Lord
THANKERTON
:—This
is
an
appeal
from
the
judgment
of
the
Court
of
Appeal
for
British
Columbia,
ante,
p.
197,
which
affirmed,
with
one
dissentient,
the
judgment
of
the
Chief
Justice
of
the
Supreme
Court
of
British
Columbia,
ante,
p.
194,
by
which
the
appellant’s
action
for
recovery
of
tax
from
the
respondent
was
dismissed.
The
appellant
seeks
to
recover
the
tax
by
virtue
of
the
provisions
of
the
Fuel-oil
Tax
Act,
1930
(B.C.),
ce.
71,
as
amended
by
the
Fuel-oil
Tax
Act
Amendment
Act
1932
(B.C.),
ce.
51.
The
issue
in
the
case
is
whether
the
legislation
in
question
is
ultra
vires
of
the
Provincial
Legislature
in
respect
either
(a)
that
the
taxation
imposed
thereby
is
not
‘‘Direct
Taxation”
within
the
terms
of
sec.
92(2)
of
the
B.N.A.
Act,
1867,
or
(b)
that
it
invades
the
exclusive
right
of
the
Dominion
under
sec.
91(2)
to
legislate
for
the
“Regulation
of
Trade
and
Commerce’’.
The
material
provisions
of
the
Act
of
1930,
as
amended
by
the
Act
of
1932,
are
as
follows:
“2.
For
the
raising
of
a
revenue
for
Provincial
purposes
every
person
who
consumes
any
fuel-oil
in
the
Province
shall
pay
to
the
Minister
of
Finance
a
tax
in
respect
of
that
fueloil
at
the
rate
of
one-half
cent
a
gallon.
"
"
3.
The
tax
imposed
by
this
Act
shall
be
paid
and
collected
at
such
times
and
in
such
manner
as
the
regulations
may
prescribe.
“4.
The
amount
of
any
tax
imposed
by
this
Act
may
be
recovered
by
action
in
any
Court
as
for
a
debt
due
to
the
Crown
in
right
of
the
Province,
and
the
Court
may
make
an
order
as
to
the
costs
of
the
action
in
favour
of
or
against
the
Crown.
“
(2)
In
every
action
for
the
recovery
of
any
tax
imposed
by
this
Act,
the
burden
of
proving
the
quantity
of
fuel-oil
consumed
by
the
defendant,
and
of
proving
that
the
tax
has
been
paid
in
respect
of
the
fuel-oil
in
question,
shall
be
upon
the
defendant.
[1932
(Man.),
c.
51,
s.
2.]
“5(1)
Upon
the
expiration
of
thirty
days
after
the
commencement
of
this
Act,
no
person
shall
keep
for
sale
or
sell
fuel-oil
in
the
Province
unless
he
is
the
holder
of
a
licence
issued
pursuant
to
this
section
in
respect
of
each
place
of
business
at
which
fuel-oil
is
so
kept
for
sale
or
sold
by
him.
“
(2)
The
manner
of
application
and
the
forms
of
application
and
of
the
licence
shall
be
as
prescribed
in
the
regulations.
A
licence
fee
of
one
dollar
shall
be
payable
in
respect
of
each
licence.
“(3)
The
Minister
of
Finance
may,
without
holding
any
formal
or
other
hearing,
cancel
any
licence
issued
pursuant
to
this
section
if
the
licensee
is
convicted
of
any
offence
against
this
Act,
and
may
during
the
period
of
twelve
months
next
succeeding
the
cancellation
of
that
licence
refuse
to
issue
any
new
licence
to
the
person
so
convicted.
"6(1)
Every
collector,
constable,
and
every
person
authorized
in
writing
by
the
Minister
of
Finance
to
exercise
the
powers
of
inspection
under
this
section
may
without
warrant
enter
upon
any
premises
on
which
he
has
cause
to
believe
that
any
fuel-oil
is
kept
or
had
in
possession,
and
may
inspect
the
premises
and
all
fuel-oil
found
thereon,
and
may
interrogate
any
person
who
is
found
on
the
premises
or
who
owns,
occupies,
or
has
charge
of
the
premises.
