# Petition for a Writ of Certiorari — Fuhrman & Forster Co. v. Commissioner

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for a Writ of Certiorari
- **Published:** January 1, 1941
- **Citation:** 312 U.S. 686

## Text

IN THE

Supreme Court of the United States

Ocroser Term, A. D. 1940.

we

No. @

FUHRMAN & FORSTER COMPANY,
Petitioner,
vs,

COMMISSIONER OF INTERNAL REVENUE,
Respondent.

—— oe

PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES CIRCUIT COURT OF APPEALS
FOR THE SEVENTH CIRCUIT AND BRIEF IN SUP-
PORT THEREOF.

RayForp W. LeMtey,
Attorney for Petitioner.

THE GUNTHORP. WA RREN PRINTING COMPANY, 210 WEST JACKSON, CHICAGO

INDEX.

Pace

Petition for a Writ of Certiorari to the Circuit Court
of Appeals for the Seventh Circuit............... 2
Statement of the Matter Involved.............. 2
Decision of the Circuit Court of Appeals........ 5
Reasons Relied Upon for Allowance of Writ..... 6
Brief in Support of Petition for Writ of Certiorari... 15
PIE oe cack ya ee ENED RAL a RG as cobes 15
et re rere nr re 16
PRUE OE PTORG ios oh ses Coes necicd coebs 18

Argument:

I. The Petitioner Was the Taxpayer Upon
Whom the Processing Tax Was Im-
posed Within the Intendment of the Ag-
ricultural Adjustment Act ........... 19

II. Petitioner Is a Proper Claimant Under the
Provisions of Title VII of the Revenue
Act of 1936 and the United States Proc-
essing Tax Board of Review Had Ju-
risdiction to Entertain This Proceeding 39

III. The Decision of the Circuit Court of Ap-
peals Will Result in Confusion and
Concomitant Hardship Upon Petitioner
in Connection With the Tax on Unjust
Enrichment Provided by Title III of
the Revenue Act of 1936. That Act
Recognizes Only a Processor and a
Vendee. What Is the Position of Peti-
tioner Thereunder? ................. 49

ii

Cases CITeEb.

Anniston Mfg. Co. v. Davis, 301 U. S. 337............ 11
Arabi Packing Co., Inc., 60 S. Ct. 1093.............. 10
Bankers Trust Co., et al. v. Bowers, 295 Fed. 89...... 34
Bird v. Grant (Also Tritt v. Grant), 94 N. Y. Supp. 127 34
Carbon Steel Co. v. Lwellyn, 251 U. S. 501........... g
moe. Gt, Se ee. cece 13
Detroit Hotel v. Brady, 275 Fed. 995................ 12
pees w. Deen, ee a. Oe 08... ok. ce. cue. 13
F & F Laboratories v. Commissioner, 104 Fed. (2d)
ME Wa aS vhs Cebbnad Wek Gah FG Obak bag ekki 52
Grier v. Kennan, 64 Fed. (2d) 605.................. 12
Gulf C. & F. S. R. T. Co. v. Ellis, 165 U. S. 150....... 12
en: e. Tos, De ee, GOB... oS 12
Knickerbocker Trust Co. v. Meyers, 133 Fed. 764..... 13
Knowlton v. Moore, 178 U. 8. 41.................... 11
Lukas v. Kentucky Distilleries & Warehouse Co., 70
UR I I ono ac a iknds Wei can se ccc cuticad 9, 38
Merrill v. Yeomans, 94 U. S. 568.................... 22
Nordberg v. U. S., 51 Fed. (2d) 271................. 24
Oswald Jeager Baking Co. v. Commissioner, 108 Fed.
ei hE 0k so eee kG oss oy iene dee 52
Seigel v. U. S., 18 Fed. (Supp.) 771................. 12
Stahmann, et al. v. Vidal, 59 S. Ct. 41................ 9, 26
Stewart Dry Goods Co. v. Lewis, 294 U. S. 553....... 12
Trunz Pork Stores, Inc. v. Rasquin, 100 Fed. (2d) 399.6, 53
oe ee 8S Fe reer een aes 50
Warner-Patterson Co. v. U. S., 68 Ct. of Cl. 287...... 9
White v. Hopkins, 51 Fed. (2d) 159................. 9, 40

Zinsmaster Baking Co. v. Commissioner, 109 Fed. (2d)
PO naked ewe cle ch wanna ban beined coset 52

iii
STATUTES :
Revenue Act of 1936, 49 Stat. 1648:

