M.
le
juge
FRANCOEUR.
La
Loi
de
l’impôt
sur
le
tabac
adoptée
par
la
Legislature
de
la
Province
de
Québec
fut
sanctionnée
le
22
Juin
1940,
et
est
devenue
en
vigueur
le
premier
juillet
suivant
((1940)
4
Geo.
VI,
ch.
15).
L’appelant
aurait
violé
cette
loi.
Une
plainte
a
été
portée
contre
lui
par
le
procureur
général
de
la
Province
de
Québec,
l’accusant,
étant
un
consommateur,
d’avoir
le
18
juillet
1940
acheté
du
tabac
dans
un
magasin
situé
au
No
381,
rue
Ste-
Catherine
ouest,
Montréal,
sans
payer
la
taxe
due.
L’appelant
a
comparu
devant
un
Juge
de
la
Cour
des
sessions
de
la
paix
et
a
plaidé
«
non
coupable
»
à
1
’accusation
portée
contre
lui.
Il
a
immédiatement,
par
ses
procureurs,
décliné
la
juridiction
de
cette
Cour
et
du
juge
en
alléguant
que
le
statut
en
vertu
duquel
la
plainte
est
faite
est
ultra
vires
des
pouvoirs
de
la
Législature
de
Québec,
pour
les
raisons
formulées
comme
suit
dans
son
mémoire
:
a)
It
did
not
constitute
direct
taxation
in
the
province;
b)
It
set
up
a
licensing
system
which
was
not
"‘in
order
to
the
raising
of
revenue’’
by
the
licenses
;
c)
It
provided
that
the
vendor
should
collect
the
tax;
d)
It
was
not
a
direct
tax
but
was
a
sales
tax
and
one
relating
to
a
marketable
commodity
and
upon
a
commercial
transaction
between
the
taxpayer
and
the
other
party
to
the
transaction
;
e)
It
constituted
a
regulation
of
trade
and
commerce
under
s.
91,
ss.
2,
of
the
British
North
America
Act;
f)
Its
subject-matter
was
not
of
a
merely
local
and
private
nature
in
the
Province;
g)
By
taxing
imports,
it
violated
sections
121
and
122
of
the
British
North
America
Act
;
Malgré
ces
objections,
le
procureur
général
insista
pour
procéder
au
mérite
et
la
cause
fut
fixée
pour
enquête
et
audition
le
2
août
1940.
L’appelant
présenta
alors
une
requête
à
un
juge
de
la
Cour
supérieure,
demandant
l’émanation
d’un
bref
de
prohibition.
Les
allégations
de
cette
requête
développent
et
précisent
les
objections
faites
lors
de
la
comparution
de
l’appelant:
7.
That
the
charge
as
laid
against
your
petitioner
is
not
and
does
not
constitute
any
offence
in
law,
the
whole
for
the
following
reasons
:
a)
That
the
statute
4
Geo.
VI,
ch.
15
described
as
the
Tobacco
Tax
Act
is
illegal,
null
and
void
inasmuch
as
it
does
not
legislate
upon
matters
provided
for
by
sec.
92
of
the
British
North
America
Act
but
in
fact
legislates
upon
matters
within
the
legislative
authority
of
the
Dominion
of
Canada
in
virtue
of
sec.
91
of
the
British
North
America
Act.
b)
That,
particularly,
the
Act
in
question
does
not
constitute
direct
taxation
within
the
Province
in
order
to
the
raising
of
revenue
for
provincial
purposes
under
s.
92,
ss.
2
of
the
British
North
America
Act.
c)
That
the
licenses
provided
for
in
the
statute
in
question
are
not
within
the
category
of
shop,
saloon,
tavern,
auctioneer
or
other
licenses
in
order
to
the
raising
of
revenue
for
provincial,
local
or
municipal
purposes.
d)
That
the
statute
is
illegal
and
ultra
vires
in
providing
that
the
vendor
is
to
collect
and
remit
the
tax.
e)
That
the
tax
is
illegal
and
ultra
vires
of
the
Province
of
Quebee
inasmuch
as
it
is
not
a
direct
tax
upon
the
consumer
but
is
a
sales
tax
and
a
tax
relating
to
a
marketable
commodity
and
upon
a
commercial
transaction
between
the
taxpayer
and
the
other
party
to
the
transaction.
f)
That
the
tax
is
illegal
and
ultra
vires
of
the
Province
of
Quebec
as
constituting
the
regulation
of
trade
and
commerce
under
s.
91,
ss.