(2)
Every
person
interrogated
under
this
section
who
refuses
or
fails
to
answer
any
question
put
to
him
respecting
the
fuel-oil
kept
or
had
on
the
premises,
or
who
refuses
or
fails
to
produce
for
inspection
or
to
permit
inspection
of
any
book,
record,
or
document,
or
any
barrel,
tank,
or
receptacle
in
his
possession
or
under
his
control
which
he
is
required
to
produce
for
inspection
or
of
which
he
is
required
to
permit
inspection,
shall
be
guilty
of
an
offence
against
this
Act.
"7(1)
Every
person
who
consumes
any
fuel-oil
in
the
Province
and
every
person
who
keeps
for
sale
or
sells
fuel-oil
in
the
province
shall
keep
such
books
and
records
and
shall
make
and
furnish
such
returns
as
are
prescribed
in
the
regulations.
‘
‘
(2)
Every
person
who
refuses
or
fails
to
keep
any
book
or
record
or
to
make
and
furnish
any
return
prescribed
by
the
regulations,
or
who
withholds
any
entry
or
information
required
by
the
regulations
to
be
made
or
entered
in
any
book,
record,
or
return,
or
who
makes
any
false
or
deceptive
entry
or
statement
in
any
such
book,
record,
or
return
shall
be
guilty
of
an
offence
against
this
Act.
‘
‘
The
respondent
challenges
the
validity
of
the
tax
on
three
grounds,
viz.:
(a)
That
in
its
nature
it
is
either
an
import
duty
or
a
duty
of
excise,
and
therefore
falls
into
the
category
of
indirect
taxes
;
(
b
)
that
it
is
not
direct
taxation
in
respect
that
the
burden
may
be
passed
on;
and
(c)
that
it
invades
the
legislative
sphere
of
the
Dominion
Parliament
in
regard
to
regulation
of
trade
and
commerce.
The
respondent’s
first
contention
is
that
the
tax
here
in
question
is
a
customs
or
excise
duty,
according
to
the
general
understanding
current
in
1867,
and
that
all
customs
and
excise
duties
are
without
the
competence
of
a
Provincial
Legislature,
apart
from
any
question
whether
the
tax
is
"‘demanded
from
the
very
person
who
it
is
intended
or
desired
should
pay
it’’.
For
this
construction
he
prays
in
aid
see.
122
of
the
Act
of
1867,
and,
in
order
to
establish
that
the
present
tax
was
in
the
nature
of
a
customs
or
excise
duty,
he
relied
on
the
definitions
of
political
economists
and
the
course
of
custom
and
excise
legislation
in
this
country
up
to
1867.
In
their
Lordships’
opinion
this
contention
is
inconsistent
with
the
decisions
of
this
Board,
which
go
back
to
the
year
1878,
and
have
settled
that
the
test
to
be
applied
in
determining
what
is
"‘Direct
Taxation’’
within
the
meaning
of
sec.
92(2)
of
the
B.N.A.
Act
of
1867
is
to
be
found
in
Mill’s
definition
of
direct
and
indirect
taxes.
[2
Mill
on
Political
Economy,
Book
V,
c.
3,
p.
367.]
In
A.-G.
Que.
v.
Queens
Ins.
Co.
(1878)
3
App.
Cas.
1090,
a
provincial
tax
on
policies
of
assurance
was
held
to
be
of
the
nature
of
a
stamp
duty
and
not
a
licence
duty,
and
to
be
an
indirect
tax.
The
duty
was
thus
described
in
the
Judgment
of
the
Board
(p.
1098)
:
"‘They
say
on
the
face
of
the
statute,
‘The
price
of
each
licence
shall
consist’,
and
so
on.
But
it
is
not
a
price
to
be
paid
by
the
licensee.
It
is
a
price
to
be
paid
by
anybody
who
wants
a
policy,
because,
without
that,
no
policy
can
be
obtained.
