Court Opinion

ID: 6899146
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:53:10.287204+00
Date Added: 2024-06-11T16:06:06.664079
License: Public Domain

SOPER, Circuit Judge
(dissenting as to Mill 3).
It is of course obvious that the taxpayer was not enriched, unjustly.or in any othei sense, by the operation of Mill 3, for the mill was run at a loss during the tax period. It is contended, however, that the loss might have been greater if the taxpayer had not attempted to pass on the tax, and that any uncertainty must be resolved against the taxpayer since it has the burden of proof. The answer to this argument is that the loss itself, which is conceded, shows beyond all question that the taxpayer paid a part of the tax. It goes without saying that the taxpayer tried to pass on all of its costs, including the tax. Indeed it was obliged to do so if it desired to survive; but the economic conditions at the time were such that it failed in the attempt, and the amount of its loss measures the amount of the costs of production, including the tax, which it paid out of its own pocket. To ascertain how much of this loss consisted of the invalid tax it is only necessary to determine the ratio which the total loss bore to the total cost of production and to apply this ratio to the total tax.
No one has attempted to answer this line of reasoning or to show that it is unsound. *877All that is said is that the taxpayer must show by some additional evidence to what extent each factor of cost contributed to the loss. In the nature of things no such evidence is available, for there is nothing to indicate that the taxpayer did not try to recover all of the costs of operation with the same persistency. In short, the taxpayer is asked to perform an impossible task, and that is not permissible under the doctrine of Anniston Mfg. Co. v. Davis, 301 U.S. 337, 351, 57 S.Ct. 816, 823, 81 L.Ed. 1143, where it was said: “When the Congress requires the claimant, who has paid the invalid tax, to show that he has not been reimbursed or has not shifted its burden, the provision should not be construed as demanding the performance of a task, if ultimately found to be inherently impossible, as a condition of relief to which the claimant would otherwise be entitled.”
The Tax Court as the trier of fact does not possess the arbitrary power to reject a claim irrespective of the probative force of the evidence submitted. In this case the Tax Court has erroneously said in effect that the claimant has offered no evidence that it bore any part of the tax. This presents a question of law which under familiar practice the appellate court has the duty and power to review. With respect to Mill 3, the judgment below should be reversed and the case remanded for further proceedings.