HAGGAR CO. V. HELVERING, 308 U. S. 389 (1940)

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U.S. Supreme Court

Haggar Co. v. Helvering, 308 U.S. 389 (1940)

Haggar Co. v. Helvering

No. 176

Argued December 15, 1939

Decided January 2, 1940

308 U.S. 389


1. A literal reading which leads to absurd results will be avoided when the statute can be given a reasonable application consistent with its words and purpose. P. 308 U. S. 394.

2. Sections 215 and 216 of the National Industrial Recovery Act impose on domestic corporations an annual capital stock tax and an annual tax on profits in excess of 12 1/2 percent of the capital stock, both calculated on the basis of the value of the capital stock as declared by the corporation's return for the first year in which the tax is imposed, "which declaration of value cannot be amended." For any subsequent year, the adjusted declared value shall be the original declared value as changed by certain prescribed capital adjustments.


(1) That the purpose is to allow the taxpayer to fix for itself the amount of the taxable base with the proviso that the amount thus fixed for the first taxable year shall be accepted, with only such changes as the statute provides, for the purpose of computing the capital stock and excess profits taxes in the later years. P. 308 U. S. 394.

(2) The phrase "first return" means a return for the first year in which the taxpayer exercises the privilege of fixing its capital stock value for tax purposes. P. 308 U. S. 395.

(3) This includes a timely amended return for that year. P. 308 U. S. 396.

3. A Treasury Regulation which changes an earlier construction of a statute without serving any governmental convenience or purpose

Page 308 U. S. 390

or embodying results of specialized departmental knowledge or experience, and which contradicts the statutory purposes and the plain meaning of its words, will not be followed. P. 308 U. S. 398.

4. An amendment of a statute passed for the purpose of precluding for the future an earlier administrative construction held not an adoption of that construction as the one intended by the original enactment. P. 308 U. S. 398.

5. Semble that retroactive declarations of legislative intent, prejudicial to those who have acted under an earlier statute whose construction seems clear, ought not to be implied more than the legislative intention to give retroactive operation to a new statute. P. 308 U. S. 400.

104 F.2d 24 reversed.

Certiorari, post, p. 533, to review the affirmance of a decision of the Board of Tax Appeals, 38 B.T.A. 141, approving a deficiency assessment of excess profits tax.

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