It
may
be
that
the
company
buys
the
adhesive
stamps,
and
affixes
them;
or
it
may
be
that
the
assured
buys
the
adhesive
stamps,
and
affixes
them,
or
pays
an
officer
of
the
company
the
money
necessary
to
purchase
them
and
affix
them
;
but
whoever
does
it
complies
with
the
Act.”
It
is
difficult
to
conceive
a
stamp
duty
to
which
such
a
description
would
not
apply,
and
the
Board
found
it
unnecessary
to
consider
the
scientific
definition
of
‘‘
direct
taxation”.
In
A.-G.
Que.
v.
Reed
(1884)
10
App.
Cas.
141,
a
provincial
duty
of
10
cents
upon
every
exhibit
filed
in
Court
in
any
action
depending
therein
was
held
not
to
be
direct
taxation,
and
Mill’s
definition
was
applied.
Lord
Selborne,
L.C.,
in
delivering
the
judgment
of
the
Board,
said
(p.
144)
:
"
"
The
legislature,
in
imposing
the
tax,
cannot
have
in
contemplation,
one
way
or
the
other,
the
ultimate
determination
of
the
suit,
or
the
final
incidence
of
the
burden,
whether
upon
the
person
who
had
to
pay
it
at
the
moment
when
it
was
exigible,
or
upon
anyone
else.
.
.
.
As
in
all
other
cases
of
indirect
taxation,
in
particular
instances,
by
particular
bargains
and
arrangements
of
individuals,
that
which
is
the
generally
pre-
sumable
incidence
may
be
altered.
An
importer
may
be
himself
a
consumer.
When
a
stamp
duty
upon
transactions
of
purchase
and
sale
is
payable,
there
may
be
special
arrangements
between
the
parties
determining
who
shall
bear
it.
The
question
whether
it
is
a
direct
or
an
indirect
tax
cannot
depend
upon
those
special
events
which
may
vary
in
particular
cases
;
but
the
best
general
rule
is
to
look
to
the
time
of
payments:
and
if
at
the
time
the
ultimate
incidence
is
uncertain,
then,
as
it
appears
to
their
Lordships,
it
cannot,
in
this
view,
be
called
direct
taxation
within
the
meaning
of
the
2nd
section
of
the
92nd
clause
of
the
Act
in
question.’’
It
is
clear
that
‘‘ultimate
incidence’’
is
not
there
used
in
the
sense
of
the
political
economists,
but
refers
to
the
ultimate
incidence
among
the
parties
to
the
transaction
in
respect
of
which
the
tax
is
imposed.
Mill’s
definition
was
definitely
established
as
the
most
satisfactory
test
in
Bk.
of
Toronto
v.
Lambe
(1887)
12
App.
Cas.
575,
in
which
a
provincial
tax
on
banks
varying
in
amount
with
the
paid-up
capital
and
with
the
number
of
their
offices,
was
held
to
be
direct
taxation.
It
may
be
noted
that
an
argument
was
unsuccessfully
submitted
to
the
effect
that
the
tax
would,
according
to
the
views
of
the
English
Legislature,
be
regarded
as
a
licence
or
excise
duty,
at
all
events
for
the
purpose
of
collection,
and
that
it
was
not
intended
to
include
any
such
taxes
in
the
term
""Direct
Taxation’’
in
sec.
92
(2).
The
following
passage
may
be
quoted
from
the
judgment
of
the
Board,
delivered
by
Lord
Hobhouse,
viz.
(pp.
582-3)
:—
‘‘
After
some
consideration
Mr.
Kerr
chose
the
definition
of
John
Stuart
Mill
as
the
one
he
would
prefer
to
abide
by.
That
definition
is
as
follows
:—
“Taxes
are
either
direct
or
indirect.
A
direct
tax
is
one
which
is
demanded
from
the
very
persons
who
it
is
intended
or
desired
should
pay
it.
Indirect
taxes
are
those
which
are
demanded
from
one
person
in
the
expectation
and
intention
that
he
shall
indemnify
himself
at
the
expense
of
another;
such
are
the
excise
or
customs.
