Court Opinion

ID: 9454696
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:55:06.368387+00
Date Added: 2024-06-11T17:34:15.133951
License: Public Domain

NICHOLS, Judge
(concurring):
I am happy to concur in the court’s Per Curiam, opinion adopting Commissioner Willi’s eminently satisfactory handling of this case. I would like to add a few comments to explain my own views.
To all appearances, the defendant’s position is lacking in merit to a degree which is unusual among the tax cases that come to this court. This is because the principles of statutory construction applicable herein have suffered disregard of a kind which defendant’s taxing authorities are rarely guilty of.
At the outset, I would like to point out that this is the 3rd case argued within a two months’ span in which defendant’s counsel has candidly acknowledged that he is unable to suggest a single reason why the Congress should have wished to enact into law the statutory construction defendant urges. The other two cases are Jones v. United States, No. 146-48, disposed of by order, May 19th, 1969 (a pay case); and United States v. Native Village of Unalakleet et al., Ct.Cl., 411 F.2d 1255 (decided June 20th, 1969). I should think that realization of this might give rise to a doubt whether one is well armed for forensic combat. Commissioner Willi rightly points out that defendant’s position would “pyramid” the tax on tubes used in plaintiff’s tuners (i. e., tax them twice), contrary to the standards of sound excise tax legislation the Congress had prescribed for itself. He might have also pointed out that the defendant’s interpretation is highly discriminatory. It was admitted in oral argument that some television tuners were made by integrated manufacturers of television sets and that RCA was in this category. It was further admitted that there would be no pyramiding or double taxation, under the defendant’s interpretation, on the tubes that RCA might have used in the production of tuners. The majority of the concerns which produce tuners are not integrated into great business combines and are independent, selling their product at arm’s length to the ultimate manufacturer of the television set, as plaintiff does or did. Thus defendant imputes to *1214Congress an intent to discriminate in favor of the corporate giant against the small independent producer. In Select Tire Salvage Co., Inc. v. United States, 386 F.2d 1008, 181 Ct.Cl. 695 (1967), this court considered the same Congressional excise tax standards that Commissioner Willi refers to and noted that they also include a policy against such discrimination.
Defendant forgets that the intent of Congress must be our lodestar, and that any statutory construction necessarily imputes an intent to Congress. If Congress didn’t intend it, the statute doesn’t do it. Defendant would make Congress a mere blunderer incapable of drafting legislation to effectuate its own declared policies. Of course, everyone knows that once in a great while the Congress may be obstinate in error and rivet together a misshapen structure the IRS and the courts cannot get out of. That is not this case. In this instance the language is so weak in supporting defendant’s position that it includes 4 escape hatches, each one large eonugh for a person of normal girth. There is, to begin with, no such certainty about the meaning of the word “chassis” as to justify interpreting it to exclude its application to plaintiff’s tuners. (I differ with the commissioner so far as he throws on plaintiff the burden of resolving this ambiguity.) In the second place, there is no certainty that the exemption cited by the commissioner “for resale by the vendee for such use by his vendee, if such article is in due course so resold” does not include articles such as the tubes here involved which are not physically attached to the plaintiff’s tuners but are only plugged into sockets. In the third place, as the commissioner points out, even if (contrary to fact) the tubes were physically incorporated in the tuners and could not be removed without damage, there is no compelling reason for holding that the plaintiff is a “manufacturer” under the statute and regulations applicable. In the fourth place, it appears possible to me to hold that the articles “for use by the vendee as material in the manufacture or production of, or as a component part of, an article enumerated in this chapter;” includes, use in assembling a component part which is afterwards built into a “taxable article” by another person. Any one of these 4 openings make it possible to preserve the reputation of Congress for ability to draft nondiscriminatory and non-pyramiding exercise tax legislation when it intends to do so.
I myself and, I believe, some of my colleagues, were anxious to obtain a better understanding of how the administrative decision was arrived at, so that we could make a selection among the 4 escape hatches that would not have unforeseen results in other situations. Counsel for defendant indicated that a decision against him would have such results but failed to furnish specifics.
Having been at one time a member of the Treasury bureaucracy myself, I feel I understand somewhat the rationale of seemingly, but perhaps only seemingly, indefensible decisions such as this. The official tends to consider any specific problem in light of a vast structure of administrative rulings, published and unpublished, and court decisions. The relation of many parts to the situation at hand is concealed from the uninitiate, but obvious to him. Any proposed position is considered according to whether it would shore up or weaken this fabric. This often has a larger share in his thinking than the intent of Congress or achieving justice and equity under law for the individual taxpayer. On the other hand, the adversary system of justice tends to focus the attention of courts on the immediate issue before them and they are often — with the best will in the world — oblivious of much or all of the broader conceptual problems. For this reason courts often seem to the technical officials like hyperactive children ignorantly and innocently dealing destruction all around them. The officials often seem to courts as persons bent on the perpetuation of injustice. Each side *1215needs a better understanding of the other’s problems and point of view.
The adversary system tends to conceal rather than disclose the reasoning and background that underlies administrative decisions. The less the plaintiff knows about how the decision he is challenging was made, the less effective he will be in proving it wrong. This, of course, is one reason for the pressure by plaintiffs to gain access to unpublished private rulings and for the opposition to this by the defendant.
In this case, there was some probing into unpublished private rulings. See Finding 28. The plaintiff sought to show administrative discrimination under the doctrine of International Business Machines Corp. v. United States, 343 F.2d 914, 170 Ct.Cl. 357 (1965). The commissioner did not base his decision on this, nor do we, though the story of the Treasury’s hesitations and vacillations is of interest. Eventually we are going to have to firm up a position about the proper use of private rulings issued to persons not parties to the litigation actually before us. Distressing as it is to defendant to go into this material, at times it may furnish the illumination needed. At times, no doubt, it is irrelevant and useless. What is really wanting here is knowledge as to why the IRS handled the taxpayer as it did, not whether it handled him the same as others similarly situated.
In most judicial reviews, courts have the benefit of the thinking of the officials whose decision is being reviewed. In tax and custom litigation, often they do not. I have protested recently against deciding tax cases with blinders on. Inter-City Truck Lines v. United States, 408 F.2d 686, 187 Ct.Cl. 290 (decided March 14, 1969, dissenting opinion). I do not think I have blinders on here, but I do have some consciousness of imperfect vision. When will defendant assume the onus of educating the court about its decisions, instead of keeping it in the dark?