Section 901 (U. S. C. Supp. IV, Title 7, Sec. 623) 44 ‘
Section 902 (U.S. C. Supp, IV, Title 7, Sec. 644) 43 i
Section 903 (U.S. C. Supp. IV, Title 7, Sec. 645) 44 é
Section 905 (U. S. C. Supp. IV, Title 7, Sec. 647) 44
Section 906 (U. 8. C. Supp. IV, Title 7, See. 648) i
hceaadteratoddeses eel suad el macticikin 43, 45 /
Section 907 (U. S. C. Supp. IV, Title 7, Sec. 649)
PO a) a an eer a” RTC EE 43, 47 ‘
Section 913 (U. S. C. Supp. IV, Title 7, Sec. 655) ;
PUMA EK Wea Saks mde Gus CKR DA Oo wads Keke 41, 45
Agricultural Adjustment Act, c. 25, 48 Stat. 31:
Section 9 (U.S. C., Title 7, Sec. 609)...... 21, 22, 24
Section 15 (U.S. C., Title 7, Sec. 615)......... 31
Section 21 (U.S. C., Title 12, Sec. 992)........ 13
Public Act No. 10, 73rd Congress, Approved
8. BPs Garter 21
Pubie Act No. 213, 73rd Congress, Approved
ME Cie ve a<cavecabes op kceeascawee 22, 27
Public Act No. 320, 74th Congress, Approved
BE Sk, Eb veer ea cr ksh as iene side vas 24
Public Act No. 476, 73rd Congress, Approved
ME IE Weenie Coa nein eee shee kos dbo maws 22
Bankhead Cotton Act of 1934 .................. 25

Second Deficiency Appropriation Act of 1938.... 43

iv
MISCELLANEOUS:
Treasury Department:

Decision No. 4403, Approved November 2, 1933. 30
Decision No. 4406, Approved November 11, 1933

Decision No. 4518, Approved January 25, 1935. 24
SE WE kok sas Weada co can bed Reaves 28
Ce ee rere ere ery ee eee 21

Cumulative Bulletin XITI-1, January-June 1934
(Internal Revenue Bulletin No. 20) ......... 8, 29

Department of Agriculture:
Cotton Regulations, Series 2, Supplement 2, Ap-

proved November 29, 1933 ................. 26
Hog Regulations, Series 1, Approved October

WN Sh ess es ee 93

Hog Regulations, Series 1, Supplement 1, Ap-
proved October 20, 1904 ... 2.0... cc eccsees

Jute Regulations, Series 1 ..................
Paper Regulations, Series 1 ..................
Supplemental Certificate, dated July 7, 1934....
Tobacco Regulations, Series 1 ................

Congressional Record:
Volume 77, pages 671-766, 786, 1350, 1562-65...

IN THE

Supreme Court of the United States

Ocroser Term, A. D. 1940.

No.

FUHRMAN & FORSTER COMPANY,
Petitioner,
vs,

COMMISSIONER OF INTERNAL REVENUE,
Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES CIRCUIT COURT OF APPEALS
FOR THE SEVENTH CIRCUIT AND BRIEF IN SUP-
PORT THEREOF.

Your petitioner, Fuhrman & Forster Company, respect-
fully prays for the allowance of a writ of certiorari to the
United States Circuit Court of Appeals for the Seventh
Cireuit to review the decision of that court entered in the
above case on July 22, 1940. A petition for rehearing was
denied by that court on October 1, 1940.

——

STATEMENT OF THE MATTER INVOLVED.

This proceeding involves a claim for refund of $260,-
075.15 paid as processing taxes under the Agricultura]
Adjustment Act. (¢. 25, 48 Stat. 31). A part of the
amount in controversy was paid by petitioner directly to
the United States, pursuant to a demand by the Collector
of Internal Revenue, Chicago, Illinois (hereafter referred
to as the Collector). The larger balance was paid, as di-
rected by the United States, to C. A. Burnette Company,
a public abattoir, whom petitioner had engaged to slaughter
its hogs for a fee, who in turn remitted this money to the
Collector.

After this Court had held the Agricultural Adjustment
Act unconstitutional, Congress attempted to provide an
exclusive remedy for the refunding of the processing taxes
illegally exacted. The remedial statute was known as
Title VII of the Revenue Act of 1936 (c. 690, 49 Stat.
1648, 1750. I. R. C. 507-15), hereafter referred to as Title
VII.