“
“The
producer
or
importer
of
a
commodity
is
called
upon
to
pay
a
tax
on
it,
not
with
the
intention
to
levy
a
peculiar
contribution
upon
him,
but
to
tax
through
him
the
consumers
of
the
commodity,
from
whom
it
is
supposed
that
he
will
recover
the
amount
by
means
of
an
advance
in
price.’
“It
is
said
that
Mill
adds
a
term—that
to
be
strictly
direct
a
tax
must
be
general;
and
this
condition
was
much
pressed
at
the
bar.
Their
Lordships
have
not
thought
it
necessary
to
examine
Mill
‘s
works
for
the
purpose
of
ascertaining
precisely
what
he
does
say
on
this
point;
nor
would
they
presume
to
say
whether
for
economical
purposes
such
a
condition
is
sound
or
unsound;
but
they
have
no
hesitation
in
rejecting
it
for
legal
purposes.
It
would
deny
the
character
of
a
direct
tax
to
the
income
tax
of
this
country,
which
is
always
spoken
of
as
such,
and
is
generally
looked
upon
as
a
direct
tax
of
the
most
obvious
kind;
and
it
would
run
counter
to
the
common
understanding
of
men
of
this
subject,
which
is
one
main
clue
to
the
meaning
of
the
legislature.
"Their
Lordships
then
take
Mill’s
definition
above
quoted
as
a
fair
basis
for
testing
the
character
of
the
tax
in
question,
not
only
because
it
is
chosen
by
the
Appellant’s
counsel,
nor
only
because
it
is
that
of
an
eminent
writer,
nor
with
the
intention
that
it
should
be
considered
a
binding
legal
definition,
but
because
it
seems
to
them
to
embody
with
sufficient
accuracy
for
this
purpose
an
understanding
of
the
most
obvious
indicia
of
direct
and
indirect
taxation,
which
is
a
common
understanding,
and
is
likely
to
have
been
present
to
the
minds
of
those
who
passed
the
Federation
Act.’’
On
the
terms
of
that
judgment
it
might
have
been
open
to
the
present
respondent
to
maintain
that
Mill’s
definition
was
not
the
only
alternative
as
a
test,
but
such
a
contention
is
excluded
by
later
decisions
of
the
Board,
to
which
their
Lordships
will
next
refer.
In
Brewers
Malt
st
er
s
y
Ass’n
of
Ontario
v.
A.-G.
Ont.,
[1897]
A.C.
231,
the
Liquor
Licence
Act
of
Ontario,
which
required
every
brewer
and
distiller
to
obtain
a
licence
thereunder
to
sell
wholesale
within
the
Province,
was
held
to
be
intra
vires
of
the
Provincial
Legislature
(a)
as
being
direct
taxation
under
sec.
92(2)
and
(b)
as
comprised
within
the
term
"‘other
licences’’
in
subsec.
9
of
the
same
section.
There
was
a
uniform
fee
of
$100
in
all
cases.
This
decision
disposes
of
any
argument
that
licenses
were
expressly
mentioned
in
subsec.
9,
because
they
are
not
direct
taxation,
and
would
not
have
been
included
in
subsec.
2.
Further,
such
a
duty
would
be
treated
for
collection
as
an
excise
duty
in
this
country.
The
decision
in
Lambe’s
case
was
followed.
In
Cotton
v.
The
King
(1913)
15
D.L.R.
283,
which
related
to
succession
duties,
Lord
Moulton,
in
delivering
the
judgment
of
the
Board,
pointed
out
that
until
the
Act
of
1867
was
passed
the
division
of
taxation
into
direct
and
indirect
belonged
solely
to
the
province
of
political
economy
so
far
as
the
taxation
in
Great
Britain
or
Ireland
or
in
any
of
the
colonies
was
con-
cerned,
and
that
there
could
not
be
said
to
have
existed
any
recognized
definition
of
either
class
which
was
universally
accepted;
but
that,
as
soon
as
the
Act
was
passed
it
became
essential
that
the
Courts
should,
for
the
purposes
of
that
statute
ascertain
and
define
the
meaning
of
the
phrase
"‘direct
taxation”
as
used
in
such
legislation.
