SMITH,
J.:—This
is
an
appeal
from
the
Minister
of
National
Revenue
with
respect
to
the
standard
profits
of
the
appellant.
It
turns
wholly
upon
the
construction
of
sec.
19A
of
the
Excess
Profits
Act.
The
section
reads
as
follows:
"15A.
Notwithstanding
anything
in
this
Act
contained,
in
any
case
where
a
company
has
a
controlling
interest
in
any
other
company
or
companies
(hereinafter
called
controlled
company
or
companies)
incorporated
in
1940
or
thereafter
.
.
.
and
the
sum
of
the
capital
employed
by
such
company
and
such
controlled
company
or
companies
at
the
time
of
incorporation
is
not
in
the
opinion
of
the
Minister
of
National
Revenue
substantially
greater
than
the
capital
employed
by
such
first-mentioned
company
prior
to
the
incorporation
of
such
controlled
company
or
companies,
the
standard
profits
of
all
such
controlled
companies
taken
together
shall
not
exceed
$5,000.00
in
the
aggregate,
and
shall
be
allocated
to
each
of
such
controlled
companies
in
such
amounts
as
the
Minister
of
National
Revenue
may
direct.
In
any
such
case
a
reference
to
the
Board
of
Referees
shall
not
be
made
notwithstanding
the
provisions
of
section
five
of
this
Act.’’
The
appellant
was
incorporated
on
13
April,
1940.
On
17
September,
1941,
it
applied
to
have
its
standard
profits
determined
under
section
5
of
the
Excess
Profits
Act.
There
was
a
reference
to
the
Board
of
Referees,
the
decision
of
the
Board
awarding
a
standard
profit
of
$28,500.00
per
year
was
approved
by
the
Minister,
and
the
appellant
was
so
notified
on
31st
March,
1942.
Section
15A
of
the
Act
was
assented
to
on
20th
May,
1945,
and
made
applicable
to
the
profits
of
the
1942
taxation
period
and
of
fiscal
periods
ending
therein
and
of
subsequent
periods.
For
the
years
1944
and
1945
the
appellant
was
assessed
excess
profits
tax
based
on
standard
profits
of
$5,000.00
only.
The
appellant
argues
that
it
does
not
fall
within
the
operation
of
see
15A,
supra.
In
my
opinion
there
can
be
no
doubt
that,
from
first
to
last,
this
was
a
controlled
company
in
the
sense
of
this
section
(indeed
the
point
was
not
contested)
;
that
in
the
opinion
of
the
Minister
of
National
Revenue
(and,
I
may
add,
in
my
own
as
well)
the
sum
of
the
capital
of
parent
and
off-spring
was
not
substantially
greater
than
the
capital
of
the
parent
company
at
the
relevant
time;
and
that
its
date
of
incorporation
and
chargeable
accounting
periods
come
within
the
statutory
time.
How,
then,
can
it
be
said
that
the
company
falls
outside
the
wide
net
of
this
section
?
The
main
argument
was
that
having
had
its
standard
profits
fixed
at
$28,500.00
in
1941,
the
section
could
not
now
operate
to
reduce
them
to
$5,000.00;
that
this
would
be
tantamount
to
retrospective
legislation;
and
that
the
section
left
much
room
for
doubt
as
to
whether
this
was
the
intention.
But
the
section
introduced
a
new
standard
profit
for
certain
companies
of
which
this
was
one.
It
contains
no
hint
that
Parliament
intended
that
the
section
should
not
apply
to
companies
within
its
ambit
whose
standard
profits
had
previously
been
fixed
by
some
other
measure.
If
such
had
been
the
intention
nothing
would
have
been
easier
than
to
say
so.
In
the
absence
of
such
language
the
qualification
of
its
terms
by
any
such
implication
is
not
legitimate.
The
provision
may
seem
harsh
to
the
appellant
company,
but
if
the
provision
is
clear
the
Court
has
no
jurisdiction
to
mitigate
such
harshness,
if
any
there
be.
In
my
opinion
this
statutory
provision
interpreted
according
to
income
tax
principles
and
to
the
actual
terms
of
the
language
used
amounts
to
saying:
“‘If
you
are
a
controlled
company
your
standard
profits
shall
not
exceed
$5,000.00
notwithstanding
any
machinery
in
the
Act
which
may
hitherto
have
given
you
a
greater
standard
profit.’’
The
appeal
must
be
dismissed
with
costs.
Appeal
dismissed.
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