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Ponape Federation of Cooperative Associations v Peterson [1975] TTLawRp 9; 7 TTR 465 (19 May 1975)

7 TTR 465

PONAPE FEDERATION OF COOPERATIVE ASSOCIATIONS, et al., Petitioners

v.

RONALD T. PETERSON, Director of the Department of Finance, Trust Territory of the Pacific Islands, Respondent

Civil Action No. 5-74

Trial Division of the High Court

Ponape District

May 19, 1975

Action by cooperative associations for refund of gross revenue taxes paid on ground that they were not subject to the tax. The Trial Division of the High Court, Brown, Associate Justice, held that under gross revenue tax statute's definition of "business" as any profession, trade, manufacture or other undertaking carried on for pecuniary profit, including all activities carried on for economic benefit either direct or indirect, cooperative associations which made sales and rendered services for valuable consideration to members and nonmembers, and made patronage refunds and granted dividends to its members, was a "business".

1. Judgments—Summary Judgment—Particular Cases

Entry of summary judgment was proper where all parties moved for summary judgment and conceded that there were no genuine issues of fact.

2. Taxation—Gross Revenue Tax—Construction

In interpreting gross revenue tax statute, the primary rule was to ascertain and declare the intent of the Congress of Micronesia and carry such intent into effect in the fullest degree. (77 TTC § 251 et seq.)

3. Taxation—Gross Revenue Tax—Construction

Statutes defining "business" and "gross revenue", and imposing a tax upon gross revenue, are not ambiguous, and it was thus the court's duty to apply their explicit provisions. (77 TTC §§ 251(7), (8), 258)

4. Courts—Jurisdiction—Legislative Functions

Courts must scrupulously avoid engaging in judicial legislation, any usurpation of legislative powers, or an entry into the legislative field.

5. Taxation—Gross Revenue Tax—Construction

Where gross revenue tax statute did not indicate an exemption for cooperative associations, argument that they were impliedly excluded by the Congress of Micronesia was to no avail. (77 TTC § 251 et seq.)

6. Taxation—Gross Revenue Tax—Exemptions

Gross revenue tax is on entire operative income, not on profits, gross profits or net income; thus, argument that non-profit associations were not subject to the tax was to no avail. (77 TTC § 258)

7. Corporations—Non-Profit Corporations—Cooperative Associations

Cooperative associations which paid dividends to members and extended their services to nonmembers as well as members but gave patronage refunds and dividends only to members could not be classed as nonprofit associations.

8. Taxation—Gross Revenue Tax—Applicability