After
reviewing
the
three
cases
of
Reed,
Lambe
and
BrewersMaltsters
9
Ass’n
already
referred
to,
Lord
Moulton
stated
(pp.
291-2)
:—
“Their
Lordships
are
of
opinion
that
these
decisions
have
established
that
the
meaning
to
be
attributed
to
the
phrase
‘direct
taxation’
in
sec.
92
of
the
British
North
America
Act,
1867,
is
substantially
the
definition
quoted
above
{i.e.,
in
Lambe
9
s
case)
from
the
treatise
of
John
Stuart
Mill,
and
that
this
question
is
no
longer
open
to
discussion.
‘
‘
These
decisions,
in
their
Lordships’
opinion,
make
clear
that
if
the
tax
is
demanded
from
the
very
persons
who
it
is
intended
or
desired
should
pay
it,
the
taxation
is
direct,
and
that
it
is
none
the
less
direct,
even
if
it
might
be
described
as
an
excise
tax,
for
instance,
or
is
collected
as
an
excise
tax.
Among
the
numerous
subsequent
decisions
of
the
Board,
the
respondent
was
only
able
to
refer
to
two,
as
containing
any
suggestion
to
the
contrary,
viz.,
Halifax
v.
Fairbanks
[1927]
4
D.L.R.
945,
and
A.-G.
B.C.
v.
Macdonald
Murphy
Lbr.
Co.
[1930]
2
D.L.R.
721.
In
Fairbanks
9
case
a
City
Charter,
enacted
by
the
Provincial
Legislature,
imposed
a
‘‘business
tax”
to
be
paid
by
every
occupier
of
real
property
for
the
purposes
of
any
trade,
profession
or
other
calling
carried
on
for
the
purposes
of
gain.
Where
the
property
was
let
to
the
Crown
or
to
any
person
exempt
from
taxation,
the
owner
was
to
be
deemed
to
be
the
occupier,
and
was
to
be
assessed
for
business
tax
according
to
the
purposes
for
which
it
was
occupied.
The
property
in
question
was
let
to
the
Crown,
and
the
respondent
estate,
as
owner,
had
been
assessed
to
the
tax.
It
was
held
that
the
tax
was
direct
taxation
even
though
the
owner
probably
would
seek
to
pass
it
on
to
the
tenant.
Lord
Case,
who
delivered
the
judgment
of
the
Board,
stated
in
regard
to
the
Act
of
1867
(pp.
949-50)
:—
‘‘The
framers
of
that
Act
evidently
regarded
taxes
as
divisible
into
two
separate
and
distinct
categories,
namely,
those
that
are
direct
and
those
which
cannot
be
so
described,
and
it
is
to
taxation
of
the
former
character
only
that
the
powers
of
a
provincial
government
are
made
to
extend.
From
this
it
is
to
be
inferred
that
the
distinction
between
direct
and
indirect
taxes
was
well
known
before
the
passing
of
the
Act;
and
it
is
undoubtedly
the
fact
that
before
that
date
the
classification
was
familiar
to
statesmen
as
well
as
to
economists,
and
that
certain
taxes
were
then
universally
recognized
as
falling
within
one
or
the
other
category.
Thus,
taxes
on
property
or
income
were
everywhere
treated
as
direct
taxes.
.
.
.
On
the
other
hand,
duties
of
customs
and
excise
were
regarded
by
everyone
as
typical
instances
of
indirect
taxation.
When
therefore
the
Act
of
Union
allocated
the
power
of
direct
taxation
to
the
Province,
it
must
surely
have
intended
that
the
taxation
of
property
and
income
should
belong
exclusively
to
the
provincial
legislatures,
and
that
without
regard
to
any
theory
as
to
the
ultimate
incidence
of
such
taxation.
To
hold
otherwise
would
be
to
suppose
that
the
framers
of
the
Act
intended
to
impose
on
a
provincial
legislature
the
task
of
speculating
as
to
the
probable
ultimate
incidence
of
each
particular
tax
it
might
desire
to
impose,
at
the
risk
of
having
such
tax
held
invalid
if
the
conclusion
reached
should
afterwards
be
held
to
be
wrong.