Petitioner duly filed its claim for refund (P. T. Form 79)
with the Collector on June 30, 1937. On June 3, 1938, the
Commissioner of Internal Revenue (hereafter referred to
as the Commissioner or the Respondent) rejected this
claim in full under the theory that petitioner was not such
a person (processor or taxpayer) to whom Title VII au-
thorized a refund. (R. 9.) None of the taxes in con-
troversy have been refunded.

A petition for review was filed with the United States
Processing Tax Board of Review (hereafter referred to
as the Board) on September 1, 1938. (R. 3.) The Board
entered its first order of dismissal for want of jurisdiction
on February 23, 1939, three members of the Board dis-
senting thereto. (R. 52.)

3

Qn April 24, 1939, an amended petition was filed by
your petitioner. (R. 42.) The Board vacated its order of
dismissal on May 11, 1939. (R. 53.) Respondent again
fled a motion to dismiss, and again the Board entered an
order of dismissal on September 28, 1939. (R. 53.) To
the last order, three members of the Board again dis-
sented, expressing the view that the Board had jurisdic-
tion to entertain that proceeding. (Memorandum opinions,
R. 54, 55, 56, and 57.)

The case was brought to the United States Cireuit Court
of Appeals for the Seventh Circuit by a petition for re-
view, filed December 26, 1939, pursuant to Section 906 (g)
of Title VII of the Revenue Act of 1936.

On December 26, 1939, three other petitions for review
were filed with the United States Circuit Court of Appeals
for the Seventh Cireuit, identified as Vette & Zuncker
Company, Ine., Docket No. 7173; United Butchers Packing
Company, Docket No. 7174; and Zuegel Packing Company,
Docket No. 7175. As all of the foregoing cases were

_ virtually identical with that of Fuhrman & Forster Com-
pany, and all represented by the same attorney, the United
States Circuit Court of Appeals for the Seventh Circuit,
upon motion duly made, ordered that its decision in the
case of Fuhrman & Forster Company, petitioner on re-
view, would be held controlling in all of the other three
cases. (R. 82.)

A motion for a stay of mandate in the other three cases
will be duly filed with the Circuit Court of Appeals, pend-
ing the decision of this Court in this proceeding.

The decision of the Board, dismissing the petition for
lack of jurisdiction, affirmed by the Circuit Court of Ap-
peals, leads to the conclusion that no person has a legal
right to recover the processing tax in controversy. The
public abattoir may not recover because it bore no part of
the burden of this tax, and petitioner may not recover,
even if it bore the full burden thereof, because it was not

4

the taxpayer, nor the person upon whom the tax was im-
posed.

The petitioner takes the position that it was the taxpayer
upon whom the processing tax was imposed under the
Agricultural Adjustment Act, and, having paid part of the
taxes in controversy directly to the United States, and
the balance directly to the ‘‘collection agent”’ specified by
an officer of the United States, that it is entitled under
the law to a recovery, at least to the extent of the tax
burden borne by it and not shifted to others.

Petitioner also takes the position that whether or not it
was the taxpayer who was obliged to pay the tax imposed
under the Agricultural Adjustment Act, it was a proper
claimant under Title VII, as Congress clearly intended a
remedy to those who immediately bore the burden of the
tax prior to the first movement of the taxed commodity
by a sale thereof into the channels of trade. Therefore,
if a public abattoir was the taxpayer, both the agent and
the owner have a right of recovery under the Act to the
extent of the tax burden borne.

Therefore, whether as taxpayer or the one who actually
paid the tax before the commodity moved into the chan-
nels of trade, the Board had jurisdiction to entertain this
proceeding in its entirety if Title VII, a remedial statute,
is liberally and equitably construed.

Petitioner believes that it has presented to the Board
and the courts, for the first time, the error of the Respond-
ent occurring early in 1934, which was the beginning of a
chain of events that has caused great, but avoidable, hard-
ship to petitioner and others similarly cireumstanced.
The problem here has become involved solely as a result
of a super-structure built upon the alleged false founda-
tion of an improper administrative ruling. The prob-
ability is that greater damage must follow until the rights
of the parties have been determined by a decision of this
Court.

a

DECISION OF THE CIRCUIT COURT OF APPEALS.

The decision of the United States Cireuit Court of Ap-
peals for the Seventh Circuit, affirming the order of dis-
missal of the United States Processing Tax Board of Re-
view, will be found in the record on pages 87 to 94, inclusive.
On October 1, 1940, that court entered an order denying a
petition for rehearing. (R. 95.)

i

REASONS RELIED UPON FOR ALLOWANCE
OF WRIT.