2
of
the
British
North
America
Act.
g)
That
the
subject-matter
of
the
Act
is
not
a
matter
of
merely
local
or
private
nature
in
the
Province
of
Quebec.
h)
That
in
providing
for
a
tax
upon
any
tobacco
brought
into
the
Province
or
caused
to
be
brought
into
the
Province
of
Quebec,
the
tax
is
illegal
and
ultra
vires
of
the
Province
of
Quebec
and
particularly
violates
Section
121
of
the
British
North
America
Act
providing
that
"‘all
articles
of
the
growth,
produce
or
manufacture
of
any
one
of
the
Provinces
shall,
from
and
after
the
Union,
be
admitted
free
into
each
of
the
other
Provinces.
8.
That,
in
consequence
of
the
foregoing
it
appears
that
the
complaint
and
charge
against
your
petitioner
and
the
trial
of
the
said
charge
constitutes
an
excess
of
jurisdiction
on
the
part
of
the
Courts
of
inferior
jurisdiction,
the
respondents
in
the
present
case.
9.
That
the
matter
involved
in
the
said
charge
is
one
of
great
importance
to
the
public
in
general
and
your
petitionerin
particular
as
it
represents
a
serious
and
unjust
interference
with
his
liberties
and
rights
and
with
those
of
others.
in
the
Province
similarly
situated.
Après
avoir
entendu
le
requérant
et
le
procureur
général,
le
juge
de
la
Cour
supérieure
a,
le
29
août
1940,
refusé
d’émaner
le
bref,
et,
statuant
en
même
temps
sur
le
fond,
décrète
que
l’acte
attaqué
est
légal,
constitutionnel,
intra
vires
des
pouvoirs
de
la
Législature.
Les
allégations
de
la
requête
justifient-elles
l’émanation
du
bref
de
prohibition?
Les
moyens
invoqués
au
sujet
de
l’excès
de
juridiction
sont-ils
prima
fade
suffisamment
sérieux
pour
accueillir
cette
procedure?
Le
litige
présente
une
question
de
droit
très
importante:
l’illégalité
et
l’inconstitutionnalité
d’une
loi
qui
oblige
les
contribuables
de
toute
la
province
à
payer
une
certaine
taxe.
Le
juge
de
la
Cour
supérieure
considère
que
la
Cour
des
sessions
de
la
paix
a
juridiction.
Les
parties
devraient
done
être
renvoyées
devant
ce
Tribunal
qui
aurait
exercé
sa
compétence.
Il
est
admis
que
le
bref
de
prohibition
est
un
remède
extraordinaire
auquel
on
ne
doit
recourir
qu’avec
grande
circonspection.
Avec
beaucoup
de
déférence
pour
la
Cour
supérieure,
je
ne
peux
pas
accepter
comme
juridiques
tous
les
motifs
formulés
contre
l’émanation
de
ce
bref.
Appelé
à
décider
si
la
loi
est
constitutionnelle
ou
non,
le
tribunal,
en
se
conformant
à
la
procédure,
n’a
pas
à
se
préoccuper
des
ennuis
ou
inconvénients
dont
le
fisc
pourrait
souffrir.
Tout
en
s’opposant
aux
raisons
invoquées
en
faveur
de
l’émanation
du
bref,
celui-ci
est
implicitement
accordé,
puisqu’on
a
disposé
aussitôt
du
mérite
de
la
cause.
Cependant,
il
ne
me
paraît
pas
justifiable,
sauf
dans
des
cas
très
exceptionnels,
de
déroger
à
la
jurisprudence
établie
par
les
décisions
suivantes
de
cette
cour.
Sung
Lung
v.
Cité
de
Québec
(1921)
31
B.
R.
212;
Asch
Ltd.
v.
Recorder’s
Court
of
the
City
of
Lachine
(1932)
52
B.
KR.
363;
Procureur
général
de
Québec
v.
Lazarovitch
(1940)
69
B.
KR.
214.
Le
requérant
a
obtenu,
toutefois,
la
conclusion
principale
de
sa
requête
obligeant
les
intimés
to
appear
before
this
Honourable
Court
to
answer
to
the
demand
contained
in
the
present
Petition
and
particularly
that
the
said
Tobacco
Tax
Act
4
Geo.
VI,
ch.
15
is
illegal
and
ultra
vires
of
the
Province
of
Quebee
and
unconstitutional,
null
and
void.
La
Cour
s’est
prononcée
sur
ce
point.
L’unique
question
qui
se
pose
est
celle-ci:
la
taxe
prélevée
en
vertu
de
cet
acte
(4
Geo.
VI,
ch.
15)
est-elle
indirecte
ou
directe
?
