Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1922-06-13

ing OF the section above cited.
Woods VS. Lewellyn. 252 Fed. i06.
Eliot National Bank VS.. Gill 21s
Fed. 500. National Bank OF Com
merce VS.. Allen. 22s Fed. 472.
The plaintiff therefore. urges
that. as the return prepared by the
Commissioner was not made within
three years after the plaintiffs re-
turn was due on March /. 1916,
and the assessment was not made
within three years from June l,
1915. no suit or proceeding may be
begun by the Collector for recovery
OF the tax based thereon The
question as 10 whether the three
years within which return may
be made runs from the time OF the
discovery or from the time when
the return IL due, has been held
against the plaintiff in a dictum in
Eliot National Bank VS.. Gill. 2ls
Fed. 600. but the point was not ex-
pressly before the Court either In
that case or in Woods VS.. Lawellyn
252 Fed 100. where the Inference
IL to the contrary. The subject is
discussed in Montgomery Tax
Procedure. Ed. 1921. Page 10. foot
note IS, and the opinion OF the
author Is that the punctuation con
veys a very clear meaning that the
discovery and the assessment must
be made within three years from
the time when the return IL due.
These considerations. however. all
go 20 the question OF the invalidity
Of the return and assessment and
cannot he raised in this proceed
ing in view OF the inhibition OF
Section 3224 r. $. providing mo
suit for the purpose OF restraining
the assessment or collection OF any
tax shall be maintained In any
court" and the ruling OF the Su-
preme Court holding that Con-
gress has provided a complete
system OF corrective Justice in re-
gard 10 all taxes imposed by the
general government including pro
visions for recovering the tax after
1t has been paid by suit against the
Collector and. therefore, the tar
payer has no recourse 10 the courts
until after the money is paid" State
Railroad Tax Cases. 22 U. s. SIS,
6I3.
Therefore, Il must be held that
the remedy by Injunction will not lie,
unless because the plaintiff through
the threatened action OF the Col
lector through distraint Is deprived
OF any redress at law, the effect OF
Sec. 1924 upon the facts Of this case
has been modified by subsequent
legislation.
BY the Revenue Act OF November
20. 1921. Sec. $50 (d), Statutes at
large. page 265. It Is provided; mo
suit or proceeding for the collection
OF any such taxes due under this
Act or under prior income excess
profits. or war tax acts. or OF any
taxes due under Section 3s Of such
Act OF August 8. 1909. shall be be-
gun after the expiration OF Ave years
after the date when such return was
filled" etc.
As the plaintiffs return was filed
in March. 1916, see no escape from
the conclusion that the above pro-
vision OF the Act OF 1921 interposes
a Limitation upon suits or proceed
ings which expired in 1921 More
over. Sec. 1920 Of the Act OF 1921
provides: That no suit or proceed
ing for the collection OF any inter
nal revenue tax shall be begun after
the expiration OF five years from the
time such tax was due except in the
case OF fraud with the intent TO
evade tax or wilful attempt in any
manner TO defeat or evade tax. This |
section shall not apply to suits or
proceedings for the collection or |
taxes under Section $50 OF this Act |
nor to suits or proceedings begun |
at the time OF the passage OF this !
Act"
The latter paragraph OF the above /
section was apparently inserted be-
cause Section ESQ contains it's own |
provisions for Limitation OF time OF
making assessments extension with |
the consent OF the tax payer and |
OF time for beginning
suits or proceedings.
Under the general system for col
lection OF taxes it would no doubt
be held that the plaintiffs remedy
would be TO pay the tax under pro-
test and bring suit against the col
lector to recover Il back. But the
plaintiff argues that. II he should
pay the tax to the collector. he
would on several grounds be debar
red from setting up as a basis OF re-
covery against the collector, either
that the return made by the COM
missioner or the assessment was in
valid or that the stock OF the Della
ware Company received by the plain
tin was assessed in excess OF Its fair
value for the purpose OF determining
the tax. To sustain this contention
the plaintiff cites Section 252 OF the
Revenue Act OF 1918. re-enacted as
Section 253 OF the Revenue Act OF
1921, as follows: IF upon examina-
ton OF any return OF income made
pursuant to the Act of
October 3. 1918, It APP
pears that an amount OF income
. tax has been paid in ex-
cess OF that properly due, then not
the provisions OF Sec
ton s22S OF the Revised Statutes,
the amount OF the excess shall be
credited against any income
taxes. or instruments thereof then
due from the taxpayer under any
other return. and any balance OF
such excess shall be Immediately re-
funded to the taxpayer: Provided
hat no such credit or refund shall
be allowed or made after Ave years
from the date when the return was
hue. unless before the expiration Of
such five years a claim therefor is
iled by the taxpayer"
As the Ave years from the date
when the return was due, namely,