Document: 363 U.S. 709 80 S.Ct. 1331 4 L.Ed.2d 1508 CORY CORPORATION et al., Petitioners,v.Ernest J. SAUBER. No. 436. Argued May 16, 1960. Decided June 20, Mr. Edwin A. Rothschild, Chicago, Ill., for petitioners. Howard Heffron, Washington, D.C., respondent. PER CURIAM. 1 This suit was instituted by petitioners in the District Court a refund of excise taxes collected on sales two air-conditioning units sold 1954 and 1955. Section 3405(c) Internal Revenue Code 1939, 26 U.S.C. (1952 ed.) § 3405(c), U.S.C.A. placed 10% tax '(s)elf-contained units.'1 3450 gave Commissioner, with approval Secretary, power to prescribe needful rules regulations enforcement provisions relating such taxes. Pursuant this power, Commissioner published revenue rulings 19482 19543 holding that statute taxed which had certain physical features, were designed installation window or other opening 'a total motor horsepower less than horsepower.' These represented Commissioner's construction Act until different construction, applied prospectively only, expressed issued 1959.4 2 The parties stipulated only 'self-contained air conditioning household type' each question an actual one horsepower. taxpayers contended words 'motor horsepower' meant horsepower; Government they nominal given manufacturer 'rated' assigned basis standards established trade associations. construed as referring actual, not rated, found, accordance stipulation, excess It found additionally even greater On appeal Appeals reversed. 7 Cir., 266 F.2d 58; 267 802. did reach meaning rulings, it held 'household controlling statutory criterion, is irrelevant issue, clearly type because 'made meet needs household,' insofar referred horsepower, therefore void. case here petition writ certiorari, 361 899, 209, 155. 3 There much said briefs oral argument about test case. sale 50,000 turn decision. We intimate no opinion any except involved here. issues before are validity rulings. Hence we do what defenses might have been made. Respondent urges Court, contrary stipulation below, all self-contained units, merely those type. need consider view correct under either think permissible one. hold force from 1948 19595 factor our may some relation size then stage engineering development well relevant unit.' indeed evidence less-than-one-horsepower draw line between commercial types equipment. Moreover, appears after consultation industry representatives, who asserted definition term understood it. consistently adhered more 10 years, Congress change though specifically advised 1956 being applied.6 cannot say one, cf. Universal Battery Co. v. United States, 281 580, 50 422, 74 L.Ed. 1051, especially where continued without deviation over decade. Cf. States Leslie Salt Co., 350 383, 76 416, 100 441. 'Among engineers, does mean its rating but means will deliver continuously full normal load.' nor review finding conclusion valid. Accordingly remand consideration questions remain. And add disposition prejudice action lower courts deem appropriate prevent taxpayers, should ultimately prevail, obtaining windfall reason them paid Government. 5 Reversed. 6 Justice FRANKFURTER, dissenting. I would dismiss certiorari improvidently granted. 8 urged substantial retroactivity exercise his lawmaking he attacked court prior interpretation him taxing statutes whereby now claimed due. As finally presented presented. Insofar initially depended upon reliance petitioners, apparently governed 1108(b) 1926, 44 Stat. 114, Int.Rev.Acts, page 319, taxation, event trial reiterated way 'estopped' attack invalidity ruling general unfairness interpretation, be start has manifest is, least, ambiguous (the tried clarify 1957) reasonably susceptible both interpretations it, so judicial determination bound affect retroactively. Nor there record saying Appeals' rejection toto severely retroactive effect been. 9 contention substantive Appeals, failed give due weight interpretative function Commissioner. In light confused cloudy case, failure since approach resulted rule 'inconclusive uncertain.' (266 62.) Had clear start, apparent, me at that, assuming wrong, departure 'from accepted usual course proceedings * call court's supervision.' Rule 19, par. 1(b), 28 litigation bears many earmarks feigned suit. Despite desire 'test' law, ought avoid adjudication checkered positions taken particular controversy real. consent required 6416(a)(3) 1954, 6416(a)(3), precondition action, obtained attorney auditor too broad inference were, effect, writing their own bringing Without further proof, hardly establish immediate interest outcome lawsuit, i.e., money loss illegal exaction, sought made requisite adjudication. Atherton Mills Johnston, 259 13, 15, 42 423, 66 814. Responsibility confusing shifts position during characterize unfairly attributed extent contrived, stipulations affecting really interests chief concern using pilot litigation. Whether must inferences history appearance be, if demonstrably calling dismissal proceeding, make doubly unwilling judgment dug out dubious record. 11 dismiss. 12 CLARK, whom THE CHIEF JUSTICE BLACK join, 13 Congress, 1941, levied units.' 1939. legislative shows intended 'apply mechanical refrigerators refrigerating (including units) whether type.' H.R.Rep. 1040, 77th Cong., 1st Sess., p. 32. 1948, ruling, reissued defined 14 involves 'proto-type test' determine coverage units. Petitioners contend 'total used rather rated manufacturer. unit manufacturer's three-fourths 'fly face statute.' argued interpreted 'in (consonance) require strike down nullity something unreasonable, void, effect.'1 This, asserted, court, however, enforced requiring application test. reversed, statute, 15 Government's covers brushed aside 'contrary stipulation' declares restricted finds 'need one.' holds 'were void.' Thus, despite fact refers solely units' fails mention type,' refuses resolve raised simply remands language refer posted itself. see how permissible, mentioned entirely inconsistent statute's coverage. formulated meetings culminated letter York Corporation revealed considered 'exactly common everyday usage implies—the complete within itself.' suggested later promulgated almost identical 'sufficiently scope include exception manufactured.' admit 'at times material hereto engaged manufacture admitted ones, sense works same box.' They certainly came terms reflected representations. If these representations brought erroneous void declare Appeals. 16 Finally, regulations, and, admit, 'overrule However, collect nontaxable, '(n)o shall levied, assessed, collected' sale. 1108(b), 1926.2 follows imposed can same. concedes respondents 'had relied detriment—by treating nontaxable output (which court)—they protected (under 1108(b)) against administrative position.' Conversely, rely could interpose invalid bar recovery already collected. 17 connection, seems know industry. seem collections, discloses major manufacturers determined 'taxability reference therefrom.' large sums retained manufacturers. based purchased persons connected Under nevertheless, result control While customers sue therefor, likelihood actions highly remote circumstances 18 Thus far received 'consents' save units—and consents lawyer accountant taxpayers. entire litgation cloudy, agree 'agreed' stipulations. circumstances, unfortunate today enter order permit keep considerable amounts charged 'excise taxes.' re-enacted 4111 Code, 4111, 4111. S.T. 934, 1948—2 Cum.Bull. 180. Rev.Rul. 54—462, 1954—2 410. excluded Treasury Regulations 1959 T.D. 6423, 1959—2 282. See notes 3, supra. Hearings, Subcommittee, House Ways Means Committee Excise Taxes, 84th 2d Sess. 163—165. R. pp. 130—132 c. 27, 9, 114: 'No article leased manufacturer, time lease existing regulation, decision taxable, parted possession ownership article, relying decision.'

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