L'appelant
soutient
que
c’est
une
taxe
indirecte;
le
procureur
général
intimé
maintient
que
c’est
une
taxe
directe.
La
Cour
a
donné
raison
à
celui-ci.
Elle
donne
une
interprétation
juste
de
cette
loi,
en
tenant
compte
de
la
règle
générale
sur
laquelle
le
législateur
s’est
appuyé.
Cette
règle,
c’est
de
faire
payer
la
taxe
par
le
consommateur,
c’est-à-dire
par
celui
qui
achète
pour
consommer
et
non
pas
pour
revendre
dans
le
but
de
se
rembourser.
Voilà
la
tendance
générale
de
la
loi,
l’intention
qui
apparaît
nettement
au
texte
d’exiger
l’impôt
du
consommateur
au
moment
de
l’achat
(art.
8).
C’est
Jui
qu’on
a
voulu
atteindre.
Ce
n’est
done
pas
une
taxe
sur
la
vente,
mais
sur
l’achat.
C’est
normalement
la
taxe
directe
perçue
du
consommateur
qui
achète
mais
ne
revend
pas.
Il
ne
peut
pas
transférer
cette
taxe
à
un
autre.
Il
faut
écarter
les
cas
spéciaux
ou
exceptionnels,
les
arrangements
particuliers
en
vue
d’une
revente
éventuelle.
Nos
tribunaux
ont
souvent
été
appelés
à
se
prononcer
sur
l’étendue
des
pouvoirs
des
Législatures
provinciales
en
matière
de
taxation.
Plusieurs
causes
importantes
ont
été
jugées
par
le
Conseil
privé.
Il
me
paraît
inutile
de
répéter
les
propositions
qui
ont
été
longuement
discutées.
Les
parties,
au
soutien
de
leurs
prétentions
respectives,
ont
cite
de
nombreux
arrêts,
tant
de
nos
cours
que
du
Conseil
privé.
Après
les
avoir
examinés,
il
faut
je
crois,
en
arriver
à
la
conclusion
que
celui
qui
s’applique
au
présent
litige
est:
Attorney
General
for
British
Columbia
v.
King
come
Navigation
Co.
Ltd.
(Plaxton
Canadian
Constitutional
Decisions
of
The
Privy
Coun-
cil
(1930-39),
p.
228,
(1984)
A.C.
45).
Dans
cette
cause,
le
Conseil
privé
a
interprété
une
loi
presqu
’identique
à
celle
soumise
à
notre
considération.
Lord
Thankerton
analyse
plusieurs
jugements
dans
lesquels
on
retrouve
la
définition
de
la
taxe
directe
et
la
taxe
indirecte.
Le
débat
porte
principalement,
comme
dans
la
cause
actuelle,
sur
la
question
de
savoir
si
la
taxe
fixée
est
directe
et
relève
exclusivement
de
la
juridiction
de
la
Législature
provinciale,
en
vertu
de
l’art.
92
de
l’Acte
de
4’Amérique
Britannique
du
Nord,
ou
est
indirecte,
du
ressort
du
Parlement
fédéral,
art.
91
du
même
acte.
Notons
que
l’intimé
Kingcome
Navigation
Co.
Ltd.
soulevait,
en
substance,
pour
faire
déclarer
la
loi
de
la
Colombie
Britannique
inconstitutionnelle
les
moyens
invoqués
par
l’appelant
Parsons.
Référant
à
la
cause
Bank
of
Toronto
v.
Lambe
(1887),
12
A.C.
575,
lord
Thankerton
cite
une
partie
des
remarques
faites
par
lord
Hobhouse.
Celui-ci
cite
la
définition
de
la
taxe
directe
et
indirecte
donnée
par
John
Stuart
Mill.
C'est
la
suivante
(p.
582)
:
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
as
the
excise
or
customs.
Lord
Hobhouse
ajoute
(p.
582)
:
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.
Après
avoir
étudié
d’autres
arrêts
rendus
par
le
même
tribunal,
lord
Thankerton
conclut
(p.
99):
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
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
1s,
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
s.
92,
head
2,
of
the
British
North
America
Act.
The
last
contention
of
the
respondents
was
that
the
Fuel-oil
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
s.
92,
head
2,
that
is,
if
it
is
direct
taxation
within
the
Province
in
order
to
raise
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.
Comme
on
le
voit,
le
Conseil
privé
adopte
comme
finale
la
définition
de
la
taxe
directe
et
indirecte
donnée
par
Mill.
Elle
a
toujours
été
admise
depuis.
Elle
est
devenue
le
critérium
d’appréciation.
