of separate parts of tenements being relieved, the whole tenement being the property of one owner.” But his Lordship's commentary on the statute was not necessary to the decision of the case, which fell under 5 Geo. IV. cap. 44. In that case, moreover, there was communication between the two sections of the house, and that made all the difference— Chapman v. Royal Bank, 1881, 7 QBD 136. The respondents were also entitled to exemption under sec. 13 (2) of the Act 41 Vict. cap. 15. There could be no doubt as to the meaning of the word “tenement”— Campbell v. Inland Revenue, February 21, 1880, 7 R. 559; Russell v. Coutts, December 14, 1881, 9 R. 261. The premises here fell within the definition laid down in the latter case. See also Riley v. Read, 1879, 4 Ex. D. 100. In any event a public-house was not a shop or warehouse and liable to duty within the meaning of Schedule B or 48 Geo. III.— Bishop of St Albans v. Battersby, 1878, 3 QBD 359.

At advising—