The writ of certiorari should be granted in this case for
the four reasons, which are more particularly presented in
the order stated in the following summary.

I. There is a present conflict between two Circuit Courts
of Appeal in the same matter.

II. The Circuit Court of Appeals for the Seventh Cir.
cuit in the instant case has decided a federal question in
a way in conflict with applicable decisions of this Court and
other federal courts.

III. The Cireuit Court of Appeals has decided an im-
portant question of federal law which has not been, but
should be settled by this Court.

IV. Title VII of the Revenue Act of 1936 is unconstitu-
tional as construed by the Circuit Court of Appeals, as it
does not provide an adequate remedy, and conflicts with
the Fifth Amendment to the Constitution of the United
States.

I.

There is now a conflict between the Circuit Court of Ap-
peals for the Second and Seventh Cireuits as to whether
the United States Processing Tax Board of Review or the
federal courts have jurisdiction to review the Commission-
er’s determination on particular claims for refund of proc- |
essing taxes paid.

In the case of Trunz Pork Stores, Inc. v. Rasquin, 100
Fed. (2d) 399, decided December 5, 1938, the Circuit Court
of Appeals for the Second Circuit held that the United
States District Courts were without jurisdiction to review
a claim for refund of processing taxes paid by claimant to

7

the United States. That court further held that under Title
VII the United States Processing Tax Board of Review did
have exclusive jurisdiction thereof.

The Circuit Court of Appeals for the Seventh Circuit
held in your petitioner’s case that with respect to the same
issue (as in the Trunz case above) that if a remedy existed,

the federal courts and not the Board had jurisdiction there-
of. (R. 93.)

Your petitioner has lost its right to appeal to the federal
courts on this question as the statute has tolled. It is un-
likely that the district courts or the Court of Claims would
entertain jurisdiction if this ease could now be taken to
those courts. Therefore, your petitioner is without remedy
except in praying for the issuance of a writ of certiorari.

It is urged that the decision of the Second Cireuit was
correct and that of the Seventh Circuit, in conflict there-
with, is in error.

II.

The Cireuit Court of Appeals for the Seventh Circuit,
in the instant case, has decided a federal question in con-
liet with applicable decisions of this Court and other fed-
eral courts.

The majority opinion of the Board, which was sustained
by the Circuit Court of Appeals, held that the Board did
not have jurisdiction under Title VII of the Revenue Act
of 1936, because (1) the petitioner was not the taxpayer
of the processing taxes in controversy either as to the
amount it paid directly to the United States, nor the larger
amount paid by it through a third person, and (2) that the
third person (a public abattoir) was the taxpayer.

The processing taxes imposed under the Agricultural Ad-
justment Act were excise taxes. It is well settled, that when
this Court and lower federal courts have decided certain

——

8

fundamental principles with respect to a particular form
of taxation, that Congress recognizes the application of
those decisions to subsequent similar legislation. Where
Congress intends a proper departure from such decisions,
the wording of the statute makes this intent clear. No in.
tent to depart from applicable prior decisions appears in
the Agricultural Adjustment Act under which the taxes in
controversy were imposed, paid, or collected, nor in Title
VII, the remedial statute.

Nowhere do we find a reference in that Act to a public
abattoir, nor authority to impose a tax upon such person,
In the discussion of that Act, including all amendments
thereto, by members of Congress, no reference whatsoever
is made to a public abattoir or custom slaughterer.

The assessment of processing taxes from such person
was entirely due to an informal ruling of the Commissioner
of Internal Revenue. (Internal Revenue Bulletin No. 20,
page 19.) (See Argument I of supporting brief, p. 29.) This
ruling was in direct conflict with well established Regula-
tions and Treasury Decisions that defined the meaning of —
taxpayer as related to excises. Those Regulations and
Treasury Decisions were pursuant to decisions of this Court
and lower federal courts.

This question is of great importance here, because had
not this informal ruling (in error) been made or followed,
it is reasonable to assume that both the Board and the Cir-
cuit Court of Appeals would have both held directly op-
posite to their decision in this case.

In the case of the Carbon Steel Co. v. Lwellyn, 251 U.S.
501, 64 L. Ed. 375, 40 S. Ct. 283, in construing the meaning
of ‘‘manufacturer’’ for tax purposes under the Munitions
Tax Act of September 8, 1916, this Court held that the per-
son who was the owner of the material, was the person
subject to the tax, notwithstanding the fact that the
owner had caused a large part of the manufacturing or

9

processing to be performed by subcontractors. (These sub-
contractors were independent contractors.)

