Computational tax rules can include the Crown where needed to preserve consistent succession-based assessment.

The word "person" in rule 11(2) of the Income Tax Act 1918 was held to include the Crown for a computational provision governing succession to a trade. Although the Crown is not bound by charging provisions unless named expressly or by necessary implication, that immunity did not prevent rule 11(2) from applying because it did not impose tax on the Crown itself. Excluding the Crown would have created an unintended disparity in the basis of assessment when a trade passed to a Crown successor. The balancing charge was therefore correctly brought into the transferor's computation and the appeal failed.

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Issues: Whether the word "person" in rule 11(2) of the Rules of Cases I and II of Schedule D of the Income Tax Act, 1918, includes the Crown so that a successor trade taken over by the Crown falls within the rule for computing the seller's tax liability and basis period.

Analysis: Rule 11(2) is not a charging provision, but a computational provision governing the basis of assessment when a trade changes hands. The Crown's immunity from taxation prevents charging provisions from being construed so as to impose tax on the Crown unless the statute does so expressly or by necessary implication. That limitation does not control rule 11(2), because the rule does not impose tax on the Crown and its operation concerns the computation of tax payable by the transferor. Excluding the Crown from the word "person" in this context would create an unreasonable and unintended disparity in the basis of assessment depending on whether the successor was the Crown or a private person.

Conclusion: The word "person" in rule 11(2) includes the Crown. The balancing charge was properly brought into computation for the year of assessment 1947-48, and the appeal failed.

Final Conclusion: The decision affirms that a computational provision regulating succession to trade can apply to the Crown even though charging provisions do not, where that reading is required by the language and purpose of the rule.

Ratio Decidendi: A non-charging assessment provision may be construed to include the Crown where the provision governs computation of tax liability on succession to a trade and excluding the Crown would frustrate the statutory scheme without imposing tax on the Crown itself.

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