Il
faut
donc
accepter
cette
décision.
Elle
résume
et
clôt
le
débat.
Elle
donne
une
réponse
péremptoire
à
toutes
les
objections
soulevées
par
l’appelant.
Les
motifs
très
élaborés
du
jugement
a
quo
basé
sur
la
décision
susmentionnée
en
disposent.
Ce
jugement
est
done
bien
fondé.
Je
rejetterais
l’appel
avec
dépens.
M.
le
juge
LETOURNEAU
:—Depuis
que
cet
appel
nous
a
été
soumis,
Me
Chipman,
l’avocat
de
l’appelant,
nous
a
très
loyalement
fait
tenir
copie
de
ce
qu’ont
récemment
dit
deux
juges
de
la
Cour
suprême
du
Nouveau-Brunswick,
division
des
appels,
au
sujet
d’un
cas
analogue.
Atlantic
Smoke
Shops
Ltd.
v.
A.G.
for
N.B.,
[1941]
C.T.C.
Vu
cette
opinion
et
les
raisons
que
donnent
respectivement
dans
leurs
notes
mes
collègues
les
juges
Hall
et
Francoeur,
Je
confirmerais
le
jugement
a
quo,
sans
toutefois
en
retenir
tous
les
considérants,
encore
que
l’élément
«inconvénients
»
devait
avoir
sa
valeur
pour
que
fût
décidée
sur-le-champ,
soit
aussi
bien
avant
qu’après
l’émission
du
bref
de
prohibition,
la
question
de
droit,
celle
d’une
inconstitutionnalité
de
la
loi
invoquée,
qui
servait
de
base
à
la
plainte.
J’ajouterais,
bien
que
ceci
soit
étranger
à
cette
plainte
dont
l’appelant
est
l’objet,
que
pas
plus
que
les
autres,
l’art.
9
de
la
loi
ne
me
paraît
ultra
vires,
car
en
le
lisant
attentivement,
on
se
rend
compte
que
la
disposition
ne
vise
pas
le
cas
de
douane
ou
accise
que
généralement
implique
une
importation,
mais
tout
au
plus
d’atteindre
là
aussi
le
«consommateur
»
en
l’assujettissant
à
un
contrôle
équivalant
à
celui
du
<<
vendeur
en
détail
>>
qui,
pour
ce
cas,
ferait
défaut.
Je
rejetterais
l’appel.
Mr.
Justice
Hall:—By
the
"Tobacco
Tax
Act’’
(4
Geo.
VI,
ch.
15),
the
Province
of
Quebec
imposed
a
tax
upon
consumers
of
tobacco
in
the
following
words
:
8.
In
order
to
provide
for
the
exigencies
of
the
publie
service
of
the
Province,
every
consumer
shall
pay
to
His
Majesty
in
the
rights
of
the
Province,
at
the
time
of
making
a
purchase
of
tobacco
in
this
Province,
for
consumption
by
himself
or
by
any
other
person,
a
tax
in
respect
of
the
consumption
of
such
tobacco
at
the
rate
of
ten
per
centum
of
the
retail
price.
The
appellant,
having
refused
to
pay
the
tax
in
question,
was
charged
before
the
Court
of
Sessions
of
the
Peace,
and
when
the
complaint
was
due
to
be
heard,
he
presented
to
the
Superior
Court
a
petition
for
the
issue
of
a
writ
of
prohibition,
ordering
the
Judges
of
Sessions
of
the
Peace
to
appear
before
the
Superior
Court
to
answer
the
demand
that
the
said
Tobacco
Tax
Act
be
declared
illegal
ultra
vires
of
the
Provincial
Legislature
because
it
does
not
constitute
ceedings
in
the
matter
with
reference
to
the
complaint
and
charge.
The
material
allegations
of
the
petition
are
that
the
Act
is
ultra
vires
of
the
Provincial
Legislature
because
it
does
not
constitute
direct
taxation;
because
the
licenses
provided
for
in
the
Statute
in
question
are
not
within
the
category
of
licenses
issued
for
the
purpose
of
raising
revenue
for
provincial,
local
or
municipal
purposes
:
because,
upon
the
vendor
is
imposed
the
duty
of
collecting
and
remitting
the
tax;
because
the
said
tax
is
a
sales
‘
tax,
and
a
tax
relating
to
a
marketable
commodity,
and
upon
a
commercial
transaction;
and
further
because
the
subjectmatter
of
the
Act
is
not
a
matter
of
merely
local
or
private
nature
in
the
Province
of
Quebec
because,
by
Section
9,
it
imposes
restrictions
upon
inter-provincial
transactions,
and
thereby
violates
section
121
of
the
British
North
America
Act.
