A-6161, NOVEMBER 29, 1924, 4 COMP. GEN. 499

A-6161: Nov 29, 1924

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INTERNAL REVENUE HEARINGS - TRAVELING EXPENSES THERE IS NO AUTHORITY OF LAW FOR THE PAYMENT OF EXPENSES INCIDENT TO SECURING THE ATTENDANCE OF WITNESSES AT HEARINGS CONDUCTED BY THE BUREAU OF INTERNAL REVENUE FOR THE PURPOSE OF DETERMINING WHETHER PERMITS ISSUED UNDER SECTION 6 OF TITLE II OF THE NATIONAL PROHIBITION ACT OF OCTOBER 28. HE SHALL GIVE NOT LESS THAN FIFTEEN DAYS' NOTICE IN WRITING TO THE PERSON WHO IS THE MANUFACTURER THEREOF TO SHOW CAUSE WHY SAID ARTICLE SHOULD NOT BE DEALT WITH AS AN INTOXICATING LIQUOR. THE NAME OF THE AGENT OR OFFICIAL BEFORE WHOM SUCH PERSON IS REQUIRED TO APPEAR. THE MANUFACTURER MAY BY APPROPRIATE PROCEEDING IN A COURT OF EQUITY HAVE THE ACTION OF THE COMMISSIONER REVIEWED.

A-6161, NOVEMBER 29, 1924, 4 COMP. GEN. 499

WITNESSES, INTERNAL REVENUE HEARINGS - TRAVELING EXPENSES THERE IS NO AUTHORITY OF LAW FOR THE PAYMENT OF EXPENSES INCIDENT TO SECURING THE ATTENDANCE OF WITNESSES AT HEARINGS CONDUCTED BY THE BUREAU OF INTERNAL REVENUE FOR THE PURPOSE OF DETERMINING WHETHER PERMITS ISSUED UNDER SECTION 6 OF TITLE II OF THE NATIONAL PROHIBITION ACT OF OCTOBER 28, 1919, 41 STAT. 310, SHOULD BE REVOKED OR REDUCED.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, NOVEMBER 29, 1924:

THERE HAS BEEN RECEIVED YOUR LETTER OF NOVEMBER 6, 1924, REQUESTING DECISION RELATIVE TO THE AUTHORITY TO PAY EXPENSES OF WITNESSES IN ATTENDING HEARINGS FOR THE PURPOSE OF DETERMINING WHETHER PERMITS ISSUED UNDER SECTION 6 OF TITLE II OF THE NATIONAL PROHIBITION ACT OF OCTOBER 28, 1919, 41 STAT. 310, SHOULD BE REVOKED OR REDUCED.

THE APPROPRIATION INVOLVED "ENFORCEMENT OF NARCOTIC AND NATIONAL PROHIBITION ACTS, INTERNAL REVENUE, 1925," PROVIDES IN PART AS FOLLOWS:

FOR EXPENSE TO ENFORCE THE PROVISIONS OF THE NATIONAL PROHIBITION ACT AND THE ACT ENTITLED "AN ACT TO PROVIDE FOR THE REGISTRATION OF, WITH COLLECTORS OF INTERNAL REVENUE, AND TO IMPOSE A SPECIAL TAX UPON, ALL PERSONS WHO PRODUCE, IMPORT, MANUFACTURE, COMPOUND, DEAL IN, DISPENSE, SELL, DISTRIBUTE, OR GIVE AWAY OPIUM OR COCOA LEAVES, THEIR SALTS, DERIVATIVES, OR PREPARATIONS, AND FOR OTHER PURPOSES," APPROVED DECEMBER 17, 1914, AS AMENDED BY THE REVENUE ACT OF 1918, AND THE ACT ENTITLED "AN ACT TO AMEND AN ACT ENTITLED "AN ACT TO PROHIBIT THE IMPORTATION AND USE OF OPIUM FOR OTHER THAN MEDICINAL PURPOSES," APPROVED FEBRUARY 9, 1909," AS AMENDED BY THE ACT OF MAY 26, 1922, KNOWN AS "THE NARCOTIC DRUGS IMPORT AND EXPORT ACT," INCLUDING THE EMPLOYMENT OF EXECUTIVE OFFICERS, AGENTS, INSPECTORS, CHEMISTS, ASSISTANT CHEMISTS, SUPERVISORS, CLERKS, AND MESSENGERS IN THE FIELD AND IN THE BUREAU OF INTERNAL REVENUE IN THE DISTRICT OF COLUMBIA, TO BE APPOINTED AS AUTHORIZED BY LAW; THE SECURING OF EVIDENCE OF VIOLATIONS OF THE ACTS, AND FOR THE PURCHASE OF SUCH SUPPLIES, EQUIPMENT, MECHANICAL DEVICES, LABORATORY SUPPLIES, BOOKS, AND SUCH OTHER EXPENDITURES AS MAY BE NECESSARY IN THE DISTRICT OF COLUMBIA AND THE SEVERAL FIELD OFFICES, AND FOR RENTAL OF NECESSARY QUARTERS, $10,629,770; * * *.

SECTIONS 5 AND 9 OF THE ACT OF OCTOBER 28, 1919, 41 STAT. 309 AND 311, RESPECTIVELY, PROVIDE AS FOLLOWS:

SEC. 5. WHENEVER THE COMMISSIONER HAS REASON TO BELIEVE THAT ANY ARTICLE MENTIONED IN SECTION 4 DOES NOT CORRESPOND WITH THE DESCRIPTIONS AND LIMITATIONS THEREIN PROVIDED, HE SHALL CAUSE AN ANALYSIS OF SAID ARTICLE TO BE MADE, AND IF, UPON SUCH ANALYSIS, THE COMMISSIONER SHALL FIND THAT SAID ARTICLE DOES NOT SO CORRESPOND, HE SHALL GIVE NOT LESS THAN FIFTEEN DAYS' NOTICE IN WRITING TO THE PERSON WHO IS THE MANUFACTURER THEREOF TO SHOW CAUSE WHY SAID ARTICLE SHOULD NOT BE DEALT WITH AS AN INTOXICATING LIQUOR, SUCH NOTICE TO BE SERVED PERSONALLY OR BY REGISTERED MAIL, AS THE COMMISSIONER MAY DETERMINE, AND SHALL SPECIFY THE TIME WHEN, THE PLACE WHERE, AND THE NAME OF THE AGENT OR OFFICIAL BEFORE WHOM SUCH PERSON IS REQUIRED TO APPEAR.

IF THE MANUFACTURER OF SAID ARTICLE FAILS TO SHOW TO THE SATISFACTION OF THE COMMISSIONER THAT THE ARTICLE CORRESPONDS TO THE DESCRIPTIONS AND LIMITATIONS PROVIDED IN SECTION 4 OF THIS TITLE, HIS PERMIT TO MANUFACTURE AND SELL SUCH ARTICLE SHALL BE REVOKED. THE MANUFACTURER MAY BY APPROPRIATE PROCEEDING IN A COURT OF EQUITY HAVE THE ACTION OF THE COMMISSIONER REVIEWED, AND THE COURT MAY AFFIRM, MODIFY, OR REVERSE THE FINDING OF THE COMMISSIONER AS THE FACTS AND LAW OF THE CASE MAY WARRANT, AND DURING THE PENDENCY OF SUCH PROCEEDINGS MAY RESTRAIN THE MANUFACTURE, SALE, OR OTHER DISPOSITION OF SUCH ARTICLE.

SEC. 9. IF AT ANY TIME THERE SHALL BE FILED WITH THE COMMISSIONER A COMPLAINT UNDER OATH SETTING FORTH FACTS SHOWING, OR IF THE COMMISSIONER HAS REASON TO BELIEVE, THAT ANY PERSON WHO HAS A PERMIT IS NOT IN GOOD FAITH CONFORMING TO THE PROVISIONS OF THIS ACT, OR HAS VIOLATED THE LAWS OF ANY STATE RELATING TO INTOXICATING LIQUOR, THE COMMISSIONER OR HIS AGENT SHALL IMMEDIATELY ISSUE AN ORDER CITING SUCH PERSON TO APPEAR BEFORE HIM ON A DAY NAMED NOT MORE THAN THIRTY AND NOT LESS THAN FIFTEEN DAYS FROM THE DATE OF SERVICE UPON SUCH PERMITTEE OF A COPY OF THE CITATION, WHICH CITATION SHALL BE ACCOMPANIED BY A COPY OF SUCH COMPLAINT, OR IN THE EVENT THAT THE PROCEEDINGS BE INITIATED BY THE COMMISSIONER WITH A STATEMENT OF THE FACTS CONSTITUTING THE VIOLATION CHARGED, AT WHICH TIME A HEARING SHALL BE HAD UNLESS CONTINUED FOR CAUSE. SUCH HEARINGS SHALL BE HELD WITHIN THE JUDICIAL DISTRICT AND WITHIN FIFTY MILES OF THE PLACE WHERE THE OFFENSE IS ALLEGED TO HAVE OCCURRED, UNLESS THE PARTIES AGREE ON ANOTHER PLACE. IF IT BE FOUND THAT SUCH PERSON HAS BEEN GUILTY OF WILLFULLY VIOLATING ANY SUCH LAWS, AS CHARGED, OR HAS NOT IN GOOD FAITH CONFORMED TO THE PROVISIONS OF SUCH LAWS, AS CHARGED, OR HAS NOT IN GOOD FAITH CONFORMED TO THE PROVISIONS OF THIS ACT, SUCH PERMIT SHALL BE REVOKED, AND NO PERMIT SHALL BE GRANTED TO SUCH PERSON WITHIN ONE YEAR THEREAFTER. SHOULD THE PERMIT BE REVOKED BY THE COMMISSIONER, THE PERMITTEE MAY HAVE A REVIEW OF HIS DECISION BEFORE A COURT OF EQUITY IN THE MANNER PROVIDED IN SECTION 5 HEREOF. DURING THE PENDENCY OF SUCH ACTION SUCH PERMIT SHALL BE TEMPORARILY REVOKED.

SECTION 1837, ARTICLE 18, OF REGULATION 60, REVISED MARCH, 1924, EFFECTIVE MAY 1, 1924, UNDER THE HEADING "PROCEDURE IN DIRECTORS' OFFICES," PROVIDES AS FOLLOWS:

IN PASSING UPON THE RENEWAL APPLICATION OF RETAIL DRUGGISTS AND HOSPITALS, PREVIOUS ALLOWANCES THEREUNDER WILL BE AUTHORIZED WITHOUT DELAY OR QUESTION, UNLESS THE DIRECTOR IS IN POSSESSION OF PROOF SUFFICIENT TO WARRANT THE INQUIRY PROVIDED FOR IN SECTION 1843.

THE SAID SECTION 1843 PROVIDES:

A RETAIL DRUGGIST OR HOSPITAL PERMITTEE SHALL BE PERMITTED TO PROCURE THE FULL AMOUNT FIXED BY HIS BASIC PERMIT AND NO DIRECTOR OR OTHER OFFICER SHALL REDUCE THE AMOUNT SO PROCURABLE WHEN APPLIED FOR, EXCEPT UPON SATISFACTORY PROOF THAT IT IS MORE THAN IS NEEDED FOR LEGITIMATE USE, AND NO DIRECTOR OR OTHER OFFICER SHALL MAKE ANY REDUCTION OF THIS ALLOWANCE WITHOUT FIRST GIVING THE PERMITTEE AN OPPORTUNITY TO APPEAR IN PERSON, OR BY ATTORNEY, OR SUBMIT A STATEMENT IN WRITING, GIVING HIS REASONS WHY HE SHOULD HAVE THE AMOUNT APPLIED FOR, AND A REASONABLE TIME SHALL BE GIVEN THE PERMITTEE TO SUPPLY THIS INFORMATION.

IT THUS APPEARS THAT UNDER THE LAW AND THE REGULATIONS MADE IN PURSUANCE THEREOF THE PERMITS IN QUESTION ARE NOT TO BE REVOKED OR REDUCED UNLESS THE DIRECTOR IS IN POSSESSION OF PROOF TO INDICATE THE NECESSITY FOR SUCH ACTION. IT IS NOT CONTEMPLATED THAT A HEARING SHALL BE CONDUCTED AND WITNESSES CALLED FOR THE PURPOSE OF OBTAINING SUCH PROOF. WHEN THE GOVERNMENT IS IN POSSESSION OF PROOF SUFFICIENT TO INDICATE THAT THE PERMIT SHOULD BE REVOKED OR REDUCED THE PERMITTEE IS TO BE GIVEN A HEARING TO PRESENT SUCH EVIDENCE AS HE MAY BE ABLE TO ADDUCE TO SHOW WHY THE PERMIT SHOULD NOT BE REVOKED OR REDUCED. THERE WOULD APPEAR TO BE NO NECESSITY FOR THE GOVERNMENT TO PRODUCE WITNESSES AT SUCH HEARING. IF, NOTWITHSTANDING THE EVIDENCE PRESENTED BY THE PERMITTEE, IT IS DECIDED TO REVOKE OR REDUCE THE PERMIT AND THE PERMITTEE EXERCISES HIS RIGHT TO TAKE THE MATTER TO COURT AS THE LAW PROVIDES, THE EXPENSES OF WITNESSES THEN CALLED BY THE GOVERNMENT WOULD BE PAYABLE AS IN OTHER LIKE CASES.

ANSWERING THE SPECIFIC QUESTION PRESENTED, I HAVE TO ADVISE THAT THERE APPEARS TO BE NO AUTHORITY OF LAW FOR THE PAYMENT OF EXPENSES INCIDENT TO SECURING THE ATTENDANCE OF WITNESSES AT HEARINGS CONDUCTED BY THE BUREAU OF INTERNAL REVENUE FOR THE PURPOSE OF DETERMINING WHETHER PERMITS ISSUED UNDER THE NATIONAL PROHIBITION ACT SHOULD BE REVOKED OR REDUCED.

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