Charles Mccann Ltd v Ó Culacháin

• Jurisdiction: Ireland
• Judge: McCARTHY J.
• Judgment Date: 30 June 1986
• Date: 30 June 1986
• Docket Number: [S.C. No. 299 of 1985],(299/85)
• Court: Supreme Court

CHARLES MCCANN LTD v. O CULACHAIN INSPECTOR OF TAXES

BETWEEN/

CHARLES McCANN LIMITED

Appellant

AND

S. O'CULACHAIN, INSPECTOR OF TAXES

Respondent

1986 WJSC-SC 265

Finlay C.J.

Hederman J.

McCarthy J.

(299/85)

THE SUPREME COURT

Synopsis:

REVENUE

Corporation tax

Relief - Manufactured goods - Export - Bananas - Imported unripened fruit - Taxpayer ripening bananas artificially in Ireland by use of ethylene gas in specially constructed chambers - Transformation of fruit - Question of degree - Purposive construction of statute - Held that bananas so ripened were "goods manufactured within the State" within s.54 of Act of 1976 - Decision of High Court (1/5/85) reversed - Corporation Tax Act, 1976, s.54 - (299/85 - Supreme Court - 30/6/86) - [1986] IR 196

|Charles McCann Ltd. v. O'Culachain|

WORDS AND PHRASES

"Manufactured"

Revenue - Corporation tax - Relief - Manufactured goods - Export - Bananas - Fruit ripened in the State by specified artificial process - Held that ripened bananas were "goods manufactured" in the State within s.54 of Act of 1976 - Decision of High Court (1/5/85) reversed - Corporation Tax Act, 1976, s.54 - (299/85 - Supreme Court - 30/6/86) - [1986] IR 196

|Charles McCann Ltd. v. O'Culachain|

Citations:

CORPORATION TAX ACT 1976 PART IV

CORPORATION TAX ACT 1976 S54

CORPORATION TAX ACT 1976 S58

CRONIN (INSPECTOR OF TAXES) V STRAND DAIRIES LTD UNREP 18.12.85. 1986/1/358

DENTISTS ACT 1928

FINANCE ACT 1980 S41(2)

FINANCE ACT 1982 S26 SCHED 2

INSPECTOR OF TAXES V KIERNAN 1981 IR 117 1982 ILRM 13

MCCAUSLAND V MIN COMMERCE 1956 NILR 36

OPTICIANS ACT 1956

SOLICITORS ACT 1954

1 JUDGMENT delivered on the 30th day of June1986by McCARTHY J. (NEM. DISS.)

2 The question of law stated for the High Court by the then President of the Circuit Court and now the subject of this appeal is "whether not withstanding my finding of fact that the bananas were processed in this country by the appellant, I am correct in holding that the ripened bananas are not goods within the meaning of s.54 of the Corporation Tax Act, 1976." The High Court (Carroll J.) confirmed the Circuit Court holding and the company appeals raising for consideration the true construction of s. 54 of the Corporation Tax Act, 1976which, so far as relevant, reads:-

3 2 "(1) In this Part "goods" means goods manufactured within the State by the person who exports them or some of them and who in relation to the relevant accounting period is the company claiming relief under this Part.

4 (2) The definition of "goods" contained in sub-section (1) shall include-

5 (a) fish produced within the State on a fish farm; and

6 (b) cultivated mushrooms, cultivated within the State,

7 and, in a case in which books or greeting cards are printed within the State otherwise than by their publisher and they or some of them are exported by their publisher (not being a case to which the proviso to subsection (1) applies), the books or greeting cards, as the case may be, shall be regarded, for the purposes of subsection (1), as having been manufactured within the State by their publisher.

8 a (3)(a) The definition of "goods" contained in subsection (1) shall include goods manufactured within the State which do not come within that definition and which are exported by the person who in relation to the relevant accounting period is the company claiming relief under this Part where the selling by such person of the goods so exported is selling by wholesale.

9 (b) "Selling by wholesale" in paragraph (a) means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by him."

10 S. 58 creates an entitlement to relief from Corporation tax in respect of these goods, in certain specified circumstances. These sections and a number of others from s. 53 to 68 form Part IV of the Act under the heading "Profits from export of certain goods."

11 The company imports unripe bananas from Ecuador and Colombia and, at its premises in Dublin subjects the bananas to what Carroll J. correctly described as a complex and costly process of ripening artificially by ethylene gas in specially constructed and equipped ripening rooms, a process requiring special expertise but not professional qualifications. The process is described in detail in the case stated and the documents appended thereto. The learned President of the Circuit Court considered the...