Document: 329 U.S. 296 67 S.Ct. 271 91 L.Ed. ROTHENSIES, Collector of Internal Revenue,v.ELECTRIC STORAGE BATTERY CO. No. 48. Argued Nov. 15—18, 1946. Decided Dec. 16, Mr.Arnold Raum, Washington, D.C., for petitioner. Mr. Laurence H. Eldredge, Philadelphia, Pa., respondent. Justice JACKSON, delivered the opinion Court. 1 This case represents an effort, thus far successful, to obtain advantage by way recoupment a claim tax refund long since barred statute limitations. The facts this singular situation are not in dispute. From April 1919 1926 Electric Storage Battery Company paid excise taxes on sale storage batteries belief, shared Government, that such sales were subject tax. In July company asserted otherwise and filed claim. It asked only part which it had between 1922 1926. Refund earlier now seeks recoup then limitations no ever has been their action was begun recovery. Suit brought, however, against after 1922; judgment therefor obtained district court, Co. v. McCaughn, 52 F.2d 205; 54 814, affirmed Circuit Court Appeals, 3 Cir., 63 715. Government finally settled $1,395,515.35, $825,151.52 represented balance interest. 2 During years refunded being collected, taxpayer deducted from income before calculation its tax, thereby deriving substantial benefits. Commissioner, therefore, treated as 1935, year received, because assessed additional excess profits with interest thereon totaled 229,805.34. deficiency, refund, rejected sued Collector. contended but if so considered should be permitted, caused inclusion, amount 1922. Both courts below correctly held properly income. 57 F.Supp. 731; 152 521. Cf. Security Flour Mills 321 281, 64 596, 88 725; Freihofer Baking 151 383. have held, liability 1935 extinguished rec upment taxes. gravity holding administration laws led us grant certiorari. Rothensies Co., 327 774, 66 825. is there any statutory warrant allowing claims or otherwise.1 Authority said found law relies chiefly two decisions Court, Bull United States, 295 247, 55 695, 79 1421, Stone White, 301 532, 851, 81 1265. essence doctrine stated case; 'Recoupment nature defense arising out some feature transaction upon plaintiff's grounded.' 262, 700, 1421. never thought allow one offset another, permit made suit plaintiff examined all aspects, rendered does justice view whole. 4 application general principle concrete cases both cited instructive limited scope given litigation. single constituted taxable event claimed recoupment. both, subjected inconsistent legal theories, what mistakenly recouped due. receipt executors sum money. An effort twice once under Income Tax Act estate decedent's death Estate gross estate. collected wrong theory allowed assessment correct theory.2 likewise, involved event, period. trustees beneficiary. Assessment beneficiary meanwhile become barred. Then would inure whole trustees. Whatever may indicating broader recoupment, these ones applied cases. 5 argued allowance here expand case. Appeals agreed 'The main more closely connected than they here.' Batt ry Rothensies, 521, 524. But court nevertheless introduced into 'based concepts fairness.' saw reason narrowly construing requirement originate same transaction. We think misapprehends leads state fully reasons declining beyond 6 probably intolerable, at least Congress regarded ill-advised, system come day final settlement required stand ready forever produce vouchers, prove events, establish values recall details goes contest. Hence limitation almost indispensable element fairness well practical policy. 7 recent occasion point character statutes. 'Statutes limitation, like equitable laches, conclusive effects designed promote preventing surprises through revival slumber until evidence lost, memories faded, witnesses disappeared. even just unjust put adversary notice defend within period right free stale time comes prevail over prosecute them.' Order Railroad Telegraphers Railway Express Agency, 342, 348, 349, 582, 586, 788. 'They definition arbitrary, operation discriminate claim, voidable (avoidable) unavoidable delay. They judicial process legislation.' Chase Securities Corp. Donaldson, 325 304, 314, 65 1137, 1142, 89 1628. 8 As statutes field taxation, sometimes gets advantages other times them. hardships taxpayers losses revenues pointed out.3 tempt equity-minded judge seek ways relief individual 9 we approve breadth seriously undermine matters. many, most, deficiency items relate past closed statute, item here. Hall 95 Ct.Cl. 539, 43 130. true form basis claims. Every each invite search taxpayer's entire history recoup. cas provides extent go. When brought 1943, pleaded twenty sixteen statute. That dead can resurrected doctrine, enough show menace limitations—at those whose affairs accident design take shape avail themselves remedies. Moreover, jurisdiction consider Gooch Milling Elevator 320 418, 184, 139. Hence, availability remedy depend diverting litigation courts. 10 cannot encroachments policy consideration who many failed file If exceptions limitations, rather Courts create limit 11 reversed. 12 Reversed. 13 MURPHY opinion, BLACK RUTLEDGE join, affirmed. He believes illegal assessments exacted arise matter Government's demand making applicable rule Indeed, provisions Revenue 1928 seem direct result opposite Section 608 'A portion internal-revenue (or interest, penalty, amount, addition tax) enactment Act, shall erroneous—(a) expiration filing therefor, unless filed; * *.' 26 U.S.C.A. Int.Rev.Acts, page 459. 609(b) provides, credit overpayment respect void erroneous section 608.' 45 Stat. 874, 875, 460. And cf. McEachern Rose, 302 56, 58 84, 82 46. emphasized incorrect proceeded collection American Light & Traction Harrison, 142 639, 154 A.L.R. 1042, did Government. judiciously, said, 'Although hardship results inconsistency, correlative will, converse instant situation, work equal taxpayer.' 643. Whether §§ 609 1928, taken compel conclusion reach case, court's recognition parties taxation affected impartially, though perhaps harshly, repose easily overlooked, when unfairness retaining incorrectly monies respondent stressed, primarily instrument fairness.

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