These are actions at law brought-in one instance against the United States and in two against a revenue collector-to recover in each instance money alleged to have been erroneously and illegally exacted as an excise tax-under subdivision 3 of section 900 of the Revenue Acts of 1918 and 1921 and subdivision 3 of section 600 of the Revenue Act of 1924 -from the plaintiff, a corporate manufacturer, on sales by it of articles which the revenue officers regarded as automobile parts or accessories.
In No 171 the Court of Claims awarded the plaintiff $20,017.58 with interest and denied a counterclaim interposed by the United States. In No. 196 the District Court for the District of Connecticut gave the plaintiff judgments on three claims for $329,250.00, $170,470.36, and $98,416.41 with interest on each sum; and the judgments were reversed by the Circuit Court of Appeals. In No. 329 the District Court for the Northern District of Ohio rendered judgments for the plaintiff on five claims for $89,195.36, $249,275.32, $189,853.88, $173,934.45, and $41,764.57 with interest on each sum; and the judgments were affirmed by the Circuit Court of Appeals. The cases are here on certiorari.
After the taxes were collected, timely applications for refund were duly made by the plaintiffs, and the applications were denied. The actions were brought within the time generally limited therefor, but not prior to April 30, 1928.
The applications for refund and the actions proceeded on the theory that the sales were not taxable under the Revenue Acts because the articles sold were not automobile parts or accessories within the meaning of those acts, and not on the theory that the amount collected was in excess of what was properly collectible on taxable sales.
In each case the court's authority to entertain the action and the plaintiff's right to recover were challenged in various ways as precluded by section 424 of the Revenue Act of 1928, which provides:
'Sec. 424. Refund of Automobile Accessories Tax.
'(a) No refund shall be made of any amount paid by or collected from any manufacturer, producer, or importer in respect of the tax imposed by subdivision (3) of section 600 of the Revenue Act of 1924, or subdivision (3) of section 900 of the Revenue Act of 1921 or of the Revenue Act of 1918, unless either-
'(1) Pursuant to a judgment of a court in an action duly begun prior to April 30, 1928; or
'(2) It is established to the satisfaction of the Commissioner that such amount was in excess of the amount properly payable upon the sale or lease of an article subject to tax, or that such amount was not collected, directly or indirectly, from the purchaser or lessee, or that such amount, although collected from the purchaser or lessee, was returned to him; or
'(3) The Commissioner certifies to the proper disbursing officer that such manufacturer, producer, or importer has filed with the Commissioner, under regulations prescribed by the Commissioner with the approval of the Secretary, a bond in such sum and with such sureties as the Commissioner deems necessary, conditioned upon the immediate repayment to the United States of such portion of the amount refunded as is not distributed by such manufacturer, producer, or importer, within six months after the date of the payment of the refund, to the persons who purchased for purposes of consumption (whether from such manufacturer, producer, importer, or from any other person) the articles in respect of which the refund is made, as evidenced by the affidavits (in such form and containing such statements as the Commissioner may prescribe) of such purchasers, and that such bond, in the case of a claim allowed after February 28, 1927, was filed before the allowance of the claim by the Commissioner.'
As respects actions brought on or after April 30, 1928, to recover taxes charged to have been wholly invalid and not merely in excess of what was lawful, which is the situation here, the construction and application of section 424, particularly subdivision (a)(2), are matters about which there has been much contrariety of opinion, as is shown in three lines of decision.
The decisions in the first line regard subdivision (a)(2) as committing all claims for the refunding of taxes of the class in question here to the Commissioner of Internal Revenue for final determination and precluding any examination of such claims in the courts. This view has been taken by District Judges in two cases and by a Circuit Judge in a dissenting opinion in another case.