Before MARIS, McLAUGHLIN and FREEDMAN, Circuit Judges.
This appeal by the Government of the Virgin Islands from a judgment entered in the District Court of the Virgin Islands involves the question whether the district court erred in adjudging, contrary to a decision of the Governor of the Virgin Islands, that King Christian Enterprises, Inc., was entitled to tax exemptions and subsidies under the industrial incentive program of the Virgin Islands and in ordering the Government to take the necessary administrative steps to carry out the judgment.
These are the facts which were before the district court:
King Christian Enterprises, Inc., herein referred to as the Corporation, a Virgin Islands corporation with principal offices at Christiansted, St. Croix, during 1960 commenced the renovation of a number of buildings in Christiansted. On November 22, 1961 the Corporation applied to the Tax Exemption Board for tax exemptions and subsidies under the Act of July 5, 1957, No. 224, V.I.Sess.L.1957, p. 146. The pertinent provisions of the Act are contained in section 5, as follows:
"Each person, firm or corporation engaged in the business of constructing or operating apartment houses, housing projects, industrial or commercial buildings, within the Virgin Islands, shall be eligible for the tax or fee exemptions and the subsidies provided for in section 6 of this Act; Provided there is a demonstrable capital investment of at least One Hundred Thousand ($100,000.00) Dollars; provided further that application for such subsidies and exemptions shall be made not later than December 31, 1960; and it is further provided, that no subsidies or exemptions shall be granted to any person for the construction of any home or dwelling to be occupied by himself or his family." 33 V.I.C. (1958 Supp.) § 4052.
By the Act of May 11, 1960, No. 551, V.I.Sess.L.1960, p. 57, the time limit on making applications under section 5 was extended from December 31, 1960 to December 31, 1961.
Section 6 of the Act of 1957, 33 V.I.C. (1958 Supp.) §§ 4053-4056, provided for specific tax exemptions and subsidies to those qualifying under section 5 to continue for a period of 10 years. Section 9, 33 V.I.C. (1958 Supp.) § 4109, provided that the Act should be administered by the Board of Tax Review which for this purpose should constitute the Tax Exemption Board to which applications for tax exemptions and subsidies should be made. The Board was authorized to conduct hearings, make findings and recommend to the Governor the approval or disapproval of applications. Section 10, 33 V.I.C. (1958 Supp.) § 4110, authorized the Governor to grant tax exemptions and subsidies in the name of the Government of the Virgin Islands upon the recommendations of the Board.
The application of the Corporation to the Board stated the type of its business to be "Commercial buildings and apartments", and the amount of demonstrable capital then invested to be "$110,000.00 (as of June 30, 1961)". The land was described as waterfront property held on a 30 year leasehold and the buildings thereon were described as "7 stores (retail); 1 restaurant; 8 apartments".
On December 18, 1961 the Board held a hearing at which counsel for the Corporation appeared. On December 29, 1961 the Board held an executive session at which it voted to recommend to the Governor the denial of the application. Under date of February 2, 1962, the chairman of the Board transmitted to the Governor a communication from which we quote the following:
"Reference is made to application filed by King Christian Enterprises, Inc., on November 22, 1961, for Tax Exemption and Subsidies for 'Commercial Buildings and Apartments' with indication of $110,000 capital invested, as of June 30, 1961. * *
"A Public Hearing was held * * on December 18, 1961 * * *
"Subsequently, on December 29, 1961, the Board, in Executive Session, after lengthy discussion concluded that, 'King Christian Enterprises, Inc., does not seem to be engaged in the business of constructing or operating industrial or commercial buildings within the meaning of Section 4052 of our Tax Exemption Law'. (See Excerpts of Minutes of December 29, 1961)
"Following this discussion it was regularly moved, duly seconded and unanimously voted that the application of King Christian Enterprises, Inc., be denied, and recommendation ...