Arabi Packing Co. v. Commissioner

HOLMES, Circuit Judge. This appeal is from a decision of the United States Processing Tax Board of Review, dismissing for lack of jurisdiction a claim for refund of taxes paid under the Agricultural Adjustment Act, c. 25, 48 Stat. 31, 7 U.S.C.A. § 601 et seq. The case comes to this court by petition, pursuant to Section 906 (g) of the Revenue Act of 1936, c. 690, 49 Stat. 1648, 1750, 7 U.S.C.A. § 648 (g). The issue presented is whether the taxpayer’s petition for refund states facts sufficient to warrant recovery of the amount claimed. The taxpayer is a corporation, with its principal place of business at Arabi, Louisiana. Its petition filed with said Board of Review alleges that it slaughtered hogs for Viking Packing Company, Inc., and others who were engaged in the processing and wholesaling of meats; that these coprocessors furnished petitioner with funds to pay said taxes, which, under the regulations then in force, had to be paid solely by petitioner as the final processor; that, in the payment of these taxes, petitioner acted only as agent for its said principals who were barred from direct recovery, not having been the immediate disbursers of the cash to pay the taxes. Petitioner, therefore, sought recovery as agent of said co-processors. Processing taxes were imposed pursuant to Section 9 of the Agricultural Adjustment Act, supra, upon the first domestic processing of certain so-called basic agricultural commodities, including hogs. In United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914, and Rickert Rice Mills v. Fontenot, 297 U.S. 110, 56 S. Ct. 374, 80 L.Ed. 513 and 297 U.S. 694, 56 S.Ct. 438, 439, the Supreme Court held the taxing provisions of the act unconstitutional. Thereafter, under the Revenue Act of 1936, c. 690, 49 Stat. 1648, 1747, Title VII (Sections 901 to 917, 7 U.S.C.A. §§ 623 note, 644-659), the refund of amounts so collected were authorized by the Congress subject to certain conditions and limitations. Cf. Anniston Mfg. Co. v. Davis, 301 U.S. 337, 57 S.Ct. 816, 81 L.Ed. 1143. The Board of Review was given jurisdiction to review only claims of taxpayers who paid processing taxes upon the processing of commodities used in their own business. The amount sought to be recovered in this action represents taxes paid with respect to the processing of an agricultural commodity for customers for a charge or fee, and the Board of Review had no jurisdiction to review the Commissioner’s disallowance of the claim. The taxpayer, and not its customers, was held liable for the tax, and it was rpaid by petitioner as taxpayer and not as agent. The fact that the taxpayer required its customers to advance the funds with which to pay this tax did not make them liable under the law for such taxes. The additional amount collected for this purpose merely represented an additional charge for the services rendered. Suits for the recovery of taxes may be maintained against the Government only under such conditions and subject to such limitations as the Congress may prescribe. Collector v. Hubbard, 12 Wall. 1, 13, 14, 20 L.Ed. 272; Cheatham v. United States, 92 U.S. 85, 89, 23 L.Ed. 561; Arnson v. Murphy, 115 U.S. 579, 584-586, 6 S.Ct. 185, 29 L.Ed. 491; Kings County Savings Institution v. Blair, 116 U.S. 200, 206, 6 S.Ct. 353, 29 L.Ed. 657; United States v. Michel, 282 U.S. 656, 659, 51 S.Ct. 284, 75 L.Ed. 598; United States v. Jefferson Electric Co., 291 U.S. 386, 54 S.Ct. 443, 78 L.Ed. 859. Failure to comply strictly with the conditions upon which the Government consents to be sued is jurisdictional. United States v. Chicago Golf Club, 7 Cir,, 84 F.2d 914, 106 A.L.R. 209. This is true even though it attaches to its consent purely formal conditions. Rock Island, A. & L. R. Co. v. United States, 254 U.S. 141, 41 S.Ct. 55, 65 L. Ed. 188. An essential condition to the recovery of any amount paid as tax under the Agricultural Adjustment Act is contained in Section 902 of the 1936 Act, supra/ which provides that no refund shall be made unless the claimant establishes: [280] “(a) That he bore the burden of such amount and has not been relieved thereof nor reimbursed therefor nor shifted such burden, directly or indirectly, (1) through inclusion of such amount by the claimant, or by any person directly or indirectly under his control, or having control over him, or subject to the same common control, in the price of any article with respect to which a tax was imposed under the provisions of such Act [this chapter], or in the price of any article processed from any commodity with respect to which a tax was imposed under such Act [chapter], or in any charge or fee for services or processing; (2) through reduction of the price paid for any such commodity; or (3) in any manner whatsoever; and that no understanding or agreement, written or oral, exists whereby he may be relieved of the burden of such amount, be reimbursed therefor, or may shift the burden thereof; or “(b) That he has repaid unconditionally such amount to his vendee (1) who bore the burden thereof, (2) who has not been relieved thereof nor reimbursed therefor, nor shifted such burden, directly or indirectly, and (3) who is not entitled to receive any reimbursement therefor from any other source, or to be relieved of such burden in any manner whatsoever.” We think the decision of the Board should be affirmed, as both the claim for refund and the petition before the Board fail to show that the taxpayer has borne the burden of the amount claimed. Affirmed.