In Warner-Patterson Co. v. U. S., 68 Ct. of Cl. 237, that

Court held that a corporation, which owned exclusive li-
censes to manufacture certain lenses, was the manufac-
turer or producer subject to the excise tax imposed under
Section 900 of the Revenue Act of 1924. The corporation
did not itself perform any labor necessary to produce the
lenses. It had engaged other persons (independent con-
tractors) for that purpose.
In the case of Stahmann, et al. v. Vidal, 305 U.S. 61, 59
§. Ct. 41 (which case arose under the Bankhead Cotton
Act), this Court held that the ginner (a custom processor,
also an independent contractor) was the *‘collecting agent”’
for the taxpayer with respect to the tax, and allowed a re-
covery to the owner of the cotton, who was not a ‘‘mere
volunteer’’ with respect to the tax in controversy.

Needless and irreparable injury to petitioner can readily
be avoided by the application of the equitable principles
laid down by this Court in the Stahmann case.

Petitioner’s contention is also supported by the following

cases with which the decision of the Circuit Court of Ap-

peals is in conflict.

White v. Hopkins, 51 Fed. (2d) 159.

Lukas v. Kentucky Distillers & Warehouse Co., 70
Fed. (2d) 883.

Il.

The Cireuit Court of Appeals has decided an important
question of federal law, which has not been, and should be
settled by this Court.

After this Court held the Agricultural Adjustment Act
unconstitutional, Congress incorporated Titles III and VII

i
JU

into the Revenue Act of 1936, which were related to each
other and to the Agricultural Adjustment Act. This case
has arisen under Title VII of that Act. It has been com.
monly recognized that those Titles were extremely difficult
to understand and to administer. The possibility of admin-
istrative and judicial mistakes is great, which, if occur,
may operate unfairly either to the Government, claimants,
or taxpayers.

This case is one of the first to reach this Court because
it is here on a question of jurisdiction. Undoubtedy many
other cases involving other questions of law under those
Titles will follow. A decision of this Court in the instant
case will be of inestimable value in enlightening all persons
now struggling with these difficult problems.

The decision of the Circuit Court of Appeals will create
greater hardship by its application to Title IIT. Under the
theory that this Court may consider the full effect of its
decision not only with respect to the matter at hand, but
also that which follows by necessary implication, this prob-
lem will be presented in the Brief (Argument III) support-
ing this petition.

The case of Arabi Packing Co., Inc. v. Commissioner, 109
Fed. (2d) 278, certiorari denied June 3, 1940, 60 S. Ct
1093, is not considered controlling nor applicable to this
case for the following reasons.

1. The Arabi Co. brought its action in a representative
capacity, not for itself as a taxpayer, but entirely for the
benefit of others. Title VII of the Revenue Act of 1936
clearly does not provide such a remedy.

2. If recognition is to be given to a public abattoir (cus-
tom processor) under Title VII, it is clear that the United
States District Courts or the United States Court of Claims
have concurrent jurisdiction thereof and not the Board.
The Circuit Court of Appeals for the Seventh Circuit in

11

the instant case has classified the claims arising under Title
VII and by its decision supports this contention.

3. The facts and the questions of law presented here are
different than those in the Arabi case. Petitioner respect-
fully contends that important matters are for the first time
brought to this Court in its supporting brief.

IV.

Petitioner believes that Title VII of the Revenue Act of
1936 can be reasonably construed to provide an adequate
relief to all persons who were directly affected by the im-
position of the illegal processing taxes. This is a remedial
statute.

The intent of Congress was to repeal previously existing
procedural methods and to establish a complete, special,
and exclusive remedy for all persons on all proper ques-
tions with respect to the refunding of processing taxes.
_ (Anniston Mfg. Co. v. Davis, 301 U. S. 337.)

The doctrine that remedial statutes are to be liberally
construed is well established. Federal Courts have repeat-
edly held that such statutes will be construed to include
cases Within the reason, although outside the letter of the
statute, and to include cases within the letter, but outside
the reason. All remedial statutes must be liberally con-
strued if necessary to reach and decide the merits of the
case,

In the case of Knowlton v. Moore, 178 U.S. 41, this Court
held that a particular construction must not produce in-
equality and injustice if another and more reasonable inter-
pretation is possible.

