Bowles v Bank of England [1913] 1 Ch 57

Constitution; royal prerogative; taxation

(299 words)


Mr Bowles purchased a high number of Irish Land Stock which was transferred to his name in Bank of England books. The Committee of the House of Commons for Ways and Means adopted a resolution assenting to the imposition of income tax on for the following tax year. The dividends on the stock were payable twice a year. Mr Bowles sued the Bank of England.


Mr Bowles claimed an injunction to restrict the defendants from deducting any sum as income tax from the dividend payable to the claimant. Bowles argued that the Bank of England was not lawfully entitled to deduct any money by way of an income tax as such tax was not imposed by an Act of Parliament. The Bank, in contrast, intended to follow the tax imposed by the resolution of the Committee for Ways and Means. The Court had to determine whether a Committee resolution could create a legally binding obligation – i.e. whether a resolution could authorise the imposition of an income tax despite the fact that such tax was not approved by Parliament.


It was held that the Bank of England was not entitled to deduct any sums from Mr Bowles’s dividend. A resolution by the Committee of the House of Commons for Ways and Means could not in itself authorise the Crown to levy taxes, without such having first been approved by Parliament in a proper piece of legislation. The Court even referred to the Bill of Rights 1689, according to which taxes cannot be imposed by pretense of prerogative without parliamentary approval. The Court added that even though the Bill of Rights 1689 had not been relied upon for a long time, it still remains in force, and the custom of avoiding it could not displace its validity.