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BULOVA WATCH CO. v. UNITED STATES

decided: April 17, 1961.

BULOVA WATCH CO., INC
v.
UNITED STATES



CERTIORARI TO THE COURT OF CLAIMS.

Warren, Black, Frankfurter, Douglas, Clark, Harlan, Brennan, Whittaker, Stewart

Author: Whittaker

[ 365 U.S. Page 753]

 MR. JUSTICE WHITTAKER delivered the opinion of the Court.

Petitioner recovered a judgment in the Court of Claims against the United States for an overpayment of its excess profits taxes for the fiscal year ended March 31, 1942, in the amount of $211,899.28, plus interest thereon "as provided by law." 143 Ct. Cl. 342, 163 F.Supp. 633. Of the principal sum of the judgment, $150,016.21 was attributable to an unused excess profits credit carry-back from the succeeding year ended March 31, 1943.

[ 365 U.S. Page 754]

     Acting in accordance with the provisions of § 3771 (e) of the Internal Revenue Code of 1939, the Commissioner computed and allowed statutory interest on the latter sum from June 14, 1945, the date on which petitioner filed its claim for refund, to April 25, 1959 -- 30 days prior to issuance of the refund check -- in the amount of $124,784.72. Thereafter, petitioner moved the Court of Claims for relief from the Commissioner's interpretation of the judgment, contending that interest should be computed, under the provisions of 28 U. S. C. § 2411 (a), from the earliest date the overpayment could have been determined (the end of the fiscal year subsequent to the year involved, i. e., March 31, 1943), rather than from the date it filed its claim for refund (June 14, 1945) as provided in § 3771 (e), and that it was thus entitled to the further sum of $51,252.69. The motion was denied, without opinion.

Because of the importance of the question involved to the proper administration of the internal revenue laws, and to settle a conflict between the lower federal courts upon the question,*fn1 we granted certiorari. 364 U.S. 861.

The question thus presented is whether the date from which interest accrues on an overpayment of taxes attributable to an unused excess profits credit carry-back is governed by § 3771 (e)*fn2 of the Internal Revenue Code of 1939, or by 28 U. S. C. § 2411 (a).*fn3

[ 365 U.S. Page 755]

     Petitioner contends that, because refund of the tax was not awarded administratively but by the "judgment of [a] court," the date from which interest runs is governed by the provisions of § 2411 (a), and that it is thus entitled to interest from "the date of the payment" on the "overpayment" which, it argues, became ascertainable,

[ 365 U.S. Page 756]

     and hence should be regarded as made, on March 31, 1943.*fn4 The Government, on the other hand, contends that § 3771 (e) is a special statute relating exclusively to tax refunds attributable to the carry-back provisions of the internal revenue laws, and hence prevails, as respects the special subject of carry-backs, over the general provisions of § 2411 (a). After a careful review of these and other statutes and their legislative history, we have concluded that the Government is right.

Section 3771 (e) of the 1939 Code deals specifically with the subject of interest on tax refunds attributable to the carry-back of a net operating loss or an unused excess profits tax credit, and is "an integral part of the carry-back provision[s]" of the internal revenue laws. Manning v. Seeley Tube & Box Co., 338 U.S. 561, 568. It specifically says that "if the Commissioner determines that any part of an overpayment is attributable to . . . [an] unused excess profits credit for a succeeding taxable year, no interest shall be allowed or paid with respect to such part of the overpayment for any period before the filing of a claim for credit or refund of such part of the overpayment or the filing of a petition with the Tax Court, whichever is earlier." The refund awarded here was solely ...


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