Associates v SEAS, y

Associates v SEAS, y - [1926] HCA 47 - HCA 1926 case summary — Zoe

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law, but as a fact of life. Imay at oncesay that I agree with what Mr. Cleland said as to the "original package" doctrine. It is" in many cases a convenient working rule, but it is not by any means a legal test. In some cases it is either impossible of application from the nature of the commodity, or is attended with added circumstances which render it of little or no value. I put it aside for present purposes. The one relevant question always is: Are the given transactions in the circumstances part of trade and commerce among the States? The most valuable assistance as - to this from the American Supreme Court is that found in such a case as Swift & Co. v. United States (1), followed in Stafford y, Wallace (2), Champlain Realty Co. v. Brattleboro (3) and Chicago Board of Trade v. Olsen (4); and Missouri v. Kansas Natural Gas Co, (5). : From these cases I gratefully draw very valuable, because practical, aid, not only for the present case, but for many others involving the interpretation of the Constitution. In the forefront, as it contains a great principle, I place Chicago Board of Trade v. Olsen. There Taft C.J. (4) referred to Swift's Case (6). He said it was a milestone in the interpretation of the commerce clause of the Constitution. He said that, as his succeeding words show, because the Court which decided the case brought to it, as one of the great organs of the national Government, a conscioustiess of the movements and current circumstances of national life, and, because ~ it was possible from the point of view of legal construction, applied - the words of the Constitution as it would apply the principles of the common law to meet new conditions. The learned Chief Justice (4) said of Swift's Case: - 'It recognized the great changes and development in the business of this vast country and drew again the dividing line between inter-State and intra-State commerce where the Constitution intended it to be. It refused to permit local incidents of great inter-State movement, which taken alone were intra-State, to characterize the movement as such. The Swift Case merely fitted the commerce clause to the real and practical

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incorporated is plainly a tax on imports (1). The importer has the right not only to bring the article into the State without State taxation, but also to mix it with the mass of property in the 'State; and a tax on the sale of an article is a tax on the article itself (2). Until incorporation with the mass of other property the inter-State movement has not completely determined (Rosen- berger v. Pacific Express Co. (3) ). A trader in Melbourne may send a truck-load as far as Adelaide, intending to sell the goods in Perth (W.A.), or in Broken Hill (N.S.W.); but while the goods care in truck in Adelaide, an Adelaide merchant may desire to buy them; and this South Australian tax, if valid, obstructs such a dealing. Ever since Brown v. Maryland (4) the same principle has been recognized (Welton v. Missouri (5) ). In Leisy v. Hardin (6) it was laid down that the point of time at which "the power of the State to tax commences, is not the instant when the article enters the country, but when the importer has so acted upon it that it has become incorporated and mixed up with the mass of property in the country"; and "the tight to sell any article 'imported was an inseparable incident to the right to import it." To determine the point where the Commonwealth power ends -and the State's power begins is often difficult; and in this Court there has been considerable discussion as to sec. 92 in particular, -and freedom of commerce between the States. The case of W. & A. McArthur Ltd. v. Queensland (7) has been referred to by counsel .in this argument. There was a previous case (Duncan v. Queensland (8) ) which established that the power of the State to legislate for the State remains undisturbed subject to the precise restrictions imposed by the Constitution ; and in the present case this tax on salés after actual entry is said to be within the power of the State. Tt is true that in the McArthur Case certain members of this Court expressed a desire to overrule the decision in Duncan's Case. Yet in McArthur's Case counsel did not even urge that Duncan's Case was wrong - they purported to distinguish it; and

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itself, this express reference to the existing States' customs and excise duties, lift the question of the meaning of sec. 90 out of the quagmire of dictionary meanings. According to the Ozford Dictionary, " excise" has as its first meaning " any toll or tax " ; but the denotation of the term (and, incidentally, the connotation of the term, so far as definite) has greatly fluctuated. The very spelling of the word is due to a mistake as to the derivation. According to the Encyclopaedia Britannica (1878), 9th ed., " excise " is a duty charged on home goods, either in the process of their manufacture or before their sale to the home consumers. The analogous tax in the Roman law, the vectigal rerum venalium, was a tax levied on all commodities sold by auction or in public market. I take it that, whatever may be the differences in English and in American usage, '' customs and excise" are correlative words for indirect taxes, such taxes as enter at once into the price of the taxed commodity (see Bank of Toronto v. Lambe (1)); and that for the purpose of sec. 90 and our Constitution as a whole, customs duty is a duty on the importation or exportation whether by land or by sea; whereas excise duty means a duty on the manufacture, production, &c., in the country itself; and it matters not whether the duty is imposed at the moment of actual sale or not, or sale and delivery, or consumption. The case of Patton v. Brady (2) estab- lished, for the United States, that a tax on manufactured tobacco, imposed at a period intermediate between the commencement of manufacture and the final consumption of the article, is an excise tax. In my opinion, therefore, the duties which sec. 4 (with sec. 2) and sec. 7 impose, are duties of customs and excise, and must be treated as invalid under sec. 90 of the Constitution. This opinion is quite consistent with the decision of this Court in Peterswald v. Bartley (3), which established that a licence tax on brewers in New South Wales is not a duty of excise within sec. 90.

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Judgment (216 paragraphs)

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