By
a
carefully
reasoned
and
comprehensive
judgment,
the
learned
trial
Judge
declared
that,
since
the
questions
at
issue
were
fully
disclosed
in
the
pleadings
and
in
the
Act
itself,
no
useful
or
essential
requirement
would
be
served
by
issuing
a
writ
of
prohibition,
and
he,
therefore,
concluded
that
the
Act
in
question
was
within
the
competence
of
the
Provincial
Legislature;
that
the
tax
imposed
was
a
direct
tax,
which
could
not
be
passed
on
to
any
other
person,
and
that
the
other
criticisms
were
equally
unfounded
in
law.
He,
accordingly,
refused
to
grant
the
writ
of
prohibition,
and
dismissed
the
appellant’s
petition.
From
that
judgment
the
appellant
now
appeals.
The
fundamental
contention
of
the
appellant
is
that
the
Tobacco
Tax
Act,
under
which
he
is
charged,
is
ultra
vires
of
the
Province,
because
its
provisions
do
not
constitute
direct
taxation
;
because
the
licensing
system
set
up
is
not
one
‘‘in
order
to
the
raising
of
revenue
’
;
because
it
provides
that
the
vendor
should
collect
the
tax;
because
the
tax
is
not
a
direct
tax
but
a
sales’
tax,
and
one
relating
to
a
marketable
commodity
and
upon
a
commercial
transaction
between
the
taxpayer
and
the
vendor.
The
test
upon
which
rests
the
classification
of
a
tax
is
found
in
Mill’s
definition,
which
has
been
uniformly
followed
by
the
judgments
of
the
Privy
Council
since
the
ruling
in
Bank
of
Toronto
v.
Lambe
(1887),
12
A.C.
575.
This
definition
reads
as
follows:
A
direct
tax
is
one
which
is
demanded
from
the
person
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
as
the
excise
or
customs.
Discussing
this
definition,
Lord
Haldane
said
(Att.
Gen.
for
B.C.
v.
C.P.R.
(1927),
A.C.
934,
938)
:
The
definition
given
by
John
Stuart
Mill
was
accordingly
taken
as
a
fair
basis
for
testing
the
character
of
the
tax
in
question,
not
as
a
legal
definition,
but
as
embodying
with
sufficient
accuracy
an
understanding
of
the
most
obvious
indicia
of
direct
and
indirect
taxation,
such
as
might
be
presumed
to
have
been
in
the
minds
of
those
who
passed
the
Act
of
1867.
In
that
case
it
is
true,
the
tax
in
question
was
held
to
be
an
indirect
tax
because
"‘from
the
terms
of
the
Act
there
appears
an
expectation
and
intention
that
the
person
required
to
pay
the
tax
will
indemnify
himself
upon
a
resale
of
the
commodity
taxed.
‘
‘
In
the
more
recent
case,
Attorney
General
for
B.C.
v.
King
come
Navigation
Co.
Ltd.
(1934),
A.C.
45,
it
was
however,
held
that:
The
fuel-oil
tax,
1930,
of
British
Columbia,
which
imposes
a
tax
upon
every
consumer
of
fuel-oil
according
to
the
quantity
which
he
has
consumed,
is
valid
under
s.
92,
head
2,
of
the
British
North
America
Act,
1867;
the
tax
is
direct
taxation,
because
it
is
demanded
from
the
very
persons
who
it
is
intended
or
desired
should
pay
it.
As
the
tax
does
not
relate
to
any
commercial
dealing
with
the
commodity,
it
does
not
fall
within
the
category
of
customs
and
excise
duties,
which
are
within
the
legislative
powers
of
the
Dominion,
both
because
they
are
by
nature
indirect
taxes
and
having
regard
to
s.
122
of
the
Act.
The
Act
being
within
the
legislative
power
given
by
s.
92,
head
2,
and
not
purporting
to
regulate
trade
and
commerce,
is
not
invalid
as
infringing
the
Dominion
authority
under
s.
91,
head
2,
to
legislate
for
that
purpose.
Lord
Thankerton
discussing
this
question,
says
at
p.
52
:
The
question
whether
it
is
a
direct
or
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
payment;
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
(B.N.A.
Act).
It
is
clear
that
the
‘‘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.
Applying
these
rules
of
interpretation
to
the
provisions
of
the
Tobacco
Tax
Act,
it
appears
to
me
to
be
obvious
that
the
tax
is
a
direct
tax
imposed
upon
the
consumer,
who
can
have
neither
the
expectation
nor
the
intention
to
indemnify
himself
at
the
expense
of
another.