"What
then
is
the
effect
to
be
given
to
Mill’s
formula
above
quoted?
No'
doubt
it
is
valuable
as
providing
a
logical
basis
for
the
distinction
already
established
between
direct
and
indirect
taxes,
and
perhaps
also
as
a
guide
for
determining
as
to
any
new
or
unfamiliar
tax
which
may
be
imposed
in
which
of
the
two
categories
it
is
to
be
placed;
but
it
cannot
have
the
effect
of
disturbing
the
established
classification
of
the
old
and
well
known
species
of
taxation,
and
making
it
necessary
to
apply
a
new
test
to
every
particular
member
of
those
species.
The
imposition
of
taxes
on
property
and
income,
of
death
duties
and
of
municipal
and
local
rates
is,
according
to
the
common
understanding
of
the
term,
direct
taxation,
just
as
the
exaction
of
a
customs
or
excise
duty
on
commodities
or
of
a
percentage
duty
on
services
would
ordinarily
be
regarded
as
indicert.
taxation;
and
although
new
forms
of
taxation
may
from
time
to
time
be
added
to
one
category
or
the
other
in
accordance
with
Mill’s
formula,
it
would
be
wrong
to
use
that
formula
as
a
ground
for
transferring
a
tax
universally
recognized
as
belonging
to
one
class
to
a
different
class
of
taxation.’’
In
this
passage
Lord
Cave
is
dealing
with
the
argument
that
the
probability
of
the
tax
being
passed
on
by
arrangement
rendered
the
tax
an
indirect
one,
and
his
rejection
of
that
argument
is
in
conformity
with
the
previous
decisions
of
the
Board.
As
has
already
been
pointed
out
the
ultimate
incidence
of
the
tax,
in
the
sense
of
the
political
economist,
is
to
be
dis-
regarded,
but
where
the
tax
is
imposed
in
respect
of
a
transaction,
the
taxing
authority
is
indifferent
as
to
which
of
the
parties
to
the
transaction
ultimately
bears
the
burden,
and,
as
Mill
expresses
it,
it
is
not
intended
as
a
peculiar
contribution
upon
the
particular
party
selected
to
pay
the
tax.
Similarly,
where
the
tax
is
imposed
in
respect
of
some
dealing
with
commodities,
such
as
their
import
or
sale,
or
production
for
sale,
the
tax
is
not
a
peculiar
contribution
upon
that
one
of
the
parties
to
the
trading
in
the
particular
commodity
who
is
selected
as
the
taxpayer.
This
is
brought
out
in
the
second
paragraph
of
Mill’s
definition,
and
is
true
of
the
typical
custom
and
excise
duties
referred
to
by
Lord
Cave.
Again,
taxes
on
property
and
income
are
imposed
in
respect
of
the
particular
taxpayer’s
interest
in
property
or
the
taxpayer’s
own
income,
and
they
are
a
peculiar
contribution
upon
him,
and
it
is
intended
and
desired
that
he
shall
pay
it,
though
it
is
possible
for
him,
by
making
his
own
arrangements
to
that
end,
to
pass
the
burden
on
in
the
sense
of
the
political
economists.
The
decision
in
Fairbanks
9
case
is
in
accordance
with
the
principles
already
stated
by
their
Lordships
as
those
to
be
derived
from
the
earlier
decisions
of
the
Board.
In
the
Macdonald
Murphy
Lbr.
Co.
f
s
case
a
provincial
tax
upon
all
timber
cut
in
the
Province,
with
a
rebate
of
nearly
the
whole
tax
in
the
case
of
timber
used
or
manufactured
in
the
Province
was
held
to
be
in
its
nature
an
export
tax
"‘levied
on
a
commercial
commodity
on
the
occasion
of
its
exportation
in
pursuance
of
trading
transactions’’.