It is well known that in construing remedial statutes,
the courts will give due regard for the former law, the de-
fects or evils to be cured or abolished, or the mischief to

——

12

be remedied, and the remedy provided should be inter.
preted liberally.

Jones v. Virginia, 25 Fed. 666.

Seigel v. U. 8S. 18 Fed. (Supp.) 771.

Grier v. Kennan, 64 Fed. (2d) 605.

Detroit Hotel v. Brady, 275 Fed. 995.

The Circuit Court of Appeals recognized that petitioner
supplied the funds for payment of all the processing tax
in controversy. That Court recognized that part of the tax
was paid direct to the United States and the balance paid
to C. A. Burnette Company before that company remitted
to the United States. Yet, that Court found that neither
the petitioner nor any other person had a right to a recov-
ery under the provisions of this remedial statute.

Under Title VII, all of petitioner’s larger competitors
who owned killing floor facilities and slaughtered their own
hogs, appear to have the unquestioned right to recover the
processing taxes paid by them to the extent of the burden |
borne. Petitioner seeks justice only. It contends that this
statute is unconstitutional in that it discriminates between
persons of the same class, or the decision of the Circuit
Court of Appeals is in error.

This Court has held that an arbitrary selection can never
be justified by calling it a classification. And further held
that while there is no requirement that a classification be
scientifically accurate, it must be based on something more
than a ‘‘mere difference.” Gulf C. & F. S. R. T. Co. v,
Ellis, 165 U. S. 150.

In the case of Stewart Dry Goods Co. v. Lewis, 294 U.S.
553, this Court held that a classification must not be arbi-
trary or capricious but should rest upon some reasonable
or prevalent economic or social condition which can be
used to rationalize the distinguishment thus made.

The simple truth is that petitioner and its larger com-

13

petitors are all meat packing companies, yet the Circuit
Court of Appeals has decided that a remedial statute can
give rights to some and deny the same rights to others in
the same classification. To the extent that petitioner paid
the tax to the United States, that Court must be in error.
This seems equally true with respect to the balance of the
tax which petitioner was compelled to pay through a ‘‘col-
lection agent,’’ a ‘‘mere funnel,’’ to the United States.

Congress is without power to change a previously exist-
ing “‘Right’’ under the guise of a change in procedure. At
the time the processing taxes were collected, Sections 3226
and 3228 (U. S. C. A.) provided a simple but complete
remedy for the recovery of moneys illegally exacted. To
substitute therefor a remedy or a procedure which is not
fair and reasonable, but which is arbitrary and capricious,
can but result in the taking of property without due process,
and is in violation of the Fifth Amendment to the Constitu-
tion of the United States (Combes v. Getz, 285 U. S. 434;
Ettor v. Tacoma, 280 U. S. 148; Knickerbocker Trust Co. v.
Meyers, 133 Fed. 764).

Section 901 of Title VII repeals Sections 21 (d), 21 (e),
and 21 (g) of the Agricultural Adjustment Act. Section
0 of Title VII purports to eliminate the right to sue the
Collector with respect to processing taxes wrongfully col-
leted by him, which right had existed prior thereto.

Of the processing taxes in controversy, $2,589.13 (R. 43,
4) was paid directly to the Collector upon his demand and
10 part thereof has ever been refunded. Processing taxes
inthe amount of $13,711.23 (R. 19, 43) were also paid di-
rectly to the Collector, and no part thereof was refunded in
such a way so that it was available for the use or benefit
of the petitioner. Therefore, it is contended that a right
existed prior to the enactment of Title VII, which Congress
could not destroy. It is submitted that unless Title VIT
provides a full and adequate remedy for the recovery

14

thereof, then it is unconstitutional as conflicting with the
Fifth Amendment.

The interpretation of Title VII is not simplified by the
provision contained in Section 902 (b) thereof, which pro.
vides for the refund of processing taxes to a vendor, under
certain conditions, providing he has repaid unconditionally
such amount to his vendee. Section 902 (b) does not apply
to the facts in this case, nor is any actual relief provided
thereunder for your petitioner.

There was never a possibility that C. A. Burnette Com.
pany could make an unconditional repayment of the pro.
essing tax in controversy to the petitioner and others
similarly cireumstanced. It was financially unable to make
such a repayment. The condition if applicable was one
that was impossible to perform.

It is contended that C. A. Burnette Company was not the
vendor of the petitioner, but was the ‘‘collection agent”
for the United States with respect to the processing taxes
paid through it.

Respectfully submitted,
Rayrorp W. LEeMLey,
Attorney for Petitioner.

---

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