in a way which discriminates against non-franchised dealers.
We recognize that the Act may create some thorny questions regarding the discretion of the manufacturer. Since the manufacturer must first make a refund before it may submit a claim for reimbursement, it must at least preliminarily decide who is entitled to a refund under the Act. However, we believe that in this particular case, plaintiff's problems were of its own making, and we see no reason to pin the blame on General Motors.
We need not decide the difficult issue of whether these cars, allegedly new when sold to Delaware Valley's customers, qualified for excise tax reimbursements under the Act. First, Marvin Yentis and Jerry Friedrich testified at trial as to the "newness" of the cars in question. However, their testimony was in general terms and we find it difficult to believe that they had vivid recollections of the condition of each individual car's indicia of newness. Nor do we have any bases for believing the twenty-seven cars were not, in fact, factory-fresh.
Second, the procedure set up by the Act for making reimbursements is one contemplating knowledge by the manufacturer of the identity of the "ultimate purchaser" and may be inconsistent with a situation where, as here, a car may pass through several dealers' hands before it reaches the actual consumer. Although this may have been mere short-sightedness on the part of the drafters, we will avoid such a determination since it is one unnecessary to our decision.
Very simply, plaintiff took a calculated course of conduct which proved to be wrong. The Act as eventually passed provides that the refunds to ultimate consumers are to be made by the manufacturer. The only role, if any, of the dealer is that of a conduit through whom the refund may be made, if the manufacturer elects to adopt that course,
a course not adopted by General Motors. The Act provides no machinery by which a dealer himself can apply for or make the refund.
Plaintiff has attempted to convince us that it was put at an unfair competitive disadvantage, and was forced to give credits for the excise tax after the President's announcement in order to stay in business. This argument is not persuasive.
First of all, the Act had not yet been passed at that time. Plaintiff could certainly do anything it wanted to after the President's speech on August 16 in order to improve or maintain its competitive position. If it wanted to give tax credits in order to sell cars, fine. But to expect that it would have a legally enforceable right against General Motors for such refunds, when the Act had only been recommended by the President, and did not in fact become law until months later, was not reasonable.
It is immaterial whether other automobile manufacturers were giving refunds after the President's speech.
It is equally immaterial what General Motors dealers were doing, although in fact they were not making refunds at that time.
Unless the Act were to be passed, none of them could recover tax refunds from the United States Treasury.
Second, even if an Act were eventually passed, there was never any certainty that such an Act would apply to cars such as the twenty-seven in question sold by Delaware Valley. If it did not, perhaps plaintiff would be at a competitive disadvantage, but certainly not one for which General Motors would be liable. Thus, the only reasonable behavior for plaintiff, in order to protect itself, would have been to promise its customers that if the Act were passed and they were entitled to a refund under it, they would receive it in accordance with the Act's provisions. Any other approach, such as the one taken, may have allowed plaintiff to sell cars, but it put the burden of the risk of noncompliance with the Act squarely on plaintiff's shoulders. General Motors chose to make refunds directly to the consumer. In fact, it advertised right after the President's speech that this is what it would do. Plaintiff had no reason to make a refund itself and expect this court to order General Motors to reimburse it.
We disregard plaintiff's attempt to challenge the validity of the regulations, for we find that the regulations are irrelevant to actions taken by plaintiff before the passage of the Act. Had plaintiff waited to act until after the passage of the Act, and then failed to comply with the regulations as ultimately published, it would be on better ground to challenge their applicability.
This, of course, does not answer the question of whether plaintiff's customers were entitled to a refund of the excise tax from General Motors under the Act. This is a question we need not decide. Plaintiff's customers are not bringing this lawsuit. Nor have they any reason to, since plaintiff has already gratuitously paid them the amount of the excise tax. If one of plaintiff's customers were here today suing General Motors because he had not received a refund, we would have a different and more difficult case to decide.
The Floor Stock Vehicles
Count II of plaintiff's complaint involves five unsold Cadillacs which plaintiff held in its inventory on December 11, 1971. Under the terms of the Act, any such new vehicles held for sale by the dealer on that date qualified for a refund of the federal excise tax. P.S. 92-178, § 401(b). To claim such a refund, it was not necessary for the manufacturer first to reimburse the dealer.
However, as with the vehicles already sold to ultimate purchasers, only the manufacturer could apply for the refund. After much coaxing by plaintiff, defendant filed a claim for refund on the five vehicles held by Delaware Valley, on October 2, 1972. To date, IRS has taken no action on that claim. Plaintiff argues that this claim was filed late and, therefore, defendant is responsible for plaintiff's not having received a refund from IRS.
The Act provides that a claim was to be filed before the first day of the tenth calendar month beginning after the day after the date of the enactment of the Act. That would have been September 30, 1972, which fell on a Saturday. Plaintiff argues that because the Act said "before" rather than "on or before", the rule allowing for filing on the first business day after the date specified in the statute when the specified date falls on a nonbusiness day is inapplicable.
However, the regulations interpreting the Act provide that "each claim for credit or refund under section 401(b) of the Act shall be filed on or before October 2, 1972." § 142.2-1(d) (1), Temporary Excise Tax Regulations. Plaintiff suggests that this regulation is invalid inasmuch as it contradicts the explicit language of the Act.
We think that the language of the Act is open to interpretation, and that such an interpretation is perfectly consistent with the statutory language. But it is not necessary for us to make that decision. Regardless of whether or not the regulation is consistent with the Act, there is no evidence that IRS failed to act on the claim filed on October 2, 1972 on the basis of untimeliness.
And without such evidence, plaintiff has not sustained its burden of proving that defendant, even assuming a duty, has prejudiced plaintiff. We therefore find for defendant on Count II.
The above constitutes our findings of fact and conclusions of law.