The
tax
was
held
to
be
ultra
vires
of
the
Provincial
Legislature
for
the
reasons
stated
in
the
following
passages
of
the
judgment
of
the
Board,
which
was
delivered
by
Lord
Macmillan
([1930]
2
D.L.R.,
at
pp.
124-5)
:
“The
appellant
admitted
that
the
imposition
of
customs
and
excise
duties
is
a
matter
within
the
exclusive
competence
of
the
Dominion
Parliament,
as,
indeed,
plainly
appears
from
sec.
122
of
the
B.N.A.
Act.
The
reason
for
this
is,
no
doubt,
that
the
effect
of
such
duties
is
not
confined
to
the
place
where,
and
the
persons
upon
whom,
they
are
levied,
which
is
perhaps
just
another
way
of
saying
that
they
are
indirect
taxes.
If
then
an
export
tax
falls
within
the
category
of
duties
of
customs
and
excise
there
is
an
end
of
the
question.
Their
Lordships
are
of
opinion
that
according
to
the
accepted
terminology
and
practice
of
fiscal
legislation
and
administration
export
duties
are
ordinarily
classed
as
duties
of
customs
and
excise.
.
.
.
‘“Mr.
Lawrence,
however,
contended
that
although
the
tax
might
accurately
be
described
as
an
export
duty,
this
did
not
necessarily
negative
its
being
a
direct
tax
within
the
meaning
of
the
Act.
Without
reviewing
afresh
the
niceties
of
discrimination
between
direct
and
indirect
taxation
it
is
enough
to
point
out
that
an
export
tax
is
normally
collected
on
merchantable
goods
in
course
of
transit
in
pursuance
of
commercial
transactions.
Whether
the
tax
is
ultimately
borne
by
the
exporting
seller
at
home
or
by
the
importing
buyer
abroad
depends
on
the
terms
of
the
contract
between
them.
.
.
.
While
it
is
no
doubt
true
that
a
tax
levied
on
personal
property,
no
less
than
a
tax
levied
on
real
property,
may
be
a
direct
tax
where
the
taxpayer’s
personal
property
is
selected
as
the
criterion
of
his
ability
to
pay,
a
tax
which,
like
the
tax
here
in
question,
is
levied
on
a
commercial
commodity
on
the
occasion
of
its
exportation
in
pursuance
of
trading
transactions,
cannot
be
described
as
a
tax
whose
incidence
is,
by
its
nature,
such
that
normally
it
is
finally
borne
by
the
first
payer,
and
is
not
susceptible
of
being
passed
on.
On
the
contrary,
the
existence
of
an
export
tax
is
invariably
an
element
in
the
fixing
of
prices,
and
the
question
whether
it
is
to
be
borne
by
seller
or
purchaser
in
whole
or
in
part
is
determined
by
the
bargain
made.
The
present
tax
thus
exhibits
the
leading
characteristics
of
an
indirect
tax
is
defined
by
authoritative
decisions.
’’
It
is
clear
that
this
decision
applied
Mill’s
definition,
as
adopted
by
the
previous
decisions
of
the
Board,
as
the
test,
and
that
the
result
was
in
accordance
with
those
decisions.
The
present
respondent
relied
on
the
reference
to
sec.
122
of
the
Act
of
1867
as
being
of
assistance
to
his
argument.
In
their
Lordships’
opinion
the
customs
or
excise
duties
on
commodities
ordinarily
regarded
as
indirect
taxation,
referred
to
in
the
judgments
of
the
Fairbanks
case
and
the
Macdonald
Murphy
Lbr.
Co.
case,
are
duties
which
are
imposed
in
respect
of
commercial
dealings
in
commodities,
and
they
would
necessarily
fall
within
Mill’s
definition
of
indirect
taxes.
They
do
not
extend,
for
instance,
to
a
dog
tax,
which
is
clearly
direct
taxation,
though
the
machinery
of
the
excise
law
might
be
applied
to
its
collection,
or
to
a
licence
duty,
such
as
was
considered
in
Lambe
}
s
ease.
