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ATLAS TRANSP. CO. v. UNITED STATES

September 15, 1958

ATLAS TRANSPORTATION COMPANY
v.
UNITED STATES of America



The opinion of the court was delivered by: EGAN

Plaintiff taxpayer brought this suit against the Government to recover use or excise taxes in the amount of $ 202.50, together with interest, paid by the taxpayer for the fiscal year ending June 30, 1957. At the statutory rate of $ 1.50 per 1,000 pounds of 'taxable gross weight,' there was a tax of $ 40.50 on each of plaintiff's five vehicles. Plaintiff complains that the taxes were erroneously and illegally assessed and collected.

Taxpayer, Atlas Transportation Company, is a Pennsylvania corporation, having its principal office in Philadelphia, Pennsylvania, within the jurisdiction of this Court.

 During the fiscal year ending June 30, 1957, the taxpayer owned and operated five highway motor vehicles, each of which was a two-axle van, equipped for use as a single unit, with an actual unloaded weight of 13,000 pounds or more. Taxpayer used these vehicles in its business of hauling household goods as a common carrier pursuant to a certificate of public convenience and necessity, issued to it by the Interstate Commerce Commission.

 Plaintiff complains that the use tax schedule contained within the Treasury regulations, as applied to plaintiff, is arbitrary and capricious, is contrary to the provisions of Sections 4481 and 4482 of the Internal Revenue Code of 1954, as amended (Code), 26 U.S.C.A. §§ 4481, 4482, and is in violation of the Federal Constitution in that it represents an attempt by the Secretary of the Treasury to impose a tax which the Congress has not authorized. In the alternative, taxpayer complains that if the said use tax schedule is authorized under the Code, such provisions themselves are in violation of the due process clause of the Fifth Amendment to the Federal Constitution in the sense that they create an irrebuttable presumption of fact which is unrelated to and at odds with the true facts and which necessarily imputes to plaintiff repeated violations of the statutes of Pennsylvania and New York.

 The Government, in its answer, denies that the taxes were erroneously and illegally assessed and collected and specifically avers that the Treasury regulations and schedules contained therein were duly promulgated within the proper scope of the statutory discretion given to the Treasury Department by Section 4482; that they represent a reasonable administrative determination reached upon careful and detailed consideration of voluminous evidence submitted in connection with the complicated matters of administration raised by the statute; and that the statutes involved are valid enactments under the Constitution.

 The pleadings raise, for the most part, questions of law. Both sides have filed affidavits and now plaintiff moves for summary judgment.

 We are of the opinion that the regulations in question are valid administrative determinations made within the scope of the statutory discretion given under Section 4482(b) of the Code.

 Taxpayer's argument is based on the theory that the Code provides for a tax on the 'taxable gross weight' which is determined by adding the 'actual unloaded weight of (A) such highway motor vehicle' to the 'weight of the maximum load customarily carried on highway motor vehicles of the same type', while the regulations impose the tax according to the number of axles and unloaded weight of the vehicle.

 The Highway Revenue Act of 1956, now part of the Code, imposed, inter alia, a new tax on the use of public highways by 'any highway motor vehicle which * * * has a taxable gross weight of more than 26,000 pounds at the rate of $ 1.50 a year for each 1,000 pounds of taxable gross weight or fraction thereof.' 26 U.S.C.A. § 4481.

 Section 4482(b) defines 'taxable gross weight' as follows:

 '(b) Taxable gross weight. -- For purposes of this subchapter, the term 'taxable gross weight,' when used with respect to any highway motor vehicle, means the sum of --

 '(1) the actual unloaded weight of --

 '(A) such highway motor vehicle fully equipped for service, and

 '(2) the weight of the maximum load customarily carried on highway motor vehicles of the same type as such ...


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