It
is
to
be
noted
that
the
tax
is
to
be
paid
by
the
consumer
at
the
time
of
making
a
purchase
on
a
retail
sale,
and
such
a
purchaser
is
precluded
from
making
a
subsequent
sale,
both
by
the
terms
of
the
Act,
section
3
of
which
declared
that
no
person
may
sell
tobacco
in
the
Province
unless
he
has
received
a
license
therefor,
and
also
by
the
virtual
impossibility
of
making
a
remunerative
sale
after
he
himself
has
paid
a
special
tax
of
10%
on
the
original
retail
price.
Counsel
for
the
appellant
have
emphasised
the
contention
that,
since
the
Act
applies
to
one
who
purchases
for
the
consumption
"‘by
any
other
person,’’
it
implies
that
such
other
person
would
indemnify
the
purchaser
for
the
tax.
I
am
unable
to
discover
any
valid
basis
for
this
argument,
for
the
insertion
of
the
words
"‘by
any
other
person,’’
in
my
opinion
clearly
points
to
a
gratuitous
transfer
of
the
consumption
by
the
purchaser
to
another.
If,
on
the
other
hand,
the
purchaser,
in
making
the
purchase,
was
acting
for
another,
he
would
in
effect
be
the
agent
of
the
other,
and
the
real
purchaser
would
be
the
principal,
to
whom
would
apply
the
maxim
6(
qui
facit
per
alium
se
facere
videtur.’’
I
have
no
hesitation,
therefore,
in
expressing
the
opinion
that
the
tax
is
a
direct
tax
and,
therefore,
intra
vires
of
the
Provincial
Legislature.
Insofar
as
the
question
of
a
license
is
concerned,
I
conclude
that
the
pith
and
substance
of
this
Act
is
to
regulate
the
tobacco
business
within
the
Province,
and
the
purpose
of
the
license
is
to
provide
the
necessary
machinery
for
that
regulation.
In
Shannon
v.
Lower
Mainland
Dairy
Products
(1938),
A.C.
708,
it
was
held:
Further,
the
regulation
of
trade
within
the
Province
being
valid,
the
method
of
regulation
by
a
system
of
licenses
is
also
admissible,
and
it
is
no
objection
that
license
fees
should
be
charged
either
to
defray
the
costs
of
administering
the
local
regulation
or
to
inerease
the
general
funds
of
the
Province,
or
for
both
purposes,
and
the
Act
is
accordingly
intra
vires
of
the
Provincial
Legislature
under
s.
92(9)
of
the
British
North
America
Act,
1867.
The
license
fees
can
also
be
supported
as
validly
imposed,
on
the
ground
that
they
are
fees
for
services
rendered
by
the
Province,
or
by
its
authorized
instrumentalities,
under
the
powers
given
by
s.
92(13)
and
(16)
of
the
Act
of
1867.
Counsel
for
the
appellant
based
a
further
argument
upon
section
9
of
the
Act,
which
refers
to
the
importation
into
the
Province
of
tobacco,
in
which
event
the
importer
must
produce
to
the
Comptroller
of
Customs
his
invoice,
and
pay
the
same
tax
in
respect
of
the
consumption
as
is
provided
for
by
section
8.
I
am
of
the
opinion
that
the
provisions
of
section
9,
are
entirely
irrelevant
to
the
issues
in
the
present
appeal,
which
concern
only
a
retail
purchase
within
the
Province.
The
respective
provisions
have
to
do
with
transactions
of
an
entirely
different
character,
and
are,
therefore,
severable,
so
that,
even
if
it
should
be
held
that
section
9
was
ultra
vires,
the
validity
of
the
tax
imposed
by
sec.
8,
would
not
be
affected.
On
the
question
of
severability,
the
recent
judgment
of
the
Privy
Council,
in
Toronto
Corporation
v.
Att.
Gen.
for
Ontario
(1938),
A.C.
415,
is
instructive:
Held
.
.
.
Assuming
that
the
Ontario
Municipal
Board
Act,
1932,
which
set
up
the
Board,
does
by
some
of
its
sections
purport
to
constitute
the
Board
a
Court
of
Justice
analogous
to
a
Superior,
District
or
County
Court,
it
is
to
that
extent
invalid.
There
is,
however,
nothing
to
suggest
that
the
Board
would
not
have
been
granted
its
administrative
powers
without
the
addition
of
the
alleged
judicial
powers,
and
although,
therefore,
such
parts
of
the
Act
of
1932
as
purport
to
vest
in
the
Board
the
functions
of
a
Court
have
no
effect,
they
are
severable,
and
the
Board
is
validly
constituted
for
the
performance
of
its
administrative
functions.