Customs
and
excise
duties
are,
in
their
essence,
trading
taxes,
and
may
be
said
to
be
more
concerned
with
the
commodity
in
respect
of
which
the
taxation
is
imposed
than
with
the
particular
person
from
whom
the
tax
is
exacted.
Sec.
122
of
the
Act
merely
provided
for
the
temporary
continuation
of
the
then
existing
legislation
as
regards
customs
and
excise,
and
the
respondent
was
unable
to
point
to
anything
in
that
legislation
which
would
fall
outside
the
above
definition
of
customs
and
excise
duties.
It
follows
that
the
tax
here
in
question
must
be
tested
by
Mill’s
definition,
as
adopted
by
the
decisions
of
the
Board.
Turning
then
to
the
provisions
of
the
Fuel-oil
Tax
Act
here
in
question,
it
is
clear
that
the
Act
purports
to
exact
the
tax
from
a
person
who
has
consumed
fuel-oil,
the
amount
of
the
tax
being
computed
broadly
according
to
the
amount
consumed.
The
Act
does
not
relate
to
any
commercial
transaction
in
the
commodity
between
the
taxpayer
and
someone
else.
Their
Lordships
are
unable
to
find,
on
examination
of
the
Act,
any
justification
for
the
suggestion
that
the
tax
is
truly
imposed
in
respect
of
the
transaction
by
which
the
taxpayer
acquires
the
property
in
the
fuel-oil
nor
in
respect
of
any
contract
or
arrangement
under
which
the
oil
is
consumed,
though
it
is
of
course,
possible
that
individual
taxpayers
may
recoup
themselves
by
such
a
contract
or
arrangement;
but
this
cannot
affect
the
nature
of
the
tax.
Accordingly
their
Lordships
are
of
opinion
that
the
tax
is
"‘Direct
Taxation’’
within
the
meaning
of
see.
92(2)
of
the
B.N.A.
Act.
The
last
contention
of
the
respondent
was
that
the
Fuel-oil
Tax
Act
invaded
the
province
of
the
Dominion
Parliament,
in
that
it
regulated
trade
and
commerce.
Except
that
the
Act
taxes
persons
in
respect
of
a
commercial
commodity,
which
is
not
produced
in
its
raw
state
within
the
Province,
there
is
nothing
in
the
Act
to
suggest
that
its
purpose
was
the
regulation
of
trade
and
commerce,
and
the
respondent
has
to
rely
on
extrinsic
circumstances
such
as
the
competition
of
coal
in
the
fuel
market.
But,
if
the
taxation
falls
within
the
terms
of
sec.
92(2),
that
is,
if
it
is
"‘Direct
Taxation
within
the
Province
in
order
to
the
raising
of
a
Revenue
for
Provincial
Purposes’’,
and
it
does
not
purport
to
regulate
"Trade
and
Commerce’’,
there
is
no
reason
to
limit
the
legislative
power
expressly
conferred
on
the
Province.
"‘If
they
find
that
on
the
due
construction
of
the
Act
a
legislative
power
falls
within
sec.
92,
it
would
be
quite
wrong
of
them
to
deny
its
existence
because
by
some
possibility
it
may
be
abused,
or
may
limit
the
range
which
otherwise
would
be
open
to
the
Dominion
parliament’’:
Bk.
of
Toronto
v.
Lambe,
12
App.
Cas.,
at
p.
587.
The
case
of
Lawson
v.
Interior
Fruit
c
Vegetable
Committee
[1931]
2
D.L.R.
193,
affords
an
interesting
contrast,
for
there,
on
the
face
of
the
statute,
the
Provincial
Legislature
sought
to
regulate
the
import
of
commodities.
Their
Lordships
are
therefore
of
opinion
that
the
appeal
should
be
allowed,
that
the
judgments
appealed
from
should
be
set
aside,
and
that
the
appellant
is
entitled
to
decree
for
the
amount
in
suit,
and
their
Lordsihps
will
humbly
advise
His
Majesty
accordingly.
The
appellant
will
have
the
costs
of
this
appeal
and
his
costs
in
the
Courts
below.
Appeal
allowed.
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