Scottish Court of Session Decisions

This was a case stated for appeal by the Commissioners of Income-Tax for the Upper Ward of Lanarkshire at the instance of John Brown, Surveyor of Taxes, to determine whether the Commissioners acting under the Act 3 and 4 Will. IV. cap. cviii.,

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in whom certain subjects containing the Lanark County Hall and other rooms were vested by the said Act, were liable for income-tax under Schedule A in respect of these subjects.

The material facts set forth in the case were as follows:—“The building in question is situated in the burgh of Lanark, It consists of ground floor and first floor. On the ground floor it contains the Town Council Chamber, a clerk's room, which is also used as his office by the Town-Clerk, who is a law-agent, and in which he conducts private as well as public legal business, a fire-proof safe for records, a private room occupied by the Town-Clerk, and a fire-proof safe used for burgh records, also two rooms occupied by the Procurator-Fiscal of the Sheriff Court. The safes in question are used for the keeping of private municipal records as well as of public documents. On the first floor is the County Hall, with a room leading off it, used for committee meetings, &c. Under the stair leading to the hall is a cellar, which has been utilised as a store by the Town Council in connection with the lighting of the burgh, as also a w.c. The word ‘hall,’ as used in the description of the property assessed, includes the County Hall and the committee room leading off it. The whole buildings open off the main entrance, but there is a separate entrance to the Town Council Chamber, used chiefly, if not solely, on Town Council election days, and a back stair leads from the Council Chamber to the hall above. There is a communication from the main lobby to the Sheriff Court House and offices connected therewith, which adjoin on the south. These (the Court House and offices) are not the property of the appellants, but of the County Council, and being used solely for the administration of justice are not assessed to income-tax. The hall is used for meetings of the Commissioners of Supply and the County Council of the County of Lanark, of which Lanark is the head burgh; for meetings of the District Committee of the Upper Ward of the County and their subcommittees, including the Valuation Committee; for the Quarter Sessions of the County and the Petty Sessions of the Upper Ward, and for the meetings of the Income-Tax Commissioners of the Upper Ward District, as also when required for the Burgh and Police Courts of the burgh of Lanark. It was lately used temporarily for holding the Sheriff Court when the Sheriff Court-House was being altered. It has also at times, but not within the year of assessment, been used for balls given by the various regiments of the reserve and volunteer forces connected with the County, the Caledonian Hunt, and others; for public worship when a church was under repair; and for various other meetings not con-nected with public business. On no occasion has a charge been made for the use of it. The bulk of the Police Court, Magistrates Court, Dean of Guild Court, and Valuation Appeal Court business of the burgh of Lanark is disposed of in the Town Council Chamber, which is more frequently used for these purposes than for the Council meetings, all of which are held in it, recourse being had to the County Hall only when the Council Chamber was likely to be overcrowded. The Town Clerk is required to be in attendance personally or by a representative, and according to arrangement, uses the Council Chamber for private as well as burghal business. The clerks' room is used by clerks in his employment for discharge of burgh as also private business. The Procurator-Fiscal is paid by Government for official work, but as a law-agent he conducts private as well as public business in the rooms occupied by him on the ground floor of the building, and his clerks are engaged in both.”

The said Commissioners in 1836 fixed the rent to be paid for the offices, including the Town Council Chambers and the record rooms of the Town-Clerk and the Sheriff-Clerk who then occupied a part of the premises, at £8 each. For the year of assessment the part of the premises allocated to the Town-Clerk is still rented at £8, while the part allocated to the Sheriff-Clerk is now occupied by the Procurator-Fiscal, who pays no rent. This part is entered in the valuation-roll as being of the annual value of £6.

In respect of these subjects the Commissioners were assessed for income-tax to the amount of £2, 0s. 6d., being £1, 6s. 6d. in respect of the County Hall and 14s. in respect of “offices,” being the parts of the premises occupied by the Town-Clerk and the Procurator-Fiscal. Apparently “offices” included the Town Council Chamber. Against the assessment John Smith, Clerk to the Commissioners under 3 and 4 Will. IV., cap. cviii., appealed to the Commissioners of Income-Tax.

The Commissioners of Income-Tax were of opinion that no part of the building was properly assessable to income-tax, and discharged the assessment.

Against this decision the Surveyor of Taxes appealed, and argued—It was not disputed that buildings occupied exclusively for the administration of justice were exempt from income-tax, on the principle that they were theoretically in the occupation of the Crown, and that the Crown, not being mentioned in the Income-Tax Acts, was not bound by them. That was all that was decided in Mersey Docks v. Cameron, 1865, 11 H.L.C. 443, and Coomber v. Justices of Berks, 1883, 9 App. Cas. 61. That principle did not cover the buildings in question in the present case. They were mainly used for county business—only incidentally as Courts of Justice. The use of buildings for local government conferred no exemption from income-tax. It was not enough to show that the buildings were used for public purposes—it must be for something which theoretically was part of the administration of the Sovereign. Thus the council chambers of a burgh and university buildings were not exempt— Magistrates of Edinburgh v. Surveyor of Taxes, November 15, 1889, 17 R. 73, 27 S.L.R. 64; Greig v. University of Edinburgh, June 8, 1868, 6 Macph. (H.L.) 97, 5 S.L.R. 260. The rooms

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used by the Procurator-Fiscal and Town-Clerk were clearly assessable, because they were used for private as well as official business.

Argued for the respondent—The subjects in question were used for public purposes and not for profit. Courts were held in the hall as well as county-meetings. Such a case was within the principles of exemption recognised in Coomber v. Justices of Berks, cit. supra. Exemption was not confined to premises exclusively used for the administration of justice.

At advising—