Kelly (Inspector of Taxes) v Cobb Straffan Ireland Ltd

• Jurisdiction: Ireland
• Judgment Date: 1993
• Date: 1993
• Court: High Court

Case stated on question of manufacturing relief - respondent company carries on business of producing day old chicks - whether day old chicks are goods within the meaning of FA 1980 - whether use of extensive plant machinery and skilled workers constitute a process of manufacturing - whether goods are required to be inanimate - whether question is one of degree - whether raw material in process was not the egg but twenty years of research - whether process is similar to fish farming which required a specific statutory exemption - whether respondent was producing as opposed to manufacturing day old chicks - whether chick is a product that could not be produced by a natural process - whether process constitutes manufacturing.

2. Every sixteen weeks a grandparent stock consisting of 19,000 chickens is imported from the UK

3. Each batch of chickens is culled at twenty weeks to between 8,000 and 8,500 to ensure standardisation.

4. The 8,500 hens are ready to lay at twenty five weeks and at sixty weeks the hens are disposed of.

5. There is an elaborate hatching out process of the eggs through a number of stages in “settler” machines in specially heated and humidified rooms. At nineteen days each egg is checked for presence of a chick and these eggs are then moved to a hatching room.

6. Finally the chicks are packed in purpose built containers for dispatch. Each package consists of 3,500 females and 450 males which are used as breeding stock by the company’s customers.

7. The company’s premises are liable to rates and the premises qualify for industrial buildings allowance.

Contentions of respondent

1. Raw material is an egg produced from imported stock, the end product being a day old chick.

2. The chick is a standardised product which could not be produced by a natural process.

3. The process is a wholly artificial, mechanical or manufacturing process.

4. The product with known potential is marketed as the “Cobb 500”.

5. Extensive plant, machinery and skilled workers are utilised.

6. The word “goods” has many varied and different meanings.

7. On the basis of the decisions in the McCann and Strand Dairy cases the question is one of degree. One must look at process carried on between the raw material and end product stages and seek to identify to what extent that process composed on the goods the characteristics which they are found to possess.

Contentions of appellant

1. Day old chicks are not goods within he meaning of FA 1980 s 39.

2. Goods, by their nature, are required to be inanimate.

3. Raw material in the process was not the egg but rather the twenty years of research which went into producing eggs with known chick breeding potential.

4. There is a similarity to the process of fish farming which required a special relieving provision in FA 1980 s 39(1)(a). Fish had the same criteria of production in genetic terms as the day old chicks.

5. On basis of the McCann and Strand Dairy decisions one had to look at the ultimate product. The company was producing as opposed to manufacturing day old chicks.

Decision of Circuit Court Judge

In view of decisions in the McCann and Strand Dairy cases and the Supreme Court decision in McCann.

I am constrained to hold that the production of day old chicks comes within the ambit of “Manufacture of Goods” for the purpose of obtaining relief...