As
to
the
procedure,
it
is
contended
by
the
appellant
that
the
trial
Judge
should
have
granted
the
writ
of
prohibition,
and
reserved
his
consideration
of
the
constitutional
question
until
the
parties
appeared
before
him
upon
the
merits.
Our
jurisprudence
seems
to
have
adopted
the
rule
that
"
a
writ
of
prohibition
should
not
be
refused
if
the
petitioner
presents
what
appears
to
be
prima
facie
a
serious
ground
of
complaint,
or
attacks
the
jurisdiction
in
question
for
reasons
which
deserve
a
serious
and
attentive
study’’
(Asch
Ltd.
v.
Recorder’s
Court
of
Lachine
(1932),
52
K.B.
363).
The
question
in
that
case
was
whether
the
by-law
of
the
City
of
Lachine
was
ultra
vires
because
it
discriminated
between
one
part
and
another
part
of
the
City’s
territory,
and
interfered,
without
compensation,
with
vested
rights,
and
it
seems
to
me
to
be
obvious
that
the
examination
of
that
plea
called
for
a
much
more
serious
and
attentive
study
than
the
present
claim
that
the
Act
in
question
is
ultra
vires
because
it
imposed
a
tax
which
is
indirect
rather
than
direct.
It
is
evident
from
the
terms
of
the
judgment
and
the
contents
of
the
record,
that
the
constitutional
question
was
fully
argued
before
the
trial
Judge,
and
he
reached
the
conclusion
that
the
Privy
Council
had
clearly
laid
down
the
rules
which
govern
the
application
of
Mill’s
definition
of
a
direct
tax,
and
that
the
application
of
that
jurisprudence
to
the
issues
in
the
present
case
offered
no
peculiar
difficulty.
In
other
words,
that
the
appellant
had
failed
to
make
out
even
a
prima
facie
case
in
support
of
his
contention.
I
am
unable
to
discover
that
the
appellant’s
rights
were
in
any
way
prejudiced
by
the
refusal
of
the
trial
Judge
to
issue
a
writ
of
Prohibition
since,
if
that
had
been
done,
the
constitutional
question
would
have
been
presented
to
him
in
the
same
manner,
and
without
any
further
evidence
at
the
hearing
on
the
merits.
This
Court,
similarly,
is
fully
conversant
with
the
issues
raised,
and
no
useful
purpose
could
possibly
be
served
by
sending
the
record
back
to
the
Superior
Court
for
the
issue
of
a
writ
of
prohibition
and
a
new
argument
on
the
merits.
<All
essential
elements
of
the
controversy
have
been
effectively
presented
both
to
the
Superior
Court
and
to
this
Court.
I
conclude,
therefore,
that
the
appeal
should
be
dismissed,
with
costs.
Mr.
Justice
WALSH
:—It
was
submitted
that
the
law
is
invalid,
because
it
constitutes
indirect
taxation,
and
such
cannot
be
imposed
by
the
province.
In
order
to
provide
.
.
.
(V.
supra
p.
106).
The
Privy
Council
declared
(Att.
General
of
B.C.
v.
King
come
Navigation
Co.,
(1984),
A.C.
45)
.
.
.
the
test
to
be
applied
in
determining
what
is
"‘direct
taxation’’
within
the
meaning
of
Section
92,
head
2,
of
the
Act
of
1867,
is
to
be
found
in
Mill’s
definition
of
direct
and
indirect
taxes.
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.
(Plaxton
p.
223
&
seq.)
In
this
instance
the
tax
is
made
to
fall
on
the
person,
who,
it
is
intended,
should
pay
it.
Such
is
the
general
tendency
of
the
law,
although
there
may
be
exceptional
cases.
The
Act
does
not
relate
to
any
commercial
transaction
in
the
commodity
between
the
taxpayer
and
some
one
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
not
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.
{Ibidem,)
For
consumption
by
himself
or
by
any
other
person.
This
does
not
mean
that
the
tax
will
be
passed
to
the
principal
by
an
agent;
this
cannot
be
considered
a
sale.
In
regard
to
the
writ
of
prohibition,
which
was
denied,
it
might
be
indicated
that
the
appellant
was
afforded
what
he
sought:
study
by
the
Court
of
the
Act
that
imposed
this
tax,
so
Mr.
Justice
Francoeur
remarks.
I
concur
with
him
and
Mr.
Justice
Hall.
The
Act
in
question
is
within
the
competence
of
the
Province.
Since
the
hearing
and
study
of
this
case
by
this
Court,
the
same
issue
was
decided
by
the
Court
of
Appeal
of
New
Brunswick
(Atlantic
Smoke
Shops
Ltd.
v.
A.G.
for
N.B.,
[1941]
C.T.C.)
;
the
tax
was
there
upheld.
The
New
Brunswick
case
is
presently
before
the
Supreme
Court,
I
understand.
I
would
dismiss
the
appeal,
with
costs.
M.
le
juge
St-Jacques:—La
‘our
supérieure
aurait
pu,
sur
la
requête
qui
lui
était
présentée,
ordonner
l’émission
du
bref
de
prohibition.
En
refusant
de
la
faire,
a-t-elle
violé
un
principe
de
droit?
Je
ne
le
crois
pas.
Elle
a
jugé
qu'il
valait
mieux
disposer
immédiatement
des
motifs
invoqués
par
la
requérante,
étant
donné
les
conséquences
graves
que
pourrait
entraîner
l’émission
du
bref.
La
Cour
s’est
done
prononcée
sur
la
véritable
question
de
droit
que
soulève
le
litige,
à
savior:
la
constitutionnalité
de
la
loi
de
l’impôt
sur
le
tabac,
édictée
par
la
législature
de
la
province
de
Québec.
Arrivant
à
la
conclusion
que
les
dispositions
de
cette
loi
sont
du
ressort
de
la
province,
elle
a
rejeté
la
demande
de
bref
de
prohibition.
La
Cour
d’appel
n’a
done
maintenant
qu’à
résoudre
cette
seule
question
de
la
validité
de
la
loi,
et,
quant
à
moi,
la
solution
n'est
pas
dépourvue
de
difficultés.
S'il
fallait
s’en
rapporter
au
sens
naturel
et
ordinaire
des
mots,
que
devrait-on
entendre
par
«une
taxe
directe
»
?
Ne
serait-ce
pas
celle
qui
atteint
directement
les
biens
qui
sont
déjà
dans
le
patrimoine
de
celui
qui
est
appelé
à
la
payer,
comme,
par
exemple,
les
taxes
municipales
et
scolaires,
l’impôt
sur
le
revenu,
les
taxes
sur
les
successions
et
autres
du
même
genre?
Or,
la
taxe
imposée
par
la
loi
attaquée
pèse
sur
le
consommateur
;
pour
consommer
une
chose,
il
faut
la
produire
soi-même,
ou
se
la
procurer
par
voie
d’achat,
c’est-à-dire
par
une
opération
commerciale.
La
loi
ne
vise
pas
le
producteur
de
tabac,
mais
uniquement
le
consommateur
qui
s’en
procure
pour
des
fins
de
consommation.
La
taxe
est
payable
lors
de
l’achat,
c’est-à-dire
au
moment
même
où
le
tabac
entre
dans
le
domaine
de
propriété
du
consommateur.
Il
me
paraîtrait
que
ce
circuit
d’opérations
rende
assez
douteux
le
caractère
de
la
taxe
et
qu’elle
ne
soit
pas
clairement
<<
une
taxe
directe
».
Toutefois,
si
l’on
s’en
rapporte
aux
directives
données
par
le
Conseil
privé,
et
il
faut
le
faire,
ce
n'est
pas
dans
le
sens
commun
des
mots
qu’il
faut
rechercher
la
nature
et
le
caractère
de
la
taxe.
Suivant
la
définition
qu’en
a
donnée
Mill,
et
qui
aurait
inspiré
le
parlement
anglais
lorsque
l’Acte
de
l’Amérique
Britannique
du
Nord
a
été
adopté,
une
taxe
est
directe
lorsque
celui
qui
en
supporte
le
poids
ne
peut
le
faire
passer
sur
les
épaules
d’une
autre
personne.
La
loi
de
l’impôt
sur
le
tabac
a
été
rédigée
de
façon
telle
que
l’acheteur
ne
peut
raisonnablement
pas
trouver
le
moyen
de
se
faire
rembourser
par
un
autre
la
taxe
qu’il
a
payée
à
l’occasion
de
cet
achat.
La
poursuite
instituée
contre
l’appelant
est
fondée
sur
les
dispositions
de
l’art.
8
de
la
loi,
et
appliquant
la
règle
posée
par
le
Conseil
privé,
il
y
avait
lieu
pour
la
Cour
supérieure
de
déclarer
que
le
bref
de
prohibition
demandé
par
l’appelant
n’avait
pas
sa
raison
d’être.
Je
rejetterais
donc
l’appel
avec
dépens.