APPEAL FROM JUDGMENT OF THE DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN D.C. Civil No. 547/1971.
Aldisert, Adams and Garth, Circuit Judges. Garth, Circuit Judge concurring in part and dissenting in part.
Resolution of this case turns primarily on the willingness or power of this Court to correct an alleged "drafting oversight" by the Virgin Islands legislature in enacting a statute that conferred certain specified categories of tax relief.
The appellant, Tracy Leigh Development Corp. ("Tracy Leigh") contends vigorously that it is our province, and indeed our duty, to supply a term to the Virgin Islands Code which, it is asserted, the draftsmen unintentionally omitted. Standing in sharp counterpoint to this contention are doctrines of judicial temperance, doctrines which take on a heightened significance when the elemental relationship of courts to legislatures is put in issue.
The facts of the case have been stipulated by the parties. Tracy Leigh was incorporated under the laws of the Virgin Islands on February 24, 1967. On June 23, 1967, Tracy Leigh purchased about four acres of land on St. Thomas, for approximately $130,000.*fn1 On October 26, 1967, the corporation applied for a grant of "tax or fee exemptions and subsidies" under the Virgin Islands Industrial Incentive Act.*fn2 A public hearing on the application was held on December 14, 1967, and an executive committee of the Industrial Incentive Board approved the application on February 11, 1969.*fn3 The grant was made effective from October 26, 1967, the date of the application, for a period of ten years. Subsequently, in 1970, the Government of the Virgin Islands refused to pay Tracy Leigh the subsidies provided for in the grant, declined to recognize any of the tax exemptions conferred by the grant, and filed a lien against Tracy Leigh for taxes owed.*fn4 The Government's failure to comply with the terms of the grant reflected a recommendation by the Comptroller of the Virgin Islands to the Governor that "no subsidy payments be made under this grant" and "that any taxes or fees exempted under this grant be billed and collected, and that the grant be voided."*fn5
Under protest Tracy Leigh paid the asserted tax deficiency, and then brought this lawsuit in the district court. It sought a declaration of the validity of the exemption and subsidy grant, a payment of the subsidies, and a refund of the taxes it had paid under protest.
The Government, in defending the suit, asserted that the tax exemption and subsidy grant exceeded the terms of the authorizing statute. The district court declared the grant void as not supported by the terms of the statute, and Tracy Leigh has appealed.
The Virgin Islands Industrial Incentive Act was enacted by the Islands' legislature "to promote the economic development of the Virgin Islands by the offering of certain incentives to the establishment or expansion of industries or businesses."*fn6 The Incentive program was repealed in July of 1972.*fn7 As of September 25, 1967, the Act provided in part as follows:
"A person, firm, or corporation engaged in or about to engage in an industrial or business activity in the Virgin Islands, which industrial or business activity in the judgment of the Governor of the Virgin Islands, will promote the public interest by economic development of the Virgin Islands, may apply for the [tax exemption and subsidy] if such person, firm, or corporation meets the following requirements:
(B) at least $75,000 in the establishment of a business engaged in the ownership of housing projects . . ., factories, industrial plants, or commercial warehouses, industrial parks, (condominiums) . . ., including the actual construction of such housing projects, factories, industrial plants or commercial warehouses, ...