Sammers

(The Lord President, Lords Skerrington, v. Upper

Cullen, and Sands.)
District
Committee
of the

25th November 1924. County Council 1. Summers v. Upper District Committee of the

of the County Council of the County County of

of Renfrew. Renfrew. November 25, Revenue-Income tax— Exemption - Sewers Finance

Act, 1921 (11 & 12 Geo. V. cap. 32), section 34 Public Health (Scotland) Act, 1897 (60 & 61 Vict. cap. 38), sections 108 and 108—“ Sewers," defined as sewers maintained by local authority under their statutory duties in relation to public health, exempted from income tax ander Finance Act, 1921, section 84 — Held that the exemption conferred by the Finance Act, 1921, when construed with reference to the statutory powers conferred by sections 103 and 108 of the Public Health (Scotland) Act, 1897, did not include sewage purification works.

1924.

sewers

Exchequer Cause.

The First or Upper District Committee of the County Council of the County of Renfrew appealed to the Commissioners for the General Purposes of the Income Tax Acts and for executing the Acts relating to inhabited house duties for the Upper Ward of Renfrewshire against assessments under Schedule A of the Income Tax Acts for the year ending 5th April 1922 in respect of certain sewers and sewage works.

The Commissioners sustained the appeals and discharged the assessments. At the request of the Inspector of Taxes they stated a case for appeal to the Court of Session.

The case set forth, inter alia : I. The following facts were admitted : (1) The sewers and sewage works and their

annual value as per the Valuation Roll are as follows:

Valuation Total of Sewage Valua.

Works. tion, Corkerhill

£37 £55 Eaglesham

34 62 Elderslie

67 131 Giffinock

179 184 363 Neilston 112 105

217 Newton Mearns 83

100

(2) The sewers and sewage works have been

constructed by, and are under the control and jurisdiction of, and are maintained and administered by, the respondents as Local Authority under the Public Health (Scotland) Act, 1897, and Acts explaining and amending the same, and constitute the public sewerage system within the following special drainage districts formed by the respondents under and for the purposes of the Public Health (Scotland) Acts, viz. Corkerbill, Eaglesham, Elderslie,

Giffnock, Neilston, and Newton Mearns. (3) The parts of the sewerage system above described as

consisting solely of pipes for the conveyance of sewage but without any provision for treatment thereof are exempt under the provisions of section 34 of the Finance Act, 1921, and the assessments would fall to be reduced as follows: Corkerhill to

£37 Eaglesham to

34 Elderslie to

67 Giffnock to

184 Neilston to

105 Newton Mearns to

17 (4) It is necessary to treat the crude sewage

before discharging it into watercourses in order to avoid producing a nuisance and polluting the stream. The sewage works are placed near the point of outfall for each drainage district. The sewage from the district is conveyed by the sewer pipes to the works in a crude state, and by them it is conveyed at a much slower rate, and while in transit it is subjected, owing to the retardation of flow, to bacterial treatment by which the noxious matters are broken up and neutralised, and the sewage after being passed through the filters and other aerating and purifying processes leaves the works by the outfall channel as a comparatively purified effluent with the exception of a certain quantity of sludge, mud, or grit which remains in the grit chambers or septic

tanks. (5) All the sewage works, except those at

Newton Mearns, may be described as consisting of pipes or concrete, or built channels, whereby the crude sewage is conveyed from the inlet sewer or

Valuation of Sewers. £18 28

64

17

The sewage

(3) That the definition of the term " sewer IST Drv. is to be found in section 103 of the

Summers Public Health (Scotland) Act, 1897;

v. Upper (4) That in Renfrewshire there are no sewers

District running into the sea.

is

Committee treated in bacterial method and the of the effluent led into a river. The Corpora- County tion of the City of Glasgow has power Council to prevent anyone putting crude of the sewage into any water leading into the County of River Clyde;

Renfrew. (5) That the meaning of “ sewers

could not Novembor 25, be restricted to the drain-pipes, but that

1924.
sewers comprise the whole works dis-
posing of the sewage, including both the
pipes and what for convenience are
called sewage purification works and

which themselves include pipes ;
(6) That the whole system-pipes and works

-is a sewer within the meaning of
section 103 of the Public Health (Scot-

land) Act, 1897; and
(7) That the word "sewers" should not be

interpreted according to its popular
meaning, but according to its technical
legal meaning as contained in the

Public Health Acts;
(8) That as the disposal works do not earn

profit but are incapable of earning profit
and a source of expense they are not

liable to assessment to income tax.
III. H.M. Inspector of Taxes, Mr L. B. Summers,

for the Crown contended :
(1) That prior to 1921, both sewers and sewage

purification works were liable to in

come tax;
(2) That the exemption granted by the

Finance Act, 1921, does not extend to
sewage purification works.

The ex-
pression

is defined in subsection 2 of section 34, and the works

are not included in the definition ; (3) That the word

gewer must be given
its ordinary meaning, which is that it
is a drain-pipe or underground passage

for carrying off sewage ;
(4) That sewage purification works are certain

buildings and apparatus erected for
the purposes of treating the sewage to
render it innocuous and are not any
portion of the sewers. An ordinary
individual would not call the works

sewers”; and
(5) That section 103 of the Public Health

(Scotland) Act, 1897, did not define

sewer, but simply gave a local authority power to lay sewers and erect suitable buildings and apparatus for the

disposal of the sewage.
IV. The Commissioners on consideration of the

facts and arguments submitted to them
were of opinion that on a sound construction
of the exemption in section 34 (1) of the
Finance Act, 1921, it was not limited to
the actual channel or pipe in which sewage
is conveyed to a certain spot for disposal, but
includes works for the disposal or treatment
of sewage